Commission must act against manipulators


THE Competition Act 2010, which has been in force since Jan 1,2012, aims to “promote economic development by promoting and protecting the process of competition, thereby protecting the interests of consumers and to provide for matters connected therewith.”

The Malaysian Competition Commission (MyCC) enforces the provisions of the Act.

The biggest impact on the cost of living for consumers is the increasingly high prices of food. The Federation of Malaysian Consumers Associations (Fomca) had strongly called for a market review on the food supply chain to ascertain if the high prices of food were due to market manipulation.

To this end, MyCC published its final report on the market review on the food sector in August 2019. In the report, MyCC identified multiple causes for the exorbitant food prices in the market. These include market manipulation by middlemen, multiple intermediaries and manipulation of Approved Permits.

Taking ikan kembong as an example, the report said the price of the fish increased six times between when it was sold by fishermen and when it reaches the market. Another example used to illustrate this substantial price increase was cabbage, for which the farm price was RM1.60 but the consumer pays RM3.90.

Middlemen are known to hoard fish when prices are low, thus restricting the supply and forcing the price to increase.

MyCC’s review also confirmed that there was opaqueness in price determination along the supply chain.

Two years later, the price of ikan kembung is still at the mercy of intermediaries and supply factors. MyCC chief executive officer Iskandar Ismail acknowledged the fact recently, pointing out that there has been little evidence of change since the market review two years ago.

To protect consumers, the functions of MyCC should not be just to identify the cause of price distortions and manipulations. The law enables it to act against the manipulators to bring about a truly competitive market and ensure fair food prices for consumers.

The first complaint on market manipulation filed by Fomca with MyCC was against the Malaysia Airlines and Air-Asia collaboration. Fomca felt that the collaboration would severely disadvantage consumers through reduced competition in the airlines’ routes, thereby increasing charges. In this case, MyCC took firm action to break the attempted cartel.

But it wasn’t the same outcome on another issue. In October 2018, Fomca filed a complaint with MyCC against Touch ‘n Go. One of the key points in the complaint was the 10% surcharge imposed for using the Touch ‘n Go card in parking areas in malls, especially those where consumers did not have an alternative means of payment.

On August 2020 (22 months later), in response to Fomca’s complaint, MyCC said that based on their enquiry, the “complaint does not raise any competition concern” and that Touch ‘n Go was justified in imposing the surcharge “due to investment and maintenance costs of the system incurred by the operators.” Consumers therefore had to continue paying the unjustified surcharge.

In January 2021, Touch ‘n Go, after receiving many complaints from consumers, finally decided to remove the surcharge. However, the redress to consumers came not through MyCC but the internal decision-making of the company.

PAUL SELVA RAJ

Secretary-general, Fomca

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