The State Of Competition Law In Malaysia In The Aftermath Of The Covid-19 Pandemic

• Published date: 07 March 2024
• Subject Matter: Corporate/Commercial Law, Antitrust/Competition Law, Insurance, Litigation, Mediation & Arbitration, M&A/Private Equity, Antitrust, EU Competition , Insurance Laws and Products, Trials & Appeals & Compensation
• Law Firm: Chooi & Company
• Author: Ms Alycia Chuah Yuin Ting, Jackie Goh Kar Mun, Ryan Heng and Vivian Lim

While many businesses are grappling to stay solvent amidst the economic turbulence plaguing the nation in the aftermath of the Covid-19 outbreak, some are attempting to secure a bigger share of the market through anti-competitive practices. For the benefit of market competitors, this article examines the state of anti-trust laws in Malaysia.

The authors will first set out a brief overview of the competition law regime in Malaysia, before discussing recent notable decisions by relevant authorities and courts on anti-competitive practices. The article will end with brief look at possible amendments to the Competition Act 2010.

A. Competition Act 2010

The Competition Act 2010 ("CA 2010" or "the Act") is the governing legislation in Malaysia regulating matters concerning anti-competitive practices by businesses. The CA 2010 aims to encourage efficiency, innovation, entrepreneurship, promote competitive price and product quality, and protect the interest of consumers by prohibiting the following anti-competitive practices:

1. anti-competitive agreements (such as price fixing, cartels, bid rigging)¹; and
2. abuse of dominant position (such as predatory pricing, price discrimination, bundling, and tying)².

The enforcement auhthority of the CA 2010 is the Malaysia Competition Commission ("MyCC"). MyCC is an independent body established under the Competition Commission Act 2010, and exists as an agency under the Ministry of Domestic Trade and Cost of Living. MyCC is vested with powers under CA 2010 to investigate into allegations of anti-competitive practices and if found to be in breach of CA 2010, penalise the infringers.MyCC is also empowered to issue guidelines to facilitate the implementation of the provisions of CA 2010.

Recent Competition Law Decisions in Malaysia

Case 1: Proposed Decision of MyCC against Five Feedmillers³

In August 2022, MyCC issued a proposed decision against five chicken feed millers for engaging in anti-competitive practices that led to a significant increase in the price of chicken meat. According to MyCC's investigations, these feed millers entered into anti-competitive agreements and concerted practices to increase the price of poultry feed containing soybean meal and maize. By adjusting prices at the same rate, these companies restricted customers' choices and potentially distorted competition in the poultry industry.

In the event that MyCC finds evidence of infringement on the part of the feed millers, MyCC is entitled to, among others:

1. impose financial penalties of up to 10% of the companies' worldwide turnover during the infringement period; and
2. impose other appropriate directives from time to time.

However, a relief of liabilities may be granted if the companies involved in anti-competitive agreements can demonstrate significant technological, efficiency, or social benefits directly resulting from the agreement⁴. The CA 2010 also provides for a leniency regime⁵where MyCC has the discretion to grant leniency to companies based on various factors such as the stage of the investigation, cooperation of the investigated company, the value-added of the information provided, and any benefits brought to the public.

Furthermore, MyCC has the power to enforce its decisions, and failure to comply may result in legal action against the companies involved⁶. If the affected companies are dissatisfied with the MyCC's decision and wish to challenge the decision, they may appeal to the competition appeal tribunal⁷.

Case 2: Malaysian Airline System Bhd v Competition Commission & another appeal⁸

In August 2011, the Malaysian Airline System Berhad ("MAS"), AirAsia Berhad ("AirAsia") and AirAsia X Sdn Bhd ("AirAsia X") signed...