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Saturday September 7, 2013 MYT 12:00:00 AM
Saturday September 7, 2013 MYT 6:51:07 AM
by b.k. sidhu
KUALA LUMPUR: AirAsia and Malaysia Airlines (MAS) are liable to be fined RM10mil each by the Malaysia Competition Commission (MyCC) for allegedly breaching competition laws when they collaborated under a share swap deal two years ago.
Both airlines had allegedly infring-ed Section 4(2)(b) of the Competition Act 2010 by sharing their markets in their eight-month pact, MyCC chairman Tan Sri Siti Norma Yaakob said in a statement here yesterday.
She added, however, that it was a “proposed decision” to fine the airlines after the MyCC investigated a complaint by the Malaysian Con-sumers Association (Fomca) against the airlines’ cooperation early last year.
The MyCC has given the two airlines 30 days to argue, either orally or in writing, why they should not be fined.
“Market sharing is considered a serious infringement under the Act as it is deemed to have the object of significantly preventing, restricting or distorting competition in any market for goods and services,” said Siti Norma.
“When businesses agree to share markets, they are agreeing to stop competing at the expense of the consumers.”
Siti Norma said the financial penalties were based on the turnover earned between Jan 1 and April 30, 2012 for the Kuala Lumpur-Kuching, Kuala Lumpur-Kota Kinabalu, Kuala Lumpur-Sandakan and Kuala Lumpur-Sibu routes.
The financial penalties were less than 10% of their respective worldwide turnovers between January and April 2012, she said.
AirAsia and MAS had, on Aug 9, 2011, entered into a collaboration and a share swap agreement to work together and not compete but after much public hue and cry, the deal was aborted eight months later.
AirAsia, in a statement, said it intends to defend the allegations that it had infringed section 4(2) (b) of the Competitions Act under the collaboration it entered into with MAS in August 2011.
MAS told Bursa Malaysia that it would submit its written representation and indicate if it intended to make an oral representation to MyCC by Oct 18.
It is also reviewing the proposed decision in consultation with its legal counsel.
Tags / Keywords:
Travel, Business, mas, airasia, competition act, MyCC, fomca
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