DEVELOPMENTS IN COMPETITION
POLICY AND LAW
: THE MALAYSIAN PERSPECTIVE
Ministry of Domestic Trade
and Consumer Affairs
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Contents
3.
Developments in Competition
Policy and Law
1.
Introduction
National Competition Policy
Malaysia’s Fair Trade
Malaysia’
Practices Policy
2. Existing Legislation on Domestic
Commerce
- Communication
and Multimedia
sector
- Energy Sector
• Objective
• Scope
• Content
• Exemptions
Institutional Framework
Ministry’’s Implementation Plan
Ministry
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INTRODUCTION
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INTRODUCTION
• Malaysia is still without a comprehensive
competition law nor is there a general
competition policy.
• Campaigned for the idea of the introduction of a
specific fair trade law in Malaysia has been done
since early 1990’s
• Competition policy currently exists at a very
nascent stage
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EXISTING LEGISLATION
-
As mentioned earlier, there is no
comprehensive competition policy at the
national level that cuts across all economic
sectors.
-
Instead, competition policy is being
implemented only in 2 sectors, namely:
- The Communications and Multimedia
sector
- The Energy sector
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THE COMMUNICATIONS AND
MULTIMEDIA SECTOR
§ Section 135 of the CMA states that:
“ A licensee should not enter into any
understanding, agreement or arrangement,
whether legally enforceable or not, which
provides for :
a) rate fixing
b) market sharing
c) boycott of a supplier of apparatus
d) boycott of another competitor “
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THE COMMUNICATIONS AND
MULTIMEDIA SECTOR
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The CMA clearly prohibits:
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Anti-Competitive conduct (Section 133)
Entering into collusive agreements (Section
135)
Tying or linking arrangements (Section 136)
Such activities are deemed anticompetitive and are therefore
prohibited.
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THE ENERGY SECTOR
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Under the Energy Commission Act 2001 (ECA
2001), Section 14(1)(h), the EC has been
entrusted with the responsibility to:
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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 power or
market power in respect of the generation,
production, transmission, distribution and
supply of electricity and the supply of gas
through pipelines.
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DEVELOPMENTS IN
COMPETITION POLICY
AND LAW
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National Competition Policy
Ø
Ø
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Ø
A national competition policy is needed to
protect BOTH consumers and companies from
anti-competitive conducts
It will supplement the sectoral competition policy
The proposed competition policy will be called
the “Fair Trade Practices Policy (FTPP) ”
FTPP will only concentrate on competition
regulation (CPA already exists).
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MALAYSIA’S FAIR TRADE
PRACTICES POLICY
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Elements of Malaysia’s Fair
Trade Practices Policy
•
Objective
(ii)
Scope
(iii)
Content
(iv)
Exemptions
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(i)
Objectives
Ø
Increase level of competition in economy.
Ø
Prevent restrictive business practices.
Ø
Prevent abuse of dominant positions
of market power and mergers and acquisitions.
Ø
Inculcate fair trade culture and competition ethics.
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(ii) Scope
§
National
§
All Economic Sectors
§
Public and Private Enterprises
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(iii) Content
Two Approaches
• Preventive
• Remedial
Both will be structural and behavioral in
nature.
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(iii) Content (2)
-
Policies
Structural
- Monitor changes in
market structure.
- Prevent firms from
becoming
concentrated.
Behavioral
- List of anticompetitive conducts
deemed illegal.
- Rule of reason used.
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(iii) Content (3)
List of Conduct That May Be
Per Se Prohibited
Price Fixing
n Collusive Tendering
n Cartels
n Predatory Pricing
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Resale Price Maintenance
n Tied Selling
n Refusal to Deal
n Exclusive Dealing
n Reciprocal Arrangements
n Market Allocation
* To use “Rule of Reason”, where applicable
n
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(iv) Exemptions
Example of the types of exemptions that the
government may be inclined to seek include
those pertaining to :
• Development policies of government
• Small and Medium Size Enterprises (SMEs)
• Based on prudential reasons
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Government Institutional Framework
for Fair Trade Practices Policy
1. Fair Trade Practices Unit (FTPU)
- unit that develops, formulates and drafts
policy and law
2. Office of Fair Trade Practices
- upgraded FTPU
- temporary administrative agency
(before FTP Commission is set up)
3. Fair Trade Practices Commission
- the permanent enforcement agency
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Ministry’s Implementation Plan
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Committees:
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National Competition Working Group
(for domestic FTPP)
Multilateral Trade Negotiation Sub-Committee
on Competition (for international competition
issues)
Steering Committee on Implementation (Exemptions)
Activities:
Conduct RBP Study (Sept 2002 – May 2003)
Undertake Advocacy Programmes
Draft Fair Trade Practices Policy
Draft Fair Trade Practices Law
Exemption study
Consultations
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We Welcome Your Comments
Planning and Development Division
Ministry of Domestic Trade and
Consumer Affairs
Level 32, Menara Dayabumi ,
Jalan Sultan Hishamuddin,
50632 Kuala Lumpur, Malaysia
Tel: 603 -2274-7996
Fax: 603 – 2274-7049
E-Mail: [email protected]
[email protected]
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THANK YOU
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