OECD kpcdb

1. Scope

Section 4 of the Act (anti-competitive agreements) prohibits horizontal or vertical agreements between enterprises insofar as the agreement has the object or effect of significantly preventing, restricting or distorting competition in any market for goods or services.

The following types of agreements which are deemed to be anti-competitive and so for which the MyCC will not need to examine any anti-competitive effects include:

 

a)  Fixing, directly or indirectly, a purchase or selling price or any other trading conditions;

b)  Sharing market or sources of supply;

c)  Limiting or controlling production, market outlets market access, technical or technological development or investment; or

d)  Performing an act of bid rigging.

2. Assessment

According to the Guidelines on Anti-competitive Agreements, agreements are prohibited only if they significantly prevent, restrict or distort competition in any market for goods or services in Malaysia. Anti-competitive agreements will not be considered “significant” if:

 

a)  the parties to the agreement are competitors who are in the same market and their combined market share of the relevant market does not exceed 20%;

b)  the parties to the agreement are not competitors and all of the parties individually have less than 25% in any relevant market.

 

A party to a prohibited agreement that fulfils one of the following justifications, may be relieved of its liability under Section 5:

 

a)  There are significant identifiable technological, efficiency, or social benefits directly arising from the agreement;

b)  The benefits could not reasonably have been provided by the parties to the agreement without the agreement having the effect of preventing, restricting or distorting competition;

c)  The detrimental effect of the agreement on competition is proportionate to the benefits provided; and

d)  The agreement does not allow the enterprise concerned to eliminate competition completely in respect.

 

The burden of proving the identified technological, efficiency or social benefits lies on the parties to the agreement. The parties claiming for this relief are required to prove that the benefits gained are passed on to the consumers.

 

If the MyCC deems that an infringing horizontal and vertical agreements is the one to which Section 5 (relief of liability) applies, the MyCC may grant an exemption to the individual agreement, imposing conditions and obligations it deems appropriate and with a limited duration.

 

The relief under Section 5 may also be granted under a block exemption to a particular category of agreements. An agreement which falls within a category specified in this block exemption is exempt from the prohibition under Section 4 (anti-competitive agreement). Certain agreement may also be considered excluded from the prohibitions: sub-section 13(1) states that “prohibitions under Part II shall not apply to the matters specified in the Second Schedule”. Currently, the Schedule excludes an agreement or conduct to which an enterprise is engaged in to comply with a legislative requirement, collective bargaining activities, as well as services of general economic interest.

3. Remedies and sanctions

See Section I.4 above.

4. Leniency

Section 41 of the Act stipulates that if any enterpriser admits its infringement and provides the MyCC with information or co‑operation that significantly assist the investigation, a reduction of up to 100% of any penalties may be available to the enterpriser.

 

The percentage levels of reduction in penalty will depend on whether the enterprise was the first person to bring the suspected infringement to the attention of the MyCC; the stage in the investigation, or any information or co-operation provided, any other circumstance the MyCC considers appropriate to consider. Section 41 gives the MyCC a broad discretion on the amount of penalty reduction and number of successful leniency applicants.

 

The detailed standards are specified in the Guidelines on Leniency Regime as follows:

 

a)  First applicant: 100 % reduction in the financial penalty

b)  Second, third, or subsequent applicants: differs depending on the stage of investigation, the values of the information and co‑operation the person furnished.

 

The leniency programme of the MyCC has generated at least one application in the last five years.

 

 

* This information is based on Competition Law in Asia-Pacific: A Guide to Selected Jurisdictions (2018).