KUALA LUMPUR (Dec 29): The Malaysia Competition Commission (MyCC) today shed light to the reasoning behind the penalty imposed on MY E.G. Services Bhd (MyEG) for infringing the Competition Act 2010.

“MyEG Commerce Sdn Bhd, a subsidiary of MyEG, had entered into an agency agreement with RHB Insurance to act as an agent for RHB Insurance Bhd to sell, among others, mandatory insurances for the renewal of temporary employment permits for foreign workers (PLKS),” said MyCC in a statement today.

“MyCC’s decision arose from its findings that the Appellants’ (MyEG) conduct had resulted in faster renewal times for customers who chose to purchase mandatory insurances from RHB Insurance via the Appellants for the renewal of PLKS due to the fact that there was automatic verification for the said insurances purchased from RHB Insurance,” it added.

On the other hand, customers who choose to undertake similar service from other non-agent insurance companies will experience extra verification steps being imposed by MyEG which resulted in longer renewal times, said MyCC.

“This in turn created pressure on the customer to purchase mandatory insurance from RHB Insurance via the Appellants,” it said.

MyEG said in a bourse filing yesterday that the Competition Appeal Tribunal (CAT) had dismissed the company’s appeal against the decision by MyCC.

The decision by CAT, said MyCC, affirmed the latter’s decision and imposed on MyEG financial penalties totalling RM6.14 million. “However, the total amount may increase should the Appellants fail to comply with CAT’s directions,” said MyCC.

The penalties comprise a financial penalty of RM2.72 million as at June 24, 2016, and daily penalty of RM7,500 from June 25, 2016 to Dec 28, 2017.

Other terms enforced on MyEG include for the company to “cease and desist immediately from imposing different conditions to the equivalent transaction in the processing of PLKS mandatory insurances renewal applications”, said MyCC, failure of which will cause MyEG to add to the daily penalty.

MyEG is also required to provide an efficient gateway (Online Renewal System Services) for all its competitors and potential new entrants that offer the service within 60 days beginning Dec 28, it added.

“It has been MyCC’s objective from the beginning to ensure that companies in a dominant position do not abuse their position as this could have a very negative impact on consumers and the national economy as a whole,” said MyCC chief executive Datuk Abu Samah Shabudin.

“MyCC will continue, without fear or favour, to be vigilant in ensuring competition law is adhered to and will not hesitate to take firm action against those who violate the law,” said Abu Samah.

MyCC added that it is currently actively targeting cartel activities — companies that engage in price fixing, setting trading conditions by way of rebates and discounts, and market allocation and sharing.

“Some of the companies that were investigated by the MyCC for cartel activity include players from the aviation industry, ice manufacturing, logistics and sand traders,” it said.

It also pointed to pending judicial review of the CAT’s decision in the case between MyCC against Malaysian Airline System Bhd (MAS) and AirAsia Bhd (AirAsia). “The hearing for the said judicial review will be held on March 7, 2018,” it said.

Shares of MyEG closed one sen or 0.45% lower to RM2.23 today, giving it a market capitalisation of RM8.04 billion.