MyCC proposes RM17.4 mil fine on Dagang Net

KUALA LUMPUR: The Malaysia Competition Commission (MyCC) has proposed a penalty of RM17,397,695 against Dagang Net Technologies Sdn Bhd (Dagang Net) for provisionally infringing Section 10(1) read with Section 10(2)(c) of the Competition Act 2010.

In a decision issued yesterday, the proposed penalty was for allegedly abusing its position as a monopoly in the provision of trade facilitation services under the National Single Window, refusing to supply the said electronic mailboxes to end users of the Customs Information System and also for imposing barriers to entry to the extent that may harm competition.

MyCC said in a statement today that the investigation on Dagang Net commenced following complaints received by the commission.

“The investigation has provisionally found that Dagang Net had abused its dominant position by refusing to supply new and/or additional electronic mailboxes to end users who utilised front-end software from software solutions providers which were not considered to be Dagang Net’s authorised business partners,” it said.

Dagang Net was also provisionally found to have imposed an exclusivity clause on its business partners which would have had the effect of distorting competition in an upcoming market by creating barriers to entry for Dagang Net’s competitors in the said market which would have made the said competitors less than efficient when competing with Dagang Net.

In addition, MyCC proposed to impose a directive on Dagang Net to cease and desist its infringing conduct and any future conduct which may disrupt competition in the present and future market.

It also proposed that the directors and senior management of Dagang Net and its related companies to undergo a competition law compliance programme within three months of the issuance of the proposed decision.

The proposed decision is a written notice setting out the facts on which the commission makes its assessment and its reasons for arriving at the proposed decision.

It is issued to the enterprises concerned to assist them in making representations and provide any other information to support their representations to the commission.

In this regard, the enterprise concerned has 30 days from the date of receipt of the proposed decision to make their representations to the commission, which will then make its final decision after it has considered the said representations and all the available information and evidence.

The Dagang Net case reflects the MyCC’s effort in addressing the issue of abusive conduct by monopolies in Malaysia and support for the government’s effort to foster transparency, corporate governance and ethical business conduct.

A robust competition regime will bring about significant and holistic long and short-term benefits to consumers in terms of competitive pricing, improved quality of products and services, enhanced innovation and wider choices for consumers.

The Competition Act 2010 came into force on Jan 1, 2012, and as such, businesses ought to have complied with the provisions of the Act.