The Malaysia Competition Commission
") and its consultant Ipsos Strategy3 ("Ipsos
") commenced a market review in 2020 into two separate sub-sectors of the transportation sector in regard to the supply of parts for servicing and repairing of cars and after port transportation services ("the Market Review
The Market Review was conducted in accordance with Section 11 of the Competition Act 2010, namely to better understand the market structure, to assess market activities along the supply chain, and to determine any feature or combination of features of the market that may indicate prevention, restriction, or distortion of competition.
The draft final report
of the Market Review ("the Draft Report
") is available on MyCC's website and can also be accessed here
. The MyCC invites the public, including relevant stakeholders, to take part in the Market Review by contributing opinions, inputs, and feedback from 18 June 2021
until 2 July 2021
The Draft Report encompasses two main areas namely: (a) the port logistics ecosystem, which includes freight transport by road; storage and warehousing; port operations; cargo handling/ stevedoring; other cargo handling activities; shipping and forwarding agencies; and other support activities for transportation (e.g. towing, roadside assistance, and crane services); and (b) motor vehicle warranty claims. Ipsos
has identified and made, amongst others, the following key recommendations/ observations in the Draft Report:
Port Logistics Ecosystem
- Local port authorities should review and standardise item of charges to avoid the introduction and revision of unregulated landside charges by shipping lines which could lead to anti-competitive effects resulting in higher costs of trading (import/export) which could cascade down the supply chain leading to higher prices of goods;
- The Government should gazette and enforce a blanket imposition of the use of alternative schemes to container deposit (e.g. non-cheque deposit, container ledger, etc);
- Shipping lines should provide options from panel depots where other industry players can choose from to avoid foreclosure of market to equally competitive players;
- The length of concession agreements should be reasonable and not excessively long (e.g. 30 years);
- The role of the port operators in the downstream market should be limited by way of clear stipulation in the concession agreements; and
- Port operators should obtain approval from the relevant ministry prior to their ventures or expansion in downstream activities.
Motor Vehicle Warranty Claims
- Car manufacturers should remove vehicle warranty restrictions for service and repair to avoid vehicles being sent by customers only to authorised workshops out of fear of voiding the manufacturer's warranty as this may result in foreclosure of the market against independent workshops (thereby restricting consumer freedom) and may lead to higher labour charges/car parts prices; and
- MyCC should initiate further inquiry/investigation into competition concerns relating to the "vertical agreement between insurance companies and vehicle manufacturers" that contain "throughput requirement clauses" that encourage insurance companies to drive business to authorised workshops over independent workshops.
If you or your enterprise have any concerns in any of the areas mentioned above, you may wish to take this opportunity to provide feedback to the MyCC, especially if there are any discrepancies or inaccuracies in the Draft Report. Any feedback may be submitted through the MyCC website or by email to the secretariat at email@example.com
by 2 July 2021
The final report, which will be issued after the public feedback sessions, may ultimately be used by the MyCC as the basis for its analysis and findings of anti-competitive practices by companies in the relevant transportation services in Malaysia
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Ms Tan Shi Wen
Level 8, Wisma UOA Damansara
50, Jalan Dungun, Damansara Heights
Tel: 32081 3999
Fax: 32094 3211
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