RM2.2 million fine imposed on Langkawi Ro-Ro operators for price-fixing cartel

20 April 2022

On 4 January 2022, MyCC released a press statement announcing that three major roll-on roll-off operators in Langkawi, and two other related enterprises were found to be engaged in a price-fixing cartel. Pursuant to MyCC’s final decision dated 29 December 2021, the MyCC’s findings were predominantly centred on the discovery of two Memorandums of Understanding between the parties, which prompted the finding of an infringement under section 4(2)(a) of the Competition Act 2010 (“Act”) by the MyCC.

The investigation was initiated following a direction from the Ministry of Domestic Trade and Consumer Affairs (“MDTCA”) in 2019, after the MDTCA received complaints from the public regarding the increased prices of goods and services in Langkawi. The MDTCA also discovered that the price increase of goods and services in Langkawi was mainly due to the increased fares for commercial vehicles using roll-on, roll-off (“Ro-Ro”) vessels traveling between Langkawi and Kuala Perlis and vice versa. There were price similarities in the fares charged by the Ro- Ro operators.

In its decision, the MyCC stated that: 

• the conduct of a joint venture may be imputed to its parent companies where the parent companies exercise decisive influence over the joint venture’s strategic business decisions; and in such joint ventures, both parents of the joint venture may be found to form a single economic unit with the joint venture for the purposes of imputing liability;
• the mere fact that an enterprise may have played only a limited part in setting up the agreement or concerted practice or may not be fully committed to its implementation, or participated only under pressure from other parties, does not mean that it was not a party to the agreement or concerted practice; and
• the conduct of a person who is generally authorised to act on behalf of the enterprise is sufficient to bring about liability to the enterprise, even if the owner or the managing director of the enterprise himself did not perform or participate in the act or was not even informed of the commission of an infringement of competition law.

The MyCC also directed the enterprises to cease and refrain in the future from engaging in price fixing agreements that may disrupt competition in the market, and to independently determine their future charges for the carriage of vehicle transportation via Ro-Ro vessel. The parties have filed an appeal to the Competition Appeal Tribunal.