This article first appeared in Forum, The Edge Malaysia Weekly on May 27, 2024 - June 2, 2024

For over a decade, the Malaysian Competition Act 2010 has been a silent guardian, ensuring a fair playing field for Malaysian businesses.

Enforced by the Malaysia Competition Commission (MyCC), the act deters various forms of anti-competitive practices, such as price fixing, market sharing and bid rigging, among others, that stifle fair competition and ultimately harm consumers.

However, despite its crucial role in fostering a healthy business environment, many businesses remain unfamiliar with the act and its potential benefits.

Some may argue that the limited number of enforcement cases, just a dozen or so since the act’s inception, point to low enforcement efforts by the regulator.

However, it is crucial to note that this perceived lack of enforcement decisions is not indicative of any shortcomings on the part of MyCC; rather, it stems from the intricate nature of competition investigations.

These cases typically unfold over several years, encompassing activities such as surveillance, data collection and the navigation of investigative complexities.

Apart from investigative challenges, MyCC has also weathered other obstacles during its 12 years of operation, including changes in leadership, with five different prime ministers, and the unprecedented challenges posed by the global pandemic.

Amid these disruptions, the government redirected its focus to more pressing issues, momentarily overshadowing the importance of competition regulation.

The good news is that turbulent times seem to be in the rear-view mirror.

Backed by the Madani government’s commitment to fair competition and a recent 

RM10 million cash injection, the regulator is poised to intensify its enforcement efforts through gradual expansion.

This financial boost signifies a renewed focus on ensuring that the country’s market remains free from anti-competitive practices, creating a more predictable and level playing field for businesses of all sizes.

This financial injection comes at a crucial time, as MyCC’s visibility is poised to skyrocket with the impending amendments to the act set to be tabled soon.

The Competition Act 2010 is currently undergoing amendments, which are anticipated to be presented to the Dewan Rakyat this year. Notably, these proposed changes introduce merger control, expanding the authority of MyCC over mergers and acquisitions (M&A) between businesses.

If you are not familiar with the regulatory powers governing M&A, you may be familiar with the acquisition of Uber by Grab some years ago.

With MyCC lacking the power to scrutinise the transaction back then, the acquisition sparked mixed reactions, with apprehensions about diminished competition in the e-hailing sector.

However, concerns over similar future acquisitions are anticipated to fade into obscurity as the impending amendments are positioned to provide MyCC with the essential authority to intervene and prevent any M&A that might impede or distort competition in any market for goods and services.

While this might bring unfavourable news for the entities engaged in such transactions, it is important to emphasise that, regardless of the outcome, the primary objective of these impending powers is to safeguard you, the consumer.

One thing is certain — these amendments are set to enhance the visibility of MyCC among businesses and the public alike. This boost is crucial, providing the much-needed momentum to raise awareness of the act and its powers.

As awareness of MyCC and the act expands, businesses and members of the public are expected to take on the role of vigilant observers, actively reporting any potential anti-competitive conduct that could compromise efforts to maintain a market free from such practices.

While major corporations possess knowledge of the act and comprehend the repercussions tied to anti-competitive practices, their efforts in achieving compliance often remain superficial.

Many organisations tend to adopt rudimentary compliance manuals, only wielding them when necessary, perhaps as a mitigating factor when regulatory authorities come knocking at their door.

If you believe this is a satisfactory excuse to alleviate fines, ask the five chicken feed millers that were slapped with a staggering RM415,495,696.49 fine by MyCC for engaging in price fixing.

Despite four of the five companies arguing that they had proper compliance programmes in place, the fines were not reduced by even a single sen. MyCC, in its decision, emphasised the paramount importance of compliance programmes being genuinely effective rather than mere compilations of empty policies.

The message is clear as daylight.

This is an opportune moment to reconsider your internal competition law compliance initiatives.

Although organisations might hesitate to allocate additional resources amid the growing list of regulations to comply with — ranging from anti-corruption to data protection — the positive aspect is that competition law compliance provides more than just protection against substantial regulatory fines.

The unique attributes of competition law, when strategically leveraged, can act as a rare legislative ally that not only safeguards against legal issues but also plays a crucial role in sustaining profits and ensuring long-term viability.

How does it accomplish this?

While the prevailing understanding of the act is that it aims to prohibit anti-competitive agreements among competitors, such as price fixing, there is an equally widespread misconception that the act prohibits any agreements between competitors.

This misconception is far from accurate.

Utilised correctly, it embraces and empowers a spectrum of collaborative practices that can unlock hidden opportunities for businesses of all sizes.

For instance, as environmental, social and governance (ESG) initiatives gain global prominence, numerous organisations might face challenges in expediting their journey towards green sustainability objectives. These challenges could arise from budgetary limitations or a lack of foresight to engage in collaborative efforts.

However, it is important to acknowledge that certain endeavours can be achieved economically through teamwork.

Understanding the principles of competition law, particularly in safeguarding the exchange of information, allows your organisation to work on a whole host of collaborative efforts with your competitors, such as sustainable green initiatives that could further enhance your brand image.

Just ask Toyota and BMW, which joined forces on various research and development initiatives aimed at advancing environmentally-friendly fuel cell technologies for hydrogen-powered vehicles.

This collaborative effort fostered innovation and sustainability in the automotive industry, emphasising cooperation rather than stifling competition. Notably, this successful endeavour was accomplished within the confines of competition law.

With awareness on the brink of reaching unprecedented levels, MyCC is positioned to enlist the public and businesses as vigilant monitors of anti-competitive practices and behaviour.

While addressing internal practices is essential in combating anti-competitive behaviours, it is crucial to recognise that there is much more untapped potential within the act.

Organise your affairs, delve into collaborations and achieve both the environment and governance aspects of ESG within the framework of our Competition Act 2010 — effectively hitting two birds with one stone.

Now is the opportune moment to invest in compliance with the act, promising your organisation greater profitability and sustainability in the long run, all while avoiding regulatory fines. It will be money well spent.

Suren Rajah is a practising lawyer, having previously held the position of senior assistant director (enforcement) at the Malaysia Competition Commission

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.