Alice Pham_Malaysia - CUTS Institute for Regulation & Competition

Alice Pham
Director, CUTS Hanoi Resource Centre - Vietnam
8 June 2013
Kuala Lumpur
National Economy & Market
• Population of 28.86m
(2011) (World Bank)
• 70% approx of
population in West
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)
National Economy & Market
• Free market economy
• Strong government-led economic policy
• Prominent presence of government-linked
– PROTON (car manufacturing)
– MAS (airlines)
– TM and Axiata (telecommunications &
– Sime Darby (plantations)
Market Liberalization and Sector-Based
• 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
Sectoral Approach to Competition
• MCMC issued 2 Guidelines & 1 Process document in 2000
– Guideline on Substantial Lessening of Competition
– Guideline on Dominant Position in a Communications
– Process for Assessing Allegations of Anti-Competitive
• ECA2001, Art. 14: The Commission shall have the following
(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
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
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
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
Case Studies
• Few reported cases:
– The Cameron Highlands Floriculturist Association
(CHFA) Case
– The MAS-AirAsia Share Swap and CCF Agreement
– The Master Builders Association Malaysia (MBAM)
– The poultry industry
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
Thank you for your
For feedback or comments:
[email protected]

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