Malaysia: MyCC

The year 2012 was full of challenges and high expectations for the Malaysia Competition Commission (MyCC); challenges as the Competition Act 2010 came into force on 1 January 2012, after an 18-month moratorium period, and high expectations as stakeholders wanted to see an overnight change with the implementation of the law.

The MyCC was established in April 2011 with 10 members of the Commission and an executive arm headed by the chief executive officer. Despite the main focus of activity in the last 18 months being advocacy sessions with various stakeholders, public awareness of the Commission’s existence and functions remain very low. Therefore, in 2013 external publicisation will continue to ensure that businesses and consumers are fully aware of the law and the benefits it can generate. Businesses are also wary as to the existence and purpose of the MyCC: is it just another administrative body, or is it really going to enforce the law in an effective and efficient manner? Perhaps, while the expectation is high, a few high-profile decisive cases would set the tone for businesses and prove that the MyCC is not a toothless tiger.

The one year of implementation has given an insight into several issues that need to be prioritised and looked into. While the strategic plan for 2012 was rolled out and the programmes were implemented under it, some issues began to take shape as new priorities which were not on our agenda cried out for attention. Taking stock of these issues, the 2013 programmes for the MyCC will focus on some key areas of enforcement and implementation.

A key area of focus in 2013 for the MyCC will be bid rigging. As we already know, public procurement activities contribute towards 15 per cent of GDP in developed countries – and in developing countries like Malaysia, the figure could be higher. The MyCC’s initiative actually began in 2012, when its first bid-rigging seminar was held for public officials where it was found that not only were many ignorant of the law, the term ‘bid rigging’ was in fact almost alien to most of them. It was a good initial effort and opened the eyes of public officials who wanted the MyCC to be more aggressive in creating awareness of the law in this particular area. Therefore, for 2013, several roadshows are in the pipeline, in collaboration with the Ministry of Finance, the custodian of public procurement policy, to ensure that targeted participants are educated as to the adverse effects of such activities. We will work closely with the OECD, and their published guidelines – Fighting Bid Rigging in Public Procurement – will be translated into the national language and circulated to all government departments.

Professional bodies and associations will also be an area of focus. A stocktake of these bodies, together with their rules and statutes, will be carried out to determine whether their price-fixing activities or recommended prices are in accordance with the Competition Act 2010. This is also an area of concern for the associations who believe that the fixing of scaled fees, or even minimum fees, should be allowed by the Act. Several associations have made representations to the MyCC to seek waivers, or to ask the MyCC to consider this kind of activity necessary in order to provide certainty for both consumers and businesses.

As the implementation of the law took off in January 2012, engagement with the private business community became intensive. Talks delivered to various groups revealed to us a level of dissatisfaction among the community of small and medium enterprises (SMEs); they generally take the view that compliance with the law is burdensome and that they are being targeted by the MyCC – especially since our decision on a case involving the SMEs that elicited their unhappiness. While efforts were made to engage these SMEs in public consultations and briefings, the fact remains that many in the community either do not want to accept that some activities enjoyed for decades as normal business practice is now outlawed by the Act, or else they are genuinely ignorant of the law. As such, together with the SME Corp in Malaysia – a government agency solely dedicated to the development of SMEs – plans have been made to ensure that the implications of the law, and the need for compliance with it, are conveyed to all in the community.

As with all competition authorities, the MyCC also recognises that most businesses want to comply with the Act. While we wish to instill a culture of compliance with competition law, we do realise that this law is totally new not only to Malaysia’s business community but also to its legal fraternity, and therefore some broad guidelines on compliance from the regulators’ perspective will be a helpful guide to all businesses, irrespective of size. It will also help them to demonstrate a deep commitment to competition law compliance. This document will take into account all concerns and issues raised by stakeholders during advocacy roadshows.

While the institution has been established with the necessary processes and procedures, expertise remains low. During 2013, in addition to carrying out its core functions, the MyCC will focus on building its internal capacity through the recruitment of qualified staff. The enforcement team will take priority, with specific, targeted capacity-building programmes. Other members of staff will be sent on secondment for relevant programmes and special assignments with other competition authorities. A special training programme for journalists is also in the pipeline, with the assistance of India’s Consumer Unity and Trust Society (CUTS). This is important for developing expertise among journalists, and for helping them to cover issues in an a better and more accurate manner.

2013 will be another challenging year for the MyCC, but we will endeavour to implement the law in an efficient and effective manner, driving the economy to become more productive and innovative.

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