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Subject A Study on Malaysian Competition Law
Date of Issue 2012-09-14 Name 경쟁정책본부
Category/Office Research > Competition Programme
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[A Study on Malaysian Competition Law]


ㅁCo-Authors : Hwang Lee (Associate Professor, Korea University Law School)

  Yo Sop Choi (Assistant Professor, Division of Interdisciplinary Studies in Social Science at Hankuk University of Foreign Studies)

Bong Chul Kim (Assistant Professor, Division of International Studies at Hankuk University of Foreign Studies)

Kaymi Ng (Advocate & Solicitor of the High Court of Malaya [non-practising]; Ph.D. Candidate, School of Law at Hankuk University of Foreign Studies)


A globalised domestic economy places much influence from an internationalisation of competition law and convergence. In particular, learning competition law and policy from other countries’ model laws has become crucial in order to avoid any violation of competition law when domestic companies have businesses in other jurisdictions. Therefore, it is important to study diverse legal measures of competition law in other competition jurisdictions because it is vital for international transactions and also for proposals of better legal techniques, which can lead to convergence or localised harmonisation. Since the first antitrust law entered into force in the US in 1890, over 100 countries have adopted competition law or its kind. In particular, quite a number of countries have legislated or significantly amended competition laws for the last ten years. When assessing newly adopted competition laws in the Asian developing world, it is not difficult to observe adoption of legal techniques from those in the Western countries, mostly the European Union (EU) and the US.

Malaysia is not an exception. Malaysia has finally made its maiden attempt to formally establish a legal regime of competition law. This effort is evidenced in the recent enactment of Competition Act 2010 (Act 712; hereinafter, “the Act”). This Act came into force on 1 January, 2012. The Competition Commission Act (Act 713; hereinafter, “the CCA”) was also legislated and entered into force on the same day as of the Act. The CCA defines the general positions of the Malaysian enforcement agency and other issues, such as enforcement and process. Through these competition laws in Malaysia, the competition authority, the Malaysia Competition Commission (“the MyCC”), was established. It is an independent body that is recognised under the CCA. However, it is still accountable to the Malaysian Ministry of Domestic Trade and Consumer Affairs (hereinafter, “the Ministry”).

Similar to competition law regimes in other neighbouring countries around Southeast Asian region, the Act strictly prohibits any anti-competitive agreements and abusive conducts of market dominance in Malaysia or outside of Malaysia when having an impact on the Malaysian market, although the Act does not provide for competition law regulation on merger control. Further, the Act statutorily and specifically empowers the MyCC to implement and execute major statutory provisions enshrined within the Act which also has the authority to provide various competition law guidelines with regards to the substantive and procedural provisions. The MyCC is, therefore, given the statutory authority to assume the role as the legitimate advocate to promote a sound environment for healthy market competition, thereby to improve the national market economy in Malaysia, which may seem to be lacking comparatively to neighbouring countries.

In addition to this feature, the MyCC is given the statutory obligation to carry out general market monitoring duties. This includes the initiatives to conduct periodical review and studies on matters relating to the local market competition as well as existing sector-specific industries to ensure adherence to the Act. On educational perspectives, the MyCC is expected to create necessary and sufficient educational awareness and to provide relevant education materials and opportunities to the segment of the public having close connection with competition for consumers and other specific parties having an influencing role in the local market.

Historically, competition law in Malaysia was developed on a piecemeal process. It started with the implementation through quite a number of legislations regulating certain business practices or commercial activities which are levelled for the protection to the consumer interest or public interest. A number of trading and consumer statutes affect competition. Some of these statutes have introduced a concept of competition, and the language of competition has been used in these statutes. These laws and regulations include the Companies Act 1965 (Act 125), the Control of Supplies Act 1961 (Act 122), the Trade Descriptions Act 1972 (Act 87), the Food Act 1983 (Act 281), the Hire Purchase Act 1967 (Act 212), the Weights and Measures Act 1972 (Act 71), the Direct Sales Act 1993 (Act 500), and the Consumer Protection Act 1999 (Act 599).

In relation to corporate M&A, some guidelines and a code apply, but they do not deal with competition issues. With regards to the M&A, Malaysia has not yet adopted any competition enforcement provision for merger control. Thus, the Malaysian competition policymakers may face potential demands for the adoption of legal provision on merger in the Act in the near future.

Overall, this proves that, prior to the enforcement of the Malaysian competition laws, there has already been a recognised need to enhance market competition in the Malaysian economy. This was, in fact, recognised in the Eighth Malaysia Plan 2001-2005, and this has been re-affirmed in the Ninth Plan of 2006-2010.

Furthermore, before the comprehensive implementation of the Malaysian competition law, there were some efforts for legislation regulating competition law. This can be traced back then in 1993 when the Ministry began drafting a competition law legislation which was envisaged under the provisions of the Trade Practices Bill (“the Bill”). It was initially adopted from the examples of other Commonwealth countries, such as the Australian Trade Practices Act 1974 and the New Zealand Commerce Act 1986. In particular, Malaysia has the strong influence from the Common Law tradition which shares strikingly similar legal system as the Malaysian system of law. This Bill comprised of sixty-nine sections and contained seven parts, such as of (i) the Trade Practices Commission, (ii) substantially lessen competition, (iii) M&A, (iv) authorisation, (v) enforcement, (vi) remedies and appeal, and lastly, (vii) general provision.

There are some differences between the Bill and the current Malaysian competition acts. The Bill states that “no person shall enter into a contract, agreement, arrangement or understanding containing a provision that has the purpose or is likely to have the effect of substantially lessening competition in a market”. However, the existing Act does not include the expression of “substantially lessening competition”. It goes on to provide a list of anti-competitive contracts or agreements between competitors, such as fixing, controlling or maintaining the price. At face value, this concept seems to have adopted a strong influence from the Common Law tradition, in particular, the US Clayton Act and the UK merger control. However, conversely, in comparison with the existing competition laws in Malaysia, the draft contained a merger control provision that includes pre-merger notification procedure. During the time of examining the Bill, the Minister omitted the provisions on the aspect of competition law for merger control. Except for these two issues stated above, the recently adopted competition laws encompass most of the statements that were provided in the Bill.

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