MyEG fined RM2.7mil for harming competition in foreign worker insurance sale

MyEg online office that opens at Immigration Department of Malaysia in Putrajaya. MOHD SAHAR MSNI/The Star

KUALA LUMPUR: The Malaysia Competition Commission (MyCC) has fined My E.G. Services Bhd (MyEG) RM2.272mil for abusing its dominant position in how it manages online foreign workers permit (PLKS) renewals.

In a statement on Friday, MyCC said by virtue of their shareholdings and directorships, MyEG and MY E.G. Commerce Sdn Bhd (MyEG Commerce) were a single economic unit as defined under the Competition Act 2010. (MyEG Commerce is 100% owned by MyEG.)

MyCC said it found that MyEG, together with MyEG Commerce, had infringed the Act by “abusing its dominant position in harming competition in the downstream market in which MyEG Commerce is participating as an insurance agent for online PLKS renewal applications.”

The competition authority said different conditions were imposed to equivalent transactions with its competitors to the extent that it had harmed competition in the downstream market for the sale of mandatory insurances.

The RM2.272mil financial penalty imposed on the e-government services provider comprises a fine of RM307,200 for the infringement periods of Jan 5, 2015, to Jan 22, 2015, and May 2, 2015, to Oct 6, 2015, as well as a daily penalty of RM7,500 from Oct 7, 2015, to the date of MyCC’s decision (June 24).

The Commission also imposes several remedial actions on MyEG, for which non-compliance may lead to a higher daily penalty for the subsequent period of non-compliance.

These remedial actions include asking MyEG to cease and desist immediately from imposing different conditions to equivalent transactions in the processing of mandatory insurances for online PLKS renewal applications.

MyEG must also provide an efficient gateway for all its competitors in the market of sale of the mandatory insurances and allows the other competitors to compete at the same level within 60 days.

The company must also provide an undertaking in the form and manner acceptable to the Commission, to be fully compliant with the rules and regulations of General Insurance Association of Malaysia within 60 days.

In an announcement to Bursa Malaysia on the same day, MyEG said its board of directors would review MyCC's decision with the company’s legal counsel and it intended to file in an appeal to MyCC.

MyEG shares shed 1 sen to close at RM1.94 on Friday, with 7.046 million shares traded.