FREQUENTLY ASKED QUESTIONNAIRES REGARDING THE MALAYSIAN COMPETITION ACT 2010

The Malaysian Competition Act 2010, being a Federal Act of Parliament ("the Act" ) comes into force on "1 January 2012" . The Act borrows heavily from the European competition law.

The objective of this Act is to promote economic development by promoting and protecting the process of competition and thereby promoting the interests of consumers.

  1. WHO IS THE BODY TASKED WITH THE ADMINISTRATION AND THE ENFORCEMENT OF THE ACT?

    The Malaysian Competition Commission ("MyCC" or "the Commission" ) under the purview of the Ministry of Domestic Trade, Cooperatives and Consumerism ("MDTCC" ).

  2. WHO IS THE CHAIRMAN OF THE COMPETITION COMMISSION?

    Y Bhg. Tan Sri Siti Norma Yaakob, former Chief Justice of Malaya.

  3. WHAT IS THE ROLE OF MYCC?
    • To implement and enforce competition law in Malaysia;
    • To advise the government or other public or regulatory authorities on matters concerning competition law;
    • To conduct market review on competition issues in any market and make recommendations to the government;
    • To educate the public on competition law; and
    • To publish guidelines to clarify and supplement the Act.
  4. WHAT ARE THE OBJECTIVES OF THE ACT?

    We are looking at the objectives from the following perspectives:

    Malaysian Government:

    • For Malaysia to remain competitive internationally;
    • As part of Malaysia's international commitments; and
    • To have competition law for ASEAN integration by 2015.

    Businesses:

    • To have in place fairness and rules for all companies (whether big or small);
    • To minimise abuses by dominant firms; and
    • To be on par with foreign companies to promote globalization.

    Consumers:

    • To enjoy benefit from the competition through lower prices, better products and more choices of products to choose from.
  5. WHAT SECTORS OF THE MALAYSIAN ECONOMY WILL BE SUBJECT TO THE COMPETITION ACT 2010?

    All business entities in Malaysia which are involved in commercial activity, including government linked businesses (GLC), statutory bodies, government agencies or public authority if they are involved in commercial activity, whether within or outside Malaysia.

  6. WHAT IS COMMERCIAL ACTIVITY?

    Commercial activity means any activity of a commercial nature but does not include:-

    • any activity, directly or indirectly in the exercise of governmental authority;
    • any activity conducted based on the principle of solidarity;
    • any purchase of goods or services not for the purposes of offering goods and services as part of an economic activity.
  7. DOES THE COMPETITION ACT 2010 HAVE EXTRA-TERRITORIAL SCOPE?

    Yes, it applies to any business activity within and outside of Malaysia which has an effect on competition in any industry in Malaysia.

    This means that if parties outside Malaysia enter into an agreement which affects the Malaysian market, they will be subject to the Act.

  8. WHAT ARE THE MAIN PROHIBITIONS UNDER THE ACT?

    • Prohibition 1: Chapter 1 of the Act: Agreements which distort competition.
    • Prohibition 2: Chapter 2 of the Act: Abuse of dominant position.

    The Act does not expressly regulate mergers and acquisitions (M&A).

  9. DOES THE ACT HAVE RETROSPECTIVE APPLICATION?

    No. Any anti-competitive activities committed prior to 1 January 2012 will not be caught unless if such activities continue after the coming into force of the Act on 1 January 2012.

  10. ARE THERE ANY GUIDELINES ISSUED BY MYCC?

    Yes, MyCC has issued guidelines which are not definitive as they are still subject to a public consultation process.

  11. WHAT ARE THE POWERS GIVEN TO MYCC UNDER THE ACT?

    Generally very wide powers such as the following:-

    • To investigate any official complaints against anti-competition practices;
    • To review and determine situations of any industry which is practicing anti-competitive practice;
    • To request any person to produce documents or information to facilitate investigations;
    • To seize and retain possession of documents (other than necessary clothing);
    • To enter any place and seize documents for investigation (night and dawn raid and with or without warrant);
    • To require attendance of witness for questioning;
    • To make any finding of infringement of the provisions of competition law.
  12. WHAT ARE THE SANCTIONS UNDER THE ACT?

    Sanctions include:

    • Fine not exceeding 10% of worldwide group's turnover.
    • General penalty for offences such as obstruction, tipping off, threats and reprisals, false information, concealment) are as follows:
      • Companies : fine not exceeding RM5 million or RM10 million for subsequent offence.
      • Individuals : up to fine of RM 1m and/or 5 years jail; up to fine of RM2 million and/or jail up to 5 years for subsequent offence.
    • For offences by Director, Chief Executive Officer (CEO), Chief Operation Officer (COO), manager, secretary, other similar officer responsible for management may be charged severally or jointly unless he had no knowledge and all reasonable precautions/due diligence taken to prevent the infringement.
    • Whistle blower: leniency and reduction up to 100% of penalty which would otherwise have been imposed had the enterprise not admitted its violation of the Act. However the admission by the enterprise may expose itself to the risk of being initiated with claims by victims of infringement in action for damages in civil courts.
  13. HOW TO APPEAL AGAINST THE DECISION OF MYCC?

    A person who is aggrieved or whose interest is affected by a decision of MyCC may appeal to the Competition Appeal Tribunal by filing a notice of appeal to the Competition Appeal Tribunal.

    Pending the decision of an appeal by the Competition Appeal Tribunal, a decision of MyCC shall be valid, binding and enforceable, except where a stay of decisions of MyCC has been applied for by the appellant and granted by the Competition Appeal Tribunal.

    A decision of the Competition Appeal Tribunal is final and binding on the parties to the appeal.

  14. WHAT IS PRIVILEGED COMMUNICATION UNDER THE ACT?

    Under Section 22 of the Act, any communication (whether oral or in writing) between an external legal counsel (i.e. firm of solicitors) and his enterprise-client is deemed privileged communication. Such communication shall not be used against the enterprise-client in the court of law.

This privilege however does not apply in respect of any communication between an in-house counsel with the enterprise-client.

For further clarifications, please contact us at mail@azamlaw.com or call 03 -2171 1484 and speak to Brenda Yong.


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