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 saga to provide some protection to consumers by giving them a choice rather than letting the Touch N Go Monopoly abuse its position to make excessive profits by forcing RFID down consumers’ throats. However, that is not enough.
The Competition Act 2010 was established to prevent monopolistic behaviour which would abuse its position in the market causing suffering to consumers.
FOMCA had filed a complaint with the Malaysian Competition Commission (MyCC) on the 30 October 2018 against the abuses on consumers by Touch N Go, because of its monopolistic position.
Two years later on the 28 August 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”. No matter how consumers are abused by the monopoly, Touch N Go, the MyCC feels that it is not an issue of non-competition or an abuse of the monopoly abusing its power.
As a dominant monopoly protected by the government, Touch N Go does not care about the well-being of consumers or their needs and problems. When Touch N Go first announced that RFID would replace Smart Tag, there was a strong outrage from the Rakyat against this move. Thus Touch N Go assured that use of Smart Tag would continue and consumers would be given a choice of either Smart Tag or purchasing the new RFID. As a so-called responsible monopoly it claimed to be sensitive to the voice of the rakyat; the rakyat would give them a choice.
However, confident that the government would protect it no matter how consumers are abused, it went on ahead and removed Smart Tag from some tolls. An act that can only be considered totally arrogant and abuse of it monopolistic position.
This is clearly an abuse of its dominant position because consumers do not have a choice.
Recognizing that consumers were being abused it is fortunate that the Prime Minister stepped in to protect consumers.
Further Touch N Go 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 RM 35. 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 use to protect consumer against over-charging. Had there been a competitor, even if the competitor charged RM 2, it would be making a 100% profit. Again the Anti-Profiteering Act was established to protect consumers over over-charging, it failed to be used to protect consumers.
Further the Smart Tag Reader is being sold at an exorbitant price of over RM 140. The Smart Tag Reader the only reader that can be used along the highway; even the device is being sold at an exorbitant price as a monopoly. Consumers again have no choice. Has the market been liberalised, FOMCA is confident that prices would significantly fall and quality of the product would significantly increase.
Not enough that Touch N Go products are overcharged, it provided shoddy products to consumers, causing traffic jams and substantial suffering to consumers. Not only have they gone against the wishes of the rakyat and removed Smart Tag lanes, the over-priced RFID product they used is shoddy and low quality product that does not work as it should. Confident of their monopolistic control, they seem to be impervious to the sufferings faced by consumers.
While the Laws and Institutions established failed to protect consumers, we are fortunate that the Prime Minister stepped in to protect consumers by giving them a choice of either RFID, Touch N Go or Smart Tag. We need to go farther than that.
It is time to break the Monopoly and liberalise the sector, allowing more competitors to supply the devices. Further 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 not the continuance of Monopoly. The Monopoly will overcharge, supply shoddy products and provide poor customer service. Because they can. Consumers do not have a choice.
FOMCA has been calling for the liberalisation Sector since 2018. FOMCA again calls on the government to protect consumers by breaking the monopoly and liberalising the sector and allowing more competitors. Only then will consumers be protected and their welfare enhanced.
