The Malaysian competition act 2010: changed or be changed

The Malaysian Competition Act 2010 was passed by Parliament on 6 May 2010, a month after it was first tabled at the House of Representatives. The speed at which it was passed surprised many since it took the Bill 17 long years to reach Parliament, but reflects the Malaysian government’s concern in providing more protection to consumers. The Act seeks to promote and protect the process of competition by changing the behaviour of businesses. The government has announced that the Act is likely to be implemented by mid-2011.

It prohibits anti-competitive agreements between enterprises and abuse of dominance. Any entity that carries on commercial activities relating to goods or services will be caught. Agreements between enterprises are prohibited if they have the object or effect of significantly preventing, restricting or distorting competition in any market. Enterprises which are in a dominant position are prohibited from engaging in conduct amounting to abuse of that dominance. Unlike many other jurisdictions, the Act does The Malaysian competition act 2010: changed or be changed not have merger control provisions.

The Act has extraterritorial effect. Commercial activities transacted outside Malaysia will be caught if they have an effect on competition in Malaysia. Enterprises which are found to have infringed any of the prohibitions may be liable to a maximum financial penalty of 10% of their worldwide turnover for the period of infringement.

The Malaysian Competition Commission will be established to enforce the Act. The Commission is given considerable powers of investigation and enforcement. It may also provide individual and block exemptions for certain types of agreements. Interference with the Commission’s powers is an offence. Noncompliance with the Act will affect not only enterprises but their directors, management and employees too. Directors, CEOs, managers and company secretaries may be personally liable for their companies’ offences. Enterprises are also exposed to civil liability as members of the public who suffered loss or damage as a result of an infringement have a right of private action in court. A leniency program and stepped-reduction in penalties are also provided in the Act. Whistle blowing is encouraged - threats and reprisals against whistle blowers are an offence.

Malaysia’s new competition law brings us in tandem with our ASEAN neighbours and other developed nations. It is “gamechanging”. There will be no turning back once the Act is implemented. It will no longer be business as usual for Malaysian enterprises. They will either have to change or be changed.


Faizah Jamaludin, Head of Competition Law Practice Group


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