Price-fixing in Malaysia – not a bed of roses
On 24 October 2012, the MyCC issued its first proposed decision in relation to a breach of Malaysia’s Competition Act 2010 (Act). The proposed decision stemmed from a news report in March 2012 which quoted CHFA’s president stating that its members had agreed to increase flower prices by 10%.
The MyCC found that the conduct of CHFA and its members had breached the price-fixing prohibition contained in the Act (which came into effect on 1 January 2012). Rather than automatically imposing financial penalties, the MyCC’s proposed decision requires CHFA to:
- cease and desist from fixing flowers prices;
- provide an undertaking that its members will refrain from anti-competitive practices; and
- issue a public statement on the above remedial actions in mainstream newspapers.
Only if CHFA fails to comply with these remedies will the MyCC consider imposing financial penalties of RM20,000 (AUD 6,348) and an additional RM1,000 (AUD 317) for every additional day of non-compliance. Under the Act, financial penalties are limited to 10% of the worldwide turnover of an enterprise over the period during which an infringement occurred.
The MyCC has justified this soft approach by reference to the fact that the Act is in its first year of enforcement. With the MyCC currently working on eight cases which merit investigation for possible infringement of the Act, it will be interesting to see how enforcement powers are used over the coming months.