WHEN laws and institutions established to protect consumers fail, the consumer suffers.

The Federation of Malaysian Consumers Association (Fomca) expresses its gratitude to the prime minister for intervening in the Touch ‘n Go (TNG) saga to provide some protection to consumers by giving them a choice, rather than letting the TNG monopoly abuse its position to make excessive profits by forcing the Radio Frequency Identification (RFID) system down consumers’ throats. However, that is not enough.

The Competition Act 2010 was established to prevent monopolistic behaviour, an abuse of market position, which causes suffering to consumers.

Fomca had filed a complaint with the Malaysian Competition Commission (MyCC) on October 30, 2018 over TNG’s abuses against users, because of its monopolistic position.

Two years later on August 28, 2020, MyCC responded that it had undertaken an investigation and according to the results of their inquiry, “the issues raised do not raise any competition concern”. No matter how consumers are abused by TNG, the MyCC feels that it is not an issue of non-competition or an abuse of the monopoly abusing its power.

As a monopoly protected by the government, TNG does not care about the wellbeing of consumers or their needs and problems. When TNG first announced that RFID would replace SmartTag, there was a strong outrage from the rakyat against this move. Hence, TNG assured that the use of the SmartTag reader would continue and consumers would be given a choice of either SmartTag or purchasing the new RFID system. As a so-called responsible monopoly it claimed to be sensitive to the voice of the rakyat; the rakyat would give them a choice.

However TNG, confident that the government would protect it no matter how consumers are abused, it went on ahead and removed the SmartTag lanes from some tolls. An act that can only be considered totally arrogant and abuse of it monopolistic position.

This is clearly an abuse of its dominant position because consumers do not have a choice.

Recognising that consumers were being abused, it is fortunate that the prime minister stepped in to protect consumers.

Furthermore, TNG is clearly overcharging consumers and making excessive profits. While the RFID system was supposed to be given free to consumers or at a very nominal price, it charges RM35. This is clearly overcharging consumers. And without a competitor, consumers have no choice.

The government has the Price Control and Anti-Profiteering Act 2011 to protect consumers against overcharging. Yet, the Act was not use to protect users. Had there been a competitor, even if the competitor charged RM2, it would be making a 100% profit.

While the law was enacted to protect consumers from overcharging, it did not serve its purpose.

Furthermore, the SmartTag reader is being sold at an exorbitant price of more than RM140. It is the only reader that can be used along the highway.

As a monopoly, the device is being sold at an exorbitant price. Consumers again have no choice. If the market is liberalised, Fomca is confident that prices would significantly fall and the quality of the product would significantly improve.

TNG does not only overcharged for its products. It also provides consumers with shoddy products, causing traffic jams and substantial suffering to consumers. Not only have they gone against the wishes of the rakyat and removed SmartTag lanes, the overpriced RFID product they used is shoddy and of low quality, and does not work as it should.

Confident of their monopolistic control, they seem to be impervious to the sufferings of consumers.

While the laws and institutions established failed to protect consumers, we are fortunate that the prime minister stepped in to protect consumers by giving them a choice of either RFID, TNG or SmartTag. We need to go further than that.

It is time to break the monopoly and liberalise the sector, allowing more competitors to supply the devices.

On highways, products by other competitors should be acceptable so that the monopoly cannot abuse its position. As MyCC already has decided that this is not a competition issue, Fomca calls on the prime minister to act to protect the consumers.

The real solution is not the continuance of the monopoly. The monopoly will overcharge, supply shoddy products and provide poor customer service, simply because they can. Consumers do not have a choice.

Fomca has been calling for the economy to be liberalised since 2018. We again call on the government to protect consumers by breaking the monopoly, liberalising the sector and allowing more competitors.

Only then, will consumers be protected and their welfare enhanced. – January 20, 2022.

* Dr Paul Selva Raj is secretary-general of the Federation of Malaysian Consumers Association.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.