Competition Appeal Tribunal: Malaysia Competition Commission erred in determining Financial Penalty
22 September 2023
On 27 June 2022, the Malaysia Competition Commission (“MyCC”) issued its first decision on bid-rigging and imposed a financial penalty of RM1,548,192.35 against eight enterprises for the infringement of the prohibition under section 4 of the Competition Act 2010 (“CA 2010”) by engaging in bid rigging conduct involving four information technology related projects worth RM1,925,365.90 procured by the National Academy of Arts, Culture and Heritage of Malaysia.
Following this, four of the eight enterprises accepted the MyCC’s decision whilst the other four enterprises appealed against the MyCC’s decision to the Competition Appeal Tribunal (“CAT”).
On 19 September 2023, the CAT issued its decision as follows:
- the appeals by the appellants with respect to the finding of an infringement under section 4 of the Competition Act 2010 were dismissed; and
- the CAT held that the MyCC had erroneously applied a proxy figure1 when determining the financial penalty in two of the appeals and had failed to adhere to its own Guidelines on Financial Penalties.
In light of the decision on the determination of the financial penalties above, based on the facts of each case the CAT granted a reduction in penalty for two of the appellants from the RM301,822.45 and RM414,829.38 penalty imposed by the MyCC to a reduced amount of RM79,513.59 and RM107,602.75 respectively.
Our Partners, Tan Shi Wen and Manshan Singh, and Associates, Angela Hii and Tham Zhi Jun represented one of the appellants who were granted a reduction in penalty by the CAT.
It is noted that the written grounds of decision have yet to be released by the CAT.
Alert by Angela Hii (Associate) of the Competition Practice of Skrine.
1 The proxy figure is a percentage which is calculated based on the average percentage of the relevant turnovers out of the worldwide turnover of the respective enterprises as named in the MyCC decision. In this case, where the value of the percentage of relevant turnover out of the total worldwide turnover of a relevant enterprise is less than the determined proxy figure, the MyCC adjusted such values upwards to the proxy figure.
This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact skrine@skrine.com.