Malaysia Introduces Competition Laws
17 December 2012
Malaysia became the latest country to introduce domestic competition laws when, on April 7, it introduced the Competition Bill 2010 and the Competition Commission Bill 2010. Both Bills face two further readings in Parliament before being passed into law.
Lawyers at Rajah & Tann in Kuala Lumpur note that “such a process could be completed in a very short space of time or could take several months. Regardless of when the laws come into force, it is clear that businesses operating in Malaysia must now be alert to how they structure their business dealings, how they use information that is acquired from competitors, how upstream and downstream partners are treated and more.”
Broadly, the firm says, the Competition Commission Bill deals with the establishment of the Competition Commission and provides for its functions and powers. The Commission shall have a chair, four members representing the government, one of who shall represent the Ministry responsible for domestic trade and consumer affairs and not less than three but not more than five other members who have experience and knowledge in matters relating to business, industry and consumer protection.
“The proposed constitution of the Commission suggests that there will be considerable Government input as to whether an activity is anti-competitive or abusive,” the law firm wrote. “However, the good news is that Government-linked companies have not been legislatively excluded just now, although commercial activities undertaken directly or indirectly in the exercise of a governmental authority are not caught.”
The Competition Bill is focused on the prohibition of anti-competitive and abusive conduct and practices. The Rajah & Tann lawyers note that the Bill is “simple and easy to understand, although there remains some degree of ambiguity in the applicability of certain provisions given broad language usage.”
The Bill also calls for a financial penalty of not more than 10% of the “worldwide turnover of the enterprise” during the period during which the infringement occurred. “This can potentially be very large as it is not strictly constrained by the relevant market or by a time period, which in the case of the EU or Singapore, for example, is set at a maximum of three years,” the lawyers wrote.
