PUTRAJAYA (April 1): The Malaysia Competition Commission (MyCC) today reiterated its findings that MyEG Services Bhd was in a dominant position as a concession holder and its involvement in the downstream market had caused harm to competition, making it justifiable for the company to be imposed with a RM9.34 million penalty by the commission in 2016.
This argument was again presented in MyEG's judicial review appeal in the Court of Appeal today.
This appeal represents MyEG's fourth attempt at overturning the findings of MyCC. MyEG first made its appeal to the commission after MyCC's decision to penalise it in 2016, then to the Competition Appeal Tribunal (CAT) in 2017, and later to the High Court in 2019, which have all been dismissed.
Representing MyCC as the respondent in the appeal hearing today was senior lawyer Datuk Lim Chee Wee, who submitted that MyEG had abused its dominant position by imposing different conditions on equivalent transactions.
This, he argued, was to the extent that it harmed competition in the market in relation to the sale of mandatory insurance for online applications of temporary employment permits for foreign workers (Pas Lawatan Kerja Sementara or PLKS).
"MyEG provides and manages online PLKS renewals. It must be noted that at the material time, MyEG was the dominant concession holder in relation to the online foreign workers’ permit renewal system.
"It must be noted that MyEG was also involved as an agent of RHB Insurance (and eventually other insurers) in the sale of mandatory insurance to foreign workers. Effectively, MyEG was in competition with other insurers in this market and received a commission for every business transacted," Lim told the court.
With this position in the market, Lim said MyEG had effectively "eliminated its competition" by representing that it was mandatory for foreign workers to purchase the Foreign Workers Insurance Guarantee (FWIG) only from MyEG.
"As part of the verification process, MyEG subjected users who purchased the mandatory insurance from other insurance providers to the limitations of the MyEG verification exercise, such as a delay in turnaround time for applications and limitations in the uploading of documents," the lawyer added.
The additional and different conditions imposed by MyEG, Lim said, were a clear example of positive discrimination in favour of MyEG-interested insurance companies at the expense of other insurance companies.
"By virtue of its representations and the imposition of different conditions, MyEG manufactured an illusion where it was more preferable for employers to purchase the mandatory insurance through MyEG to avoid the aforementioned uncertainty.
"This was also observed by the CAT and upheld by the High Court, where the CAT found that MyEG’s conduct 'amounts to MyEG putting pressure on end users to purchase the mandatory insurance from MyEG by virtue of its dominant position in the downstream market'," Lim said.
In January 2019, the High Court upheld the penalty imposed by MyCC, and ruled that MyEG held a monopoly in the renewal of insurance for foreign workers, and that action should be taken against the company for abusing that dominant position.
MyCC previously said it had received complaints from other insurance companies that renewals of insurance policies purchased from other insurers were not approved as fast as renewal policies purchased from MyEG.
In its investigation, MyCC found that, as the dominant concessionaire, MyEG was obliged to grant equal access to its facilities and promote competition in the downstream market. Hence, it ruled that MyEG's conduct of imposing different conditions on equivalent transactions in the purchase of mandatory insurance for the renewal of insurance policies for foreign workers constituted an abuse of dominance as per the Competition Act 2010 (Act 712).
The RM9.34 million penalty comprises a financial penalty of RM307,200 and daily penalties from Oct 7, 2015 to Jan 22, 2019.
It was reported that MyEG had since paid RM6.4 million of the total amount owed to MyCC.
The three-member bench led by Justice Datuk Mohamad Zabidin Mohd Diah, along with Justice S Nantha Balan and Justice Datuk Lee Heng Cheong, said it will fix a date to deliver its decision on the judicial review appeal — likely in a month's time. MyEG was represented by senior lawyer Datuk Mohd Hafarizam Harun.