MyCC Allowed to Challenge CAT’s Decision, AirAsia Caught by Surprise

26th Jul 2016

The Malaysian High Court has officially approved the Malaysia Competition Competition’s (MyCC) application in which MyCC challenged the decision of the Competition Appeal Tribunal (CAT) to set aside the RM10 million fine previously imposed on the two biggest airlines in the country, AirAsia Berhad and Malaysia Airlines Berhad for their breaching of the Competition Act 2010.

Judge Nik Hasmat Nik Mohamad has set 15^th August as the date for case management after informing in his chambers Leonard Yeoh, the lawyer representing AirAsia and his colleague Sharon Chong Tze Ying, who is representing the Malaysia Competition Commission.

Malaysia Competition Commission’s Appeal Catches AirAsia by Surprise

AirAsia has already expressed surprise at the MyCC’s decision to appeal to the High Court to reinstate the fines against the low-cost carrier and against Malaysia Airlines, saying that this is not the most productive way of spending public resources and money.

In a statement about MyCC’s appeal, AirAsia said:

We believe that the decision made by the tribunal on 4^th February, 2016 has indeed set the right direction for the development of competition law jurisprudence in Malaysia.

According to AirAsia’s lawyer in this case, Mr Yeoh, the court has also granted the competition commission’s application for a judicial review on the tribunal’s decision, claiming that the application was in the best public interest.

The five-member CAT tribunal had unanimously agreed to set aside the fine against both AirAsia and Malaysia Airlines, saying that there was no anti-competitive behavior in the government-backed association from 2011.

The MyCC found both AirAsia and MAB guilty of breaching anti-competition rules of the Competition Act 2010, under Section 4(2)(b) on the following four routes: Kuala Lumpur-Kuching, Kuala Lumpur-Kota Kinabalu, Kuala Lumpur-Sibu and Kuala Lumpur Sandakan.

According to the Competition Act 2010, horizontal and vertical agreements between two companies (AirAsia and MAB in this case) that have the object to share market or sources of supply are prohibited if they have the effect of drastically preventing, restricting or distorting competition in any market for goods or services.

Both AirAsia and MAB have been fined RM10 million (RM20 million in total) by the MyCC on 11^th April, 2014, for entering the agreement to share the market within Malaysia between 1^st January, 2012 and 30^th April same year.