On 20 December 2018, the High Court reinstated the RM 10 million fine on Air Asia and MAS for breaching the Competition Act. This has been the final conclusion of a complaint filed by FOMCA in 2012. On the 24 February 2012 FOMCA had filed a complaint with the Competition Commission against the share-swap arrangement between MAS and Air Asia It cited incidents of flight cancellations as signs of possible anti-competitive behaviors, whereby with the new set-up, flights were being shared so that the two airline
would not compete with each other on certain routes. On 6th September 2013, both parties were found guilty by the Commission for being in contravention of Section 4 of the Competition Act. However, the Competition Appeal Tribunal decided that the parties did not need to pay the fine as they did not infringe the Competition Act. Fortunately, The High Court upheld that the Malaysia Competition Commission’s (MyCC) decision imposing RM10 million fine on each of two airlines - Malaysia Airlines (MAS) and AirAsia Bhd - for breaching the Competition Act 2010. In his judgement, in setting aside the decision of the Competition Appeal Tribunal, the judge had stated that the decision to set aside the fines was tainted with “error of law and unreasonableness”. The consumers won the case.
It is indeed sad that the so-called National Carrier and an airline that claims to have the consumers’ welfare at heart, chose to collude to manipulate the market to the disadvantage of the Malaysian consumer. If not for the complaint filed by FOMCA and the investigation and legal actions taken by the MyCC, Malaysian consumers will continue to be victims of market collusion that would seriously negatively impact consumer well-being and consumer welfare.
This case should be a warning to all major corporations or even Government led Companies not to take consumers welfare for granted. MyCC has the mandate and the legal authority to act against any business entity manipulating the market or colluding with other players to the disadvantage of consumer welfare.
FOMCA strongly supports the Malaysian Competition Commission. The actions taken by the Commission to eliminate monopolistic behaviours and market collusion and strive towards a truly free market has direct impact on the welfare of consumers.
In the MAS-Air Asia case, through eliminating collusion, consumers would benefit through more choices and lower prices. Further, the sugar monopoly has also been eliminated. Companies that had the monopoly to import sugar could manipulate sugar pricess as they please, making excessive profits. Through the end of the monopoly and the freeing if the market, consumers will benefit not only from lower sugar price, but also of all derivative goods that uses sugar as an input. If the government seeks to impose a sugar tax to reduce sugar consumption, the tax would be collected by government. We hope that the tax would be utilised for enhancing the health of Malaysians. If not for eliminating the sugar monopoly, the monopoly companies would benefit from higher prices despite that the fact they were already making excessive profits.
MyCC is also conducting market studies on medicines. FOMCA hopes that the studies would help to end any monopolistic behaviour of pharmaceutical companies and make medicines more affordable for the consumers. Recently, MyCC has been conducting market studies on some essential foods. FOMCA has always contended that prices of essential food including fruits, vegetables, fish, poultry and eggs have been excessively priced due to monopolistic practices along the supply chain or through import licensing practices that prevents a truly free market that would benefit consumers. We hope that through elimination of all forms of monopolistic behaviours consumers could gain through more choices, better quality and lower prices.
The role of MyCC is finally having an impact on consumer well-being and consumer welfare.