High Court Dismisses MyEG’s Judicial Review Application on Abuse of Dominant Position
23 January 2019
On 22 January 2019, the Kuala Lumpur High Court dismissed a judicial review application brought by My E.G. Services Berhad (“MyEG”) and My E.G. Commerce Sdn Bhd (“MyEG Commerce”) to quash the decision by the Competition Appeal Tribunal (“CAT”) affirming the finding by Malaysia Competition Commission (“MyCC”) that MyEG had infringed section 10(2)(d)(iii) of the Competition Act 2010 - abuse of dominant position.
This case arose from a privatisation exercise which resulted in MyEG being the sole concession holder for the Government’s foreign workers permit renewal system. Both MyCC and CAT found that MyEG, as the sole and dominant concession holder in the upstream market, had applied different conditions to equivalent transactions in the downstream market where MyEG Commerce participated as an agent for online foreign workers permit renewal applications. The different conditions manifested when additional verification steps were imposed on customers who chose to purchase insurances (which are mandatory for permit renewal) from other non-agent insurance companies. The High Court agreed with MyCC and CAT that MyEG had abused its dominant position as the sole and dominant concession holder and its conduct has harmed competition in the market.
Pursuant to CAT’s decision, MyEG now has to immediately cease and desist from imposing different conditions to equivalent transactions for the purchase of mandatory insurances for online foreign workers permit renewal applications, and to provide an efficient gateway for all its competitors in the market for the sale of the mandatory insurances.
A financial penalty of over RM6.4 million has been collected from MyEG (as of 28 December 2017) and a further daily penalty of RM7,500 continues to accrue for each day of non-compliance of the remedial actions by MyEG.
This case is significant as it is the first judicial review application in Malaysia arising from an infringement under the “abuse of dominant position” provision in chapter 2 of the Competition Act 2010.
MyCC was represented by our Dato’ Lim Chee Wee, Sharon Chong and Manshan Singh in the CAT proceedings and by Sharon Chong and Manshan Singh in the judicial review proceedings in the High Court.