Cartels

The tribunal had found that the setting of minimum hourly labour rates and trade discounts on automotive part prices, as in the arrangement between Persatuan ...

Following the tribunal’s decision, the financial penalties imposed on the insurers in all amounting to an aggregate quantum of penalty of RM173.66mil was consequently set aside. The insurers are saying we guarantee paying you a minimum of RM30 for every hour of labour costs, or even more. “This tribunal could not see how the fixing of the minimum labour rate would significantly prevent or restrict or distort competition in the market for labour costs,” it wrote. “If the insurers are viewed as the consumer (the parties paying for the spare parts), why would the consumers want to set a minimum payment of RM30 per hour for the labour costs? Two years ago, the MyCC had found that PIAM and 22 general insurers had infringed section four of the Competition Act 2010, following the arrangement on the minimum hourly labour rates and spare part prices for six commonly used vehicles, namely Proton, Perodua, Naza, Nissan, Toyota and Honda.However, on Sept 2, the CAT had unanimously set aside the decision by the MyCC. The tribunal had found that the setting of minimum hourly labour rates and trade discounts on automotive part prices, as in the arrangement between Persatuan Insurans Am Malaysia (PIAM) and the Federation of Automobile Workshops Owners’ Association of Malaysia (FAWOAM), does not tantamount to price-fixing.