Alice Pham Director CUTS Hanoi Resource Centre Vietnam 8 June 2013 Kuala Lumpur 1 National Economy amp Market Population of 2886m 2011 World Bank 70 approx of population in West Malaysia ID: 586796
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Slide1
An overview of competition scenario of Malaysia
Alice PhamDirector, CUTS Hanoi Resource Centre - Vietnam8 June 2013Kuala Lumpur
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National Economy & Market
Population of 28.86m (2011) (World Bank)70% approx of population in West Malaysia2Slide3
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)
3Slide4
National Economy & Market
Free market economyStrong government-led economic policyProminent presence of government-linked companiesPROTON (car manufacturing)MAS (airlines)TM and Axiata (telecommunications & multimedia)Sime Darby (plantations)
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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 CommissionWater Service Industry Act 2006 National Water Services Commission5Slide6
Sectoral Approach to Competition Regulation
MCMC issued 2 Guidelines & 1 Process document in 2000Guideline on Substantial Lessening of CompetitionGuideline 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 pipelines6Slide7
Competition Policy and Law
2005: Fair Trade Practices Policy (FTTP)ObjectivesScopeTrade Practices ProhibitedAbuse of Dominant PositionHard-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 practices7Slide8
Competition Act 2010
Covering two main types of behavioursAnti-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 featuresNo provision on mergers & acquisitions (M&As)Exclusion of commercial activities covered under the CMA 1998 and the ECA 2001Vertical anti-competitive agreements mentioned & clarified in the MyCC guidelines 8Slide9
Institutional arrangements
MyCC - An independent regulator to enforce the Competition Act 2010; has introduced 4 guidelines to this effect so farmarket 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 competitionThe 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 9Slide10
Case Studies
Few reported cases:The Cameron Highlands Floriculturist Association (CHFA) CaseThe MAS-AirAsia Share Swap and CCF Agreement CaseThe Master Builders Association Malaysia (MBAM) caseThe poultry industry
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Challenges Ahead
Awareness raising in the communitiesMedia engagementStart-up challenges for a young competition authorities: Capacity building, Prioritization of cases, Building reputation & credibility, Garnering public support, etcAdvocacy with other government bodiesScarcity of information and dataChallenges posed by globalization, integration & international cooperation
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Thank you for your attention!
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