Public Consultation on Proposed Amendments to the Competition Act 2016May 2016
by , Leong Yew Seng
The Malaysia Competition Commission (“Commission”) proposes to review and amend the Competition Act 2010 (“Competition Act”). The Commission invited the public to provide feedback on the proposed amendments to the Competition Act, through online public consultations. The latest online public consultation at the time of this article ended on 16 May 2016 (“Public Consultation”).
The proposed amendments to the Competition Act set out in the Public Consultation include the following:
The term “enterprise” in the Competition Act refers to any entity carrying on commercial activities relating to goods or services. Parties such as trade associations and individuals have escaped liability under the Competition Act as they lack the economic criteria required to be defined as “enterprise”. The Commission has proposed that the definition of “enterprise” to be extended to refer to any person, being an individual, a body corporate, an unincorporated body of persons or other entity, capable of carrying on commercial or economic activities relating to goods or services. With this, the Competition Act will also be applicable to trade associations and individuals if they are capable of carrying on commercial or economic activities.
Anti-competitive Agreement Must Benefit Consumers
There may be relief for infringement of the prohibition of anti-competitive agreements based on the reasons set out in section 5 of the Competition Act, namely (1) there are significant identifiable technological, efficiency or social benefits directly arising from the anti-competitive agreements; (2) the benefits could not reasonably have been provided by the parties to the agreements without the agreements having the effect of preventing, restricting or distorting competition; (3) the detrimental effect of the agreements on competition is proportionate to the benefits provided; and (4) the agreements do not allow the enterprises concerned to eliminate competition completely in respect of a substantial part of the goods or services. It was proposed that anti-competitive agreements entered between enterprises shall allow consumers the fair share of the resulting benefit before the enterprises may relieve their liability for the infringement of prohibition provided under the Competition Act. This is to ensure there are stringent requirements to justify anti-competitive agreements in the market.
The Commission to Vary or Impose Additional Condition or Obligation on the Granted Block Exemption
Under section 8 of the Competition Act, the Commission may exempt a particular category of agreements from the prohibition against anti-competitive agreements (“block exemption”). It was proposed that if the Commission is satisfied that there has been a material change of circumstance since it granted a block exemption or an obligation has been breached, the Commission shall be empowered to vary or remove any condition or obligation or impose additional condition or obligation. With this, any development to business practice such as online sales can be accounted for in the granted block exemption order instead of waiting for the block exemption order to expire.
Power of the Commission Officer to Require Information
It was proposed that the existing section 18 of the Competition Act be substituted to enhance the power of the Commission officer to require information. Under the proposed provision, the Commission officer shall have the power to direct any person whom the Commission officer has reasonable grounds to believe that the person either has any information or any document or is capable of giving any evidence that is relevant to the performance of the Commission’s functions and power to: (i) give the Commission officer any such information; (ii) produce to the Commission officer any such documents; (iii) make copies of any such documents and to produce those copies to the Commission officer; or (iv) appear, at a private hearing before the Commission officer to give any evidence and produce any such documents