THERE is a correlation between cartel collusion and the cost of living crisis in Malaysia. Consumers have long known this, but of late the authorities are viewing it with the seriousness it deserves.
On Friday, the gravity of the cartels' collusion gained public visibility when five chicken feed firms were fined RM415 million by the Malaysia Competition Commission (MyCC), the largest imposed thus far. But others, like the Consumers Association of Penang (CAP), think the gravity of the guilt should not stop there. They are right.
Cartel collusion is a corporate plot that causes untold harm to consumers. Put differently, it is economic sabotage of a dangerous kind. What else would you call it when five chicken feed companies out of 29 players treat themselves as "the market" and fix prices as they please?
The thing about fixes is that once one is into it, one will be after another fix pretty soon. Price-fixing is addictive. This is the reason CAP education officer N.V. Subbarow told this newspaper on Friday that the five companies should not be allowed to continue in the chicken feed business. Financial penalty is just another cost of doing business for market giants.
But the semantics in the Competition Act 2010 may stand in the way of a more consumer-centric outcome, says lawyer Arik Zakri. The act does provide for offences, but is "thin" on it while being "thick" on infringements.
Consider the only two scenarios of offences in the act. Under Section 23, it is an offence to give false or misleading information, evidence or document. Similarly, it is an offence under Section 24 to destroy, conceal, mutilate or alter records.
Everything else is an infringement. "Prohibition" in the act leads to "infringement", not "offence". Unfortunately for consumers, the mist of semantics — infringement versus offence, which surprisingly isn't defined — will make the Malaysian Competition Act 2010 not so competitive in the global universe of such legislation. To become one, it must be given the bite it lacks. How? Arik has three ideas. Firstly, amend the Competition Act 2010 to be in line with Article 145 of the Constitution — the attorney-general's power, exercisable at his discretion to institute or discontinue any proceedings for an offence — and the Criminal Procedure Code.
This is because, in his view, the scheme of the act creates two categories of wrong — infringements versus offences — when there is no justification to recognise one and not the other. There is no justification to limit the A-G's discretion to charge directors and managers for harming the economy and consumers.
Secondly, amend the act to include clearer procedures to encourage representative actions. Currently, by virtue of Section 64, consumers must wait for finding of infringement by the MyCC before they are allowed to sue companies engaged in anticompetitive practices.
A robust competition law will allow consumers to file actions independent of MyCC. There is a middle way, too, says Arik. Draft a "bandwagon rule" into the law to require a minimum number of complaints before a civil suit can be filed. Finally, do away with the leniency provided under Section 41. Up to 100 per cent reduction in penalties for admitting guilt? Which other law does that, asks Arik. This is a regime to encourage cartel collusion, not punish it.
