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An overview of competition scenario of Malaysia An overview of competition scenario of Malaysia

An overview of competition scenario of Malaysia - PowerPoint Presentation

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An overview of competition scenario of Malaysia - PPT Presentation

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: 431803

market amp act competition amp market competition act commission practices competitive mycc 2010 supply malaysia multimedia dominant trade national

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Slide1

An overview of competition scenario of Malaysia

Alice PhamDirector, CUTS Hanoi Resource Centre - Vietnam8 June 2013Kuala Lumpur

1Slide2

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)

4Slide5

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

10Slide11

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

11Slide12

Thank you for your attention!

For feedback or comments:ap@cuts.org12