Alice Pham_Malaysia - CUTS Institute for Regulation & Competition

Report
Alice Pham
Director, CUTS Hanoi Resource Centre - Vietnam
8 June 2013
Kuala Lumpur
1
National Economy & Market
• Population of 28.86m
(2011) (World Bank)
• 70% approx of
population in West
Malaysia
2
National Economy & Market
• Middle income country (per capita GDP of slightly more
than US$ 8,600 in 2010)
• One of the fastest-growing economies in the world in the
last half a century
• Upgraded itself out of ‘traditional’ natural-resource
industries (rubber and tin), first into other natural
resources (palm oil), then into processed natural
resources (processed palm oil), and then into
manufacturing (electronics and others)
• World’s third highest share of high technology exports
(as defined by the World Bank) in total manufactured
exports – 40% as of 2008
(Source: Ha-Joon Chang , 2011 – UNDP Lecture)
3
National Economy & Market
• Free market economy
• Strong government-led economic policy
• Prominent presence of government-linked
companies
– PROTON (car manufacturing)
– MAS (airlines)
– TM and Axiata (telecommunications &
multimedia)
– Sime Darby (plantations)
4
Market Liberalization and Sector-Based
Regulations
• New Economic Policy (NEP)
• 1983: “Malaysia Incorporated”
• 1991: Privatisation Master Plan (PMP)
 Creation of sector-based regulations and regulators
– Communications and Multimedia Act 1996 (CMA 1998),
Communications and Multimedia Commission Act 1998
(CMCA)  Malaysian Communications and Multimedia
Commission (MCMC)
– Electricity Supply Act 1990, Energy Commission Act 2001
(ECA 2001)  Energy Commission
– Water Service Industry Act 2006  National Water
Services Commission
5
Sectoral Approach to Competition
Regulation
• MCMC issued 2 Guidelines & 1 Process document in 2000
– Guideline on Substantial Lessening of Competition
– Guideline on Dominant Position in a Communications
Market
– Process for Assessing Allegations of Anti-Competitive
Conduct
• ECA2001, Art. 14: The Commission shall have the following
functions:
(h) to promote and safeguard competition and fair and
efficient market conduct or, in the absence of a competitive
market, to prevent the misuse of monopoly or market
power in respect of the generation, production,
transmission, distribution and supply of electricity and the
supply of gas through pipelines
6
Competition Policy and Law
• 2005: Fair Trade Practices Policy (FTTP)
– Objectives
– Scope
– Trade Practices Prohibited
• Abuse of Dominant Position
• Hard-core Cartels
• Anticompetitive practices
• Fair Trade Practices Commission (FTPC) & Fair
Trade Practices Appeal Tribunal
 2010: Competition Act & Malaysian Competition
Commission (MyCC) – no more prohibition on
unfair trade practices
7
Competition Act 2010
• Covering two main types of behaviours
– Anti-competitive agreements (horizontal): price fixing,
controlling of market share/production/ distribution and bid
rigging are per se illegal (Sec.4)
– Abuse of dominant position: imposition of unfair transaction
price, refusal to supply, predatory pricing and entry deterrence
strategies inter alia (Sec.10)
• Individual & block exemptions available: when the benefits
to society exceed costs
• Distinctive features
– No provision on mergers & acquisitions (M&As)
– Exclusion of commercial activities covered under the CMA 1998
and the ECA 2001
– Vertical anti-competitive agreements mentioned & clarified in
the MyCC guidelines
8
Institutional arrangements
• MyCC - An independent regulator to enforce the
Competition Act 2010; has introduced 4 guidelines to this
effect so far
–
–
–
–
market definition,
anti-competitive agreements,
complaints procedures, and
abuse of dominant position
• The MyCC also has the power to undertake “market
reviews” to determine whether any of the market's
features (or combinations of features) are preventive,
restrictive or distortive of competition
• The Competition Appeal Tribunal to adjudicate cases where
an appeal has been filed to review the decision of MyCC 
having a legal status equivalent to the High Court where its
judgment is final and binding
9
Case Studies
• Few reported cases:
– The Cameron Highlands Floriculturist Association
(CHFA) Case
– The MAS-AirAsia Share Swap and CCF Agreement
Case
– The Master Builders Association Malaysia (MBAM)
case
– The poultry industry
10
Challenges Ahead
• Awareness raising in the communities
– Media engagement
• Start-up challenges for a young competition
authorities: Capacity building, Prioritization of
cases, Building reputation & credibility, Garnering
public support, etc
• Advocacy with other government bodies
• Scarcity of information and data
• Challenges posed by globalization, integration &
international cooperation
11
Thank you for your
attention!
For feedback or comments:
[email protected]
12

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