Company, Corporate & Securities Law>Malaysia Hands On Guide Corporate Secretarial Essentials>NEW DEVELOPMENTS>NEW DEVELOPMENTS>[60-550] Competition Act 2010

[60-550] Competition Act 2010

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Commentary Affected by 60-550 Affects Paragraphs 2-010 2-010 The Competition Act 2010 (CA) passed by Parliament in May 2010 and gazetted in June 2010, will be enforced on 1 January 2012. Except for anti-competitive practices regulated under the Communications and Multimedia Commission Act 1998, and the Energy Commission Act 2001, the CA provides a comprehensive competition law at national level that cuts across all economic sectors. The CA is applicable to all commercial activities undertaken within Malaysia and those outside of Malaysia that have effects on competition in the Malaysian market. The CA aims to promote economic development by promoting and protecting the process of competition in the Malaysian market so as to maximise consumer welfare through the prohibition of two anti-competitive practices, ie anti competitive agreements (s 4 of the CA) and abuse of dominant position (s 10 of the CA). The main provisions of the CA are: Section 4 prohibits against any horizontal or vertical agreement that has the object or effect of significantly preventing, restricting or distorting competition in Malaysia Section 10 prohibits against abuses by enterprises occupying dominant position in the market they are operating. Dominant position is defined as the ability of such businesses to adjust prices or dictate trading terms in the market without effective constraint from competitors or consumers, and Section 11 authorises the Competition Commission to conduct a review into any market in order to determine whether any feature or combination of features of the market prevents, restricts or distorts competition in the market. Such review will be published and made available to the public.

A Competition Appeal Tribunal where decisions by the Competition Commission may be appealed will also be established under Pt V of the CA. Penalties for first time offenders, unless otherwise expressly provided, is a fine not exceeding RM5m for companies, and a fine not exceeding RM1m, or imprisonment term of not more than five years, or both, for individuals. Fines for second and subsequent offences for companies and individuals are RM10m and RM2m respectively. Under s 63 of the CA, a director, chief executive officer, chief operating officer, manager, secretary or other similar officer of a body corporate may be charged severally or jointly in the same proceedings as the body corporate if the body corporate commits an offence under the CA. In view of the severe penalties and consequences for non-compliance with the CA, it is imperative that affected companies ensure that their business practices and agreements are in compliance with the provisions under the CA before it comes into force on 1 January 2012. The Malaysian Competition Commission (MYCC) said that the guidelines in respect of various pertinent issues in the Competition Act 2010 is expected to be released soon. Before finalising the guidelines, the MYCC plans to hold discussions with the private sector and financial fraternity. Source: Ministry for Domestic Trade, Cooperatives and Consumerism website and Bernama CCH
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Company, Corporate & Securities Law>Malaysia Hands On Guide Corporate Secretarial Essentials>NEW DEVELOPMENTS>NEW DEVELOPMENTS>[60-550] Competition Act 2010

CCH
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