From Floriculturists And Barbers To Airlines And Insurers

Shi Wen and Karyn examine the developments since the inception of the Competition Act 2010.

This year marks the 6th anniversary of the Malaysian Competition Act 2010 ("Act"), which came into force on 1 January 2012. The past few years have shown a growing trend of enforcement by the Malaysia Competition Commission ("MyCC"), particularly those relating to cartels.

We observed that the MyCC has, based mainly on third party complaints and even ex-officio, conducted investigations into various industries, associations and companies both international and local. In tandem with those investigations, the MyCC has been active in developing guidelines and carrying out studies of several market sectors.

This update provides an overview of the MyCC's investigative trends, policy and enforcement positions, as well as the developments which have occurred in the application of the Act itself.

THE FIRST STEP

When the Act was passed in 2010, companies were given one and a half years to bring their business and internal processes into compliance with the Act. The rationale at the time was that businesses and associations would need time to learn about the Act and adjust their practices accordingly, since there had never been any similar law in Malaysia to address competition issues (apart from the Communications and Multimedia Act 1998). The MyCC went on roadshows and focused on giving talks in an attempt to educate companies - as well as the general public - about the Act and how it was meant to protect consumers in Malaysia. It also issued various guidelines on the application of the Act and the basic concepts of market share.

After the Act came into force, public reaction to the Act and talk of its enforcement remained rather relaxed, and for a brief time it remained to be seen whether and how the MyCC would tackle potential non-compliance.

However, the lull was short-lived; on 23 July 2012, The Star newspaper reported that the MyCC was investigating the Cameron Highlands Floriculturist Association ("CHFA") for allegedly fixing prices of flowers sold to distributors and wholesalers. The initial reaction of the CHFA was one of denial, insisting that the rules of the free market meant that the CHFA and its members were entitled to raise flower prices by 10% across the board. However, the tune quickly changed when the MyCC issued its proposed decision in October that same year. On 6 December 2012, the MyCC published on its website that it had issued a decision finding that the members of the CHFA had infringed Section 4(2) of the Act by fixing the purchase price of their products.

This being the first case in which the MyCC issued a decision on infringement, there was no financial penalty imposed. The CHFA was instead instructed...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT