The Malaysia prime minister’s Budget 2025 speech in October included the Malaysian economic equivalent of a rare animal sighting. When tabling in parliament his government’s budget for next year, Anwar Ibrahim took aim at cartels and identified the Malaysia Competition Commission (MyCC) as his weapon of choice.
As of September 2024, said the prime minister cum finance minister, the commission had ‘effectively dismantled cartel dominance and bid rigging’, slapping penalties to the tune of nearly RM600m (US$135m) on more than 350 companies.
‘The entire government will be mobilised to harness efforts to control prices and the supply of goods, including dismantling the dominance of cartels that exploit large profits at the expense of the people’s money,’ Anwar added. To help MyCC break up more cartels, price fixing arrangements and monopolies, he has allocated it RM27m under Budget 2025.
Competition policy and law are growing in prominence in Malaysia
It was one of the few times in the year that the country’s competition policy and law has been anywhere near the media spotlight. MyCC usually makes the news only when it announces an enforcement measure, and even that depends on how well the public grasps the impact of the anti-competitive practice that the commission has acted against.
Bigger role
We will be hearing a lot more of MyCC as it takes on a larger role in the management of the country’s economy in the coming months.
The fact that cartels and the commission have now been mentioned in the Budget speech two years in a row reflects the growing prominence of competition policy and law in Malaysia. A major factor here is the clamour for market reforms and more effective efforts to address the rising cost of living.
With a tripled budget, the Malaysia Competition Commission has higher expectations to satisfy
In Budget 2024, the government earmarked RM10m for MyCC to strengthen its capacity and functions in countering anti-competitive practices. Given that the 2025 allocation is almost triple that amount, the commission now has higher expectations to satisfy.
Currently in its 13th year, the independent quasi-judicial body enforces the Competition Act 2010, which helps drive economic development by ‘promoting and protecting the process of competition, thereby protecting the interests of consumers’.
The act specifies two categories of anti-competitive practices: anti-competitive agreements and abuse of a dominant position. Businesses may be guilty of anti-competitive agreements when they get together (often as cartels) to fix prices, share markets or sources of supply, limit or control production, or rig the outcomes of tender exercises. Examples of abuse of a dominant position include price discrimination, predatory behaviour and refusal to supply good and services.
Competition driver
As well as investigating and penalising anti-competitive practices, MyCC champions the importance of competition and educates the public about it, and conducts studies on markets to identify any features that prevent, restrict or distort competition.
Competition encourages efficiency, innovation and entrepreneurship
In its 2021–25 strategic plan, MyCC explains that its work boosts consumer welfare because competition encourages efficiency, innovation and entrepreneurship, which leads to competitive prices, better quality of products and services, and wider choices for consumers.
The RM27m government allocation for 2025 will enable MyCC to build capacity, commission new market reviews, and undertake more advocacy and education activities.
Another profile-raising move will be the proposed introduction of a merger control regime by the commission. If parliament agrees, MyCC will become the regulator for mergers and acquisitions, including blocking mergers that substantially impair competition. This will surely represent a major departure for the corporate sector.
An economy is a massive and complex machine with an array of levers to pull this way and that. In Malaysia, competition policy and law is one of those levers that seldom gets proper attention and appreciation. It’s a good thing that this is unlikely to be the case for much longer. For an economic lever to be worked judiciously and competently, the public needs be aware of what that lever does and how it affects their lives.
