MyCC Issues Final Decision Against CHFA

MyCC Press Release

6 December 2012

The Malaysia Competition Commission (MyCC) today, has issued a Final Decision against the Cameron Highlands Floriculturist Association (CHFA) for contravening Section 4(2) of the Competition Act 2010 (CA2010).

This follows the earlier Proposed Decision issued to CHFA on 24th October 2012 when the CHFA was found engaging in an anti-competitive agreement to increase the prices of flowers by 10%. The CHFA followed soon after with consultations with the MyCC and has since continued to exhibit exemplary cooperation in complying with the Act. 

The MyCC’s Final Decision upholds the earlier proposed remedial actions except for the financial penalty.  

“During the consultations, the CHFA was very cooperative in providing information and undertook to ensure compliance with the Act,” said the MyCC CEO, Pn Shila Dorai Raj.  

She added that the MyCC is stocktaking all trade and professional associations rules and regulations which may infringe the Competition Act 2010.

Background to the MyCC’s Proposed Decision

On 4th March 2012, the online portal of local English daily, The Star, had reported CHFA President, Mr Lee Peng Fo, announcing that its members have agreed to increase the prices of flowers by 10%. Under the Competition Act 2010, it is a violation when enterprises in the same level of production or supply chain agree to fix the price of their goods or services.

This is deemed to have the object of significantly preventing, restricting or distorting competition in the market for the goods. A decision by an association is also defined as an agreement under the Act.

The Proposed Decision sets out the basis for the MyCC’s decision on the case. It was issued to the parties concerned, to give them an opportunity to submit their arguments to the MyCC, and provide any other information for consideration, before the MyCC finalised its decision on whether there has been an infringement.

The CHFA was given fourteen (14) days from the date of the Proposed Decision was served to submit written representations or indicate whether it wished to make an oral representation before the MyCC.

The MyCC’s Proposed Decision earlier had set out the following remedial actions:

1. The CHFA shall cease and desist the infringing act of fixing prices of flowers;
2. The CHFA shall provide an undertaking that its members shall refrain from any anti-competitive practices ;
3. The CHFA shall issue a public statement on the above mentioned remedial actions in the mainstream newspapers; and
4. Once a decision is made by the MyCC under Section 40 of the CA2010 and the CHFA fails to comply according to the directions stated above, a financial penalty amounting to RM20,000 may be imposed. An additional RM1,000 will be imposed for each or part of each following day that the CHFA fails to comply.

The Final Decision currently upheld by the MyCC follows the above except for the financial penalty.