MyCC imposes RM173,655,300 financial penalties against 22 Insurance Companies

On 25 September 2020, the Malaysia Competition Commission (‘MyCC’) released its decision dated 14 September 2020 (‘Decision’) against the General Insurance Association of Malaysia (‘PIAM’) and its 22 members comprising Malaysian insurance companies. 
The MyCC made a finding under section 40 of the Competition Act 2010 that the parties had infringed the section 4 prohibition by participating in an agreement which had, as its object, the prevention, restriction or distortion in relation to the market of parts trade and labour charges for PIAM Approved Repairers Scheme (‘PARS’) workshops from 1 January 2012 to 17 February 2017. In essence, the MyCC maintained the position in its Proposed Decision issued on 22 February 2017.
In the Decision, the MyCC directed the parties to cease and desist from implementing the agreed parts trade discount for six vehicle makes and the hourly labour rate for PARS workshops with immediate effect. The MyCC also required the parties to undertake that the future parts trade discount and the hourly labour rate for the PARS workshops be determined independently of the 22 insurance companies.  
In addition, the MyCC imposed financial penalties on each of the insurance companies ranging from RM137,918.45 to RM24,732,794.62, which amounted in aggregate to RM173,655,300.00, for infringing the section 4 prohibition of the Act.
In view of the impact of COVID-19 pandemic, the MyCC granted a reduction of 25% of the financial penalty imposed on the insurance companies. The MyCC also granted those companies a moratorium period of up to six months for the payment of the financial penalty and for such penalty to be paid by equal monthly instalments for up to six months.
Four of the insurance companies were represented by our Partners, Khoo Guan Huat and Tan Shi Wen, Senior Associates, Melissa Long and Karyn Khor, and Associate, Angela Hii.