Written by Chiou Zhi Qi and Samantha Guang
In Malaysia, competition law is governed by the Competition Act 2010 (‘the CA 2010’). The Malaysia Competition Commission (‘MyCC’), established under CA 2010, aims to protect the competitive process for the betterment of Malaysian businesses and economy.
Malaysia’s competition law prohibits two main types of anti-competitive activity:
- Anti-competitive agreements (Chapter 1, Section 4 of the CA 2010); and
- Abuse of a dominant market position (Chapter 2, Section 10 of the CA 2010)
Anti-competitive agreements are those that prohibit a horizontal or vertical agreement between enterprises in which the agreement has the object or effect of significantly preventing, restricting or distorting competition in any market for products or services.
Meanwhile, under Section 10 of CA 2010, an enterprise is prohibited from engaging in any conduct that amounts to an abuse of a dominant position in any market for goods or services, whether independently or collectively. Section 10(2) of the CA 2010 provides a non-exhaustive list of abuse of a dominant position, such as the enterprise limiting or controlling the production, refusing to supply the materials to a particular enterprise, and other similar practices.
As of 2025, Chapter 1 and Chapter 2 of CA 2010 remain the only types of anti-competition activities prohibited in Malaysia. As stated by MyCC Chief Executive Office Iskandar bin Ismail:
“Malaysia is the only South-East Asian Country without merger control laws”
Nevertheless, MyCC has plans to incorporate such provisions relating to merger control into the CA soon.[1]
In understanding the fundamentals of a merger control regime, it can be briefly defined as a mechanism to prevent market concentration that could lead to anti-competitive practices and prices. It’s usually a set of laws and regulations or policies that govern mergers and acquisitions (‘M&A’), to ensure that such merger activities do not result in any form of monopolies or distort the market’s competitive progress. [2]
On the 25 April 2022, MyCC issued a Consultation Paper outlining in detail the proposed amendments to the CA 2010.[3] The paper suggests including a section to combat mergers and anticipated mergers that profoundly lessens competition. This proposed amendment aims to include a merger notification framework and address prohibition of mergers or anticipated mergers which results in substantial lessening of competition. The paper also proposes a regulatory framework that has investigative and enforcement powers for MyCC. There are also plans to incorporate provisos on the procedures for the issuance of merger-related directions and decisions by the Commission.
Based on the Supplementary Document of Salient Points of the Proposed Amendment of the CA 2010,[4] MyCC will be granted the power to set a threshold for the proposed mergers. If a company’s proposed merger meets the threshold, it will be mandatory for the Company to notify the Commission, which failing to do so will constitute a violation of the law. The proposed amendment of CA 2010 also outlines the circumstances under which a merger occurs, including: –
- The combination of two or more previously independent enterprises;
- The direct or indirect acquisition of all or part of another enterprise or multiple enterprises;
- The acquisition of an enterprise’s assets, resulting in the substantial replacement of the acquired enterprise; or
- The creation of a joint venture to perform, on a lasting basis, all the functions of an autonomous economic entity.
Other than that, under the Proposed Amendment of the CA 2010, the new provision of Section 10A will create a legal standard to decide whether a merger or an anticipated merger should be prohibited. According to the standard, MyCC will assess the proposed merger, leading to one of the following three possible outcomes:
- Approve without condition (if MyCC determines that the merger would not affect the market);
- Approve with conditions imposed (if certain measures are required to address potential concerns)
- Rejection (if MyCC determines that the merger will result in a substantial lessening of competition in the market).
Hence, the legal standard provided is to adopt the “substantial lessening of competition” test (also known as SLC) as the substantive standard for assessing the anti-competitive effects of mergers in Malaysia. [5]
A merger control regime helps minimise the lessening of competition, ensuring that markets remain competitive and dynamic. This, in turn, provides maximum protection for consumers by preventing the imposition of higher prices and the reduction of product or service quality. Moreover, healthy competition in the market fosters innovation and productivity, as the presence of multiple players serves as a motivating force for businesses to improve their efficiency. Ultimately, this contributes to sustained economic growth and a more vibrant marketplace.
To conclude, Malaysia as the only ASEAN country that does not have a merger control regime shows even more reason why such a law is gravely needed. This is further backed by Malaysia being a party to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), Chapter 16 of the CPTPP encourages parties to it should have a comprehensive legislation to prohibit anti-competitive culture in the market.
[1] https://theedgemalaysia.com/node/733660
[2] https://theedgemalaysia.com/node/733660
[3]https://www.mycc.gov.my/sites/default/files/Consultation%20Document%20for%20the%20Proposed%20Amendments%20of%20Act%20712%20%5B25.4.22%5D.pdf
[4]https://www.mycc.gov.my/sites/default/files/Salient%20Points%20of%20the%20Proposed%20Amendments%20of%20Act%20712%20%5B25.4.22%5D.pdf
[5]https://www.mycc.gov.my/sites/default/files/Salient%20Points%20of%20the%20Proposed%20Amendments%20of%20Act%20712%20%5B25.4.22%5D.pdf