DNeX unit could face fine of RM17m for monopoly abuse

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KUALA LUMPUR (July 11): The Malaysia Competition Commission (MyCC) has proposed to fine Dagang Net Technologies Sdn Bhd, a subsidiary of Dagang NeXchange Bhd, RM17.4 million for abusing its position as a monopoly in the provision of trade facilitation services under the National Single Window (NSW).

According to the International Trade and Industry Ministry's website, the NSW, which was developed by Dagang Net, is a platform that enables traders to undertake trade-related transactions and share their data electronically with other parties along the trade supply chain in a paperless, e-trading environment.

"The investigation on Dagang Net was commenced pursuant to complaints received by the Commission. The investigation has provisionally found that Dagang Net had abused its dominant position by refusing to supply new and/or additional electronic mailboxes to end users who utilized front-end software from software solutions providers which were not considered to be Dagang Net's authorised business partners," said MyCC in a statement.

This is an infringement of Section 10(1), read together with Section 10(2)(c) of the Competition Act 2010.

"Furthermore, Dagang Net was also provisionally found to have imposed an exclusivity clause on its business partners which would have had the effect of distorting competition in an upcoming market by creating barriers to entry for Dagang Net's competitors in the said market which would have made the said competitors less than efficient when competing with Dagang Net," it said.

MyCC said it has proposed to impose a financial penalty of RM17.4 million, as well as to have Dagang Net cease and desist its infringing conduct and any future conduct which may disrupt competition in the present and future market.

Additionally, it has proposed that the directors and senior management of Dagang Net and its related companies undergo a competition law compliance program within three months of the issuance of the proposed decision.

The proposed decision is a written notice setting out the facts on which the Commission makes its assessment and its reasons for arriving at the decision. It is issued to the enterprises concerned to assist them in making representations and provide any other information to support their representations to the Commission.

"In this regard, the enterprise concerned has thirty days from the date of receipt of the proposed decision to make their representations to the Commission. The Commission will then make its final decision after it has considered the said representations and all the available information and evidence," it said.