ACCORDING to the Competition Act 2010, the goal of the law is to “promote economic development by promoting and protecting the process of competition”. The act also specifically states that by doing so it aims to protect the interests of the consumer. Has the Competition Act in fact protected the interests of consumers?
The biggest cost of living concern for consumers is the increasing price of food. Fomca had strongly advocated for a market review on the food supply chain to ascertain if the high price of foods was due to market manipulation.
On August 2019, the Malaysian Competition Commission (MyCC) released a market review of the food sector. The report confirmed that some of the key reasons for high food prices were price distortions and manipulations in the food supply chain.
For example, according to the report, the price of ikan kembung has increased by six times between the price received by the fisherman and the price paid by the consumer. Another example of substantial price increase is the price of cabbage; the price at the farm is RM1.60 while the consumer pays a retail price of RM 3.90, an increase of 143%.
Another example of price manipulation was the fish supply chain. Middlemen are known to hoard fish when prices are low, thus restricting supplies and forcing the prices to increase. There was also opaqueness in price determination along the supply chain.
MyCC in its report identified multiple causes of exorbitant food prices. The reasons include market manipulation by middlemen, multiple intermediaries and manipulation of approved permits causing unreasonable hikes in prices.
To protect consumers, MyCC should not just identify the causes of price distortions and manipulations. The Commission Act empowers it to act against the price manipulators to ensure a truly competitive market to benefit consumers.
Yet, in a report on April 2021 in a local newspaper, the MyCC continues to report that the price of ikan kembong has increased six times by the time the fish reaches the market. It continues to report that in the supply of fish is being manipulated by middlemen who hoard supply.
It appears that despite having clearly identified the causes of high prices, MyCC has been unable to act to stop the price manipulation. Consumers continue to suffer. It appears that consumers interest have not been protected.
On another issue, Fomca filed a complaint against Touch ‘n Go on October 2018. A key complaint was that Touch ‘n Go was a monopoly that was unjustly imposing a 10% surcharge for parking at the malls.
That was unjust as Touch ‘n Go had already collected payment for the card leaving consumers with no alternative,
On August 2020 – 22 months later – MyCC responded to Fomca that based on their enquiry, the “complaint does not raise any competition concern” and that the Touch ‘n Go surcharge was justified “due to its investment and maintenance costs of the system incurred by the operators”. Consumers found no redress through MyCC and had to continue to paying the unjustified increased charges. MyCC did not protect the consumer; instead it defended the monopoly. Consumer interests again were not protected.
Yet in January, the new Touch ‘n Go new chief executive officer said that after receiving many complaints from consumers, the company was in the process of removing the parking surcharges. Redress came not because MyCC sought justice for consumers but from the source of the complaint itself.
MyCC has failed to act in the best interests of consumers.
The first complaint filed against market manipulation was by Fomca against the Malaysian Airlines and Air-Asia collaboration that severely disadvantaged consumers through reducing competition in their routes and increasing charges. In this case at least, MyCC took firm action to halt the attempt at building a cartel. – April 9, 2021.
* Paul Selva Raj is Fomca secretary-general.
Comments