MyCC Issues Infringement Decision against seven (7) Warehouse Operators for engaging in a price-fixing cartel
The Malaysia Competition Commission (MyCC) imposes financial penalties ranging from RM26,363.03 to as high as RM336,369.13 against seven (7) warehouse operators for engaging in a price-fixing cartel in relation to the handling services for long length and heavy lift of import and export cargoes at Port Klang. The said warehouse operators are SAL Agencies Sdn. Bhd., WCS Warehousing Sdn. Bhd., Regional Synergy (M) Sdn. Bhd., Intrexim Sdn. Bhd., Pioneerpac Sdn. Bhd., Prima Warehousing Sdn. Bhd. and Interocean Warehousing Services Sdn. Bhd.
Collectively, the grand total amount of penalty is RM1,043,012.52. The amount respectively imposed on the warehouse operators are not more than 10% of their worldwide turnover. In the process of determining the penalty, MyCC has considered the impact of the current economic situation together with the presence of mitigation and aggravating factors in the case. MyCC found in its investigation that between May 2017 and December 2019, the seven operators had formed a cartel and thereafter colluded in fixing the surcharges for the handling service of long length and heavy lift cargoes between themselves.
At the time of MyCC raids against the operators, it was uncovered that the operators had created a WhatsApp Group and began their discussion on fixing the surcharges despite acknowledging that they are all competitors in the warehouse services market. The same raid also unearthed the operators’ cartel agreement in the form of a document called ‘Surcharge Memorandum’ dated 22 May 2017. In that memorandum, all operators have come to an understanding that all of them would charge the agreed rates effective from 1 June 2017.
The parties had submitted their representation between December 2020 and March 2021 to MyCC. After careful deliberation, MyCC had concluded that the conducts of all the warehouse operators constitutes an infringement under Section 4 of the Competition Act 2010. In the decision, MyCC also directs the companies to cease and desist from engaging in price-fixing agreements that may disrupt competition in the handling of long length and heavy lift of import and export cargoes. The MyCC further directs the parties to independently determine their future charges for long length and heavy lift of import and export cargoes. The decision has been made available for public viewing on the MyCC’s website at www.mycc.gov.my.