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MyCC Issues Infringement Decision against Dagang Net Technologies Sdn Bhd. for abuse of dominance

2021, Malaysia, Abuse of Dominance

The Malaysia Competition Commission ("MyCC") has issued a final Decision against Dagang Net Technologies Sdn Bhd (Dagang Net) for abusing its dominant position by engaging in exclusive dealing; which infringed Section 10(1) of the Competition Act 2010. Dagang Net, a subsidiary of Dagang NeXchange Berhad, is the Government’s sole service provider in the provision of online trade facilitation services for Sistem Maklumat Kastam under the National Single Window (NSW). The NSW is an electronic-based ecosystem that enables customs related documents and transactions to be transferred electronically between the trading communities and regulatory authorities in Malaysia via a single point of entry.

MyCC issues the decision that Dagang Net had engaged in exclusive dealing through the imposition of exclusivity clauses on software providers of the NSW from October 2015 to November 2017. The anti-competitive conduct of Dagang Net harms competition in the market because it prevents software providers from providing similar services to end users (in this case – the manufacturers, importers, exporters, freight forwarders and shipping agents) in the upcoming uCustoms system. MyCC concludes that the imposition of the exclusivity clauses constitutes an abuse of Dagang Net’s dominant position in the relevant market, which leaves its competitors at a competitive disadvantage when entering the uCustoms market.

MyCC imposes a fine of RM10,302,475.98 against Dagang Net after considering its oral and written representations as well as the impact of the current economic situation and the presence of mitigation and aggravating factors. In the decision, MyCC also directs Dagang Net to cease and to refrain in the future, from engaging in exclusive dealing that may disrupt competition in the provision of trade facilitation services. The Commission further directs that the directors and senior management executives of the company to enrol in competition law compliance training at their own expense.