(Updated)

MyCC imposes RM10.3 million fine against Dagang Net

MyCC imposes RM10.3 million fine against Dagang Net
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KUALA LUMPUR (Feb 26): The Malaysia Competition Commission (MyCC) has fined Dagang NeXchange Bhd unit Dagang Net Technologies Sdn Bhd (Dagang Net) a total of RM10.3 million for the abuse of its dominant position by engaging in exclusive dealing.

Dagang Net is the government’s sole service provider in the provision of online trade facilitation services for Sistem Maklumat Kastam under the National Single Window (NSW).

The NSW is an electronic-based ecosystem that enables customs related documents and transactions to be transferred electronically between the trading communities and regulatory authorities in Malaysia via a single point of entry.

In a statement today, MyCC said after a thorough investigation and due process, MyCC found that Dagang Net had infringed Section 10(1) of the Competition Act 2010 by engaging in exclusive dealing through the imposition of exclusivity clauses on software providers of the NSW from October 2015 to November 2017.

It said the anti-competitive conduct of Dagang Net harms competition in the market because it prevents software providers from providing similar services to end users (in this case – the manufacturers, importers, exporters, freight forwarders and shipping agents) in the upcoming uCustoms system.

MyCC concluded that the imposition of the exclusivity clauses constitutes an abuse of Dagang Net’s dominant position in the relevant market, which leaves its competitors at a competitive disadvantage when entering the uCustoms market.

MyCC chairman Datuk Seri Mohd Hishamudin Yunus said that the granting of a concession is within the power of the government.

“Although it may result in the creation of a monopoly, either directly or indirectly, nevertheless, any abusive monopolistic behaviour will not be tolerated. He warned that stern action will be taken by MyCC against monopolies that sabotage the Malaysian economy.

“MyCC’s decision is in line with the Commission’s objective of protecting the competition process thereby lowering trade transaction costs for companies in the field of global commerce.

“By protecting competition, consumers and businesses will benefit from the bolstered efficiency, innovation and entrepreneurship,” he said.

MyCC also directed Dagang Net to cease and to refrain in the future, from engaging in exclusive dealing that may disrupt competition in the provision of trade facilitation services.

The Commission further directed that the directors and senior management executives of the company to enrol in competition law compliance training at their own expense.

At 9.18am, Dagang NeXchange was unchanged at 71.5 sen, valuing it at RM1.54 billion.