fomca logoJanuary 20, 2022 @ 5:50pm
LETTERS: When laws and institutions established to protect consumers fail; the consumer suffers.

Fomca expresses its gratitude to the prime minister for intervening in the Touch 'n Go (TnG) saga to provide some protection to consumers by giving them a choice rather than forcing radio-frequency identification (RFID) on consumers.

But that is not enough. The Competition Act 2010 was established to prevent monopolistic behaviour.

Fomca had filed a complaint with the Malaysian Competition Commission (MyCC) on Oct 30, 2018 against consumer abuse by TnG because of its monopolistic position.
Two years later, on Aug 28, 2020, MyCC responded that it had undertaken an investigation and according to the results of their inquiry, "the issues raised do not raise any competition concern".

As a dominant monopoly protected by the government, TnG does not seem to care about the wellbeing of consumers or their needs and problems. When TnG first announced that RFID would replace the Smart Tag, it drew outrage from the rakyat.

TnG then assured that use of Smart Tag would continue and consumers would be given a choice of either Smart Tag or purchasing the new RFID. It claimed to be sensitive to the voice of the rakyat.

However, it went on ahead and reduced Smart Tag lanes at some toll plazas.

This is clearly an abuse of its dominant position because consumers do not have a choice.

Further, TnG is clearly overcharging consumers and making excessive profits. While the RFID was supposed to be given free to consumers or at a very nominal price; it charges RM35.

This is clearly overcharging consumers. And without a competitor, consumers have no choice. The government has the Price Control and Anti-Profiteering Act to protect consumers against overcharging.

Yet, the Act was not used to protect consumers against overcharging in this case. Had there been a competitor, even if the competitor charged RM2, it would be making a 100 per cent profit.

Again, the Anti-Profiteering Act failed to be used to protect consumers. Further, the Smart Tag Reader is being sold at an exorbitant price of over RM140.

The Smart Tag Reader is the only reader that can be used along the highway, and even that device is being sold as a monopoly. Consumers, again, have no choice.

If the market is liberalised, Fomca is confident that prices would significantly fall and the quality of the product would significantly increase.

Not enough that TnG products are overcharged, it provided shoddy products to consumers, causing traffic jams and untold suffering to consumers.

Not only have they gone against the wishes of the rakyat and reduced Smart Tag lanes, the over-priced RFID product offered is shoddy and of low quality that it does not work as it should.

It is time to break the monopoly and liberalise the sector, allowing more competitors to supply the devices.

On the highways, other competitor products should be acceptable so that the monopoly cannot abuse its position.

As MyCC already has decided that this is not a competition issue, Fomca calls on the prime minister to act to protect the consumers. The real solution is to stop the monopoly.

Liberalise the sector and allow more competitors.

Only then will consumers be protected and their welfare enhanced.



Secretary-General, Fomca