April 28, 2010
We are pleased to provide this Malaysian competition law update from our friends at the leading Singapore firm Rajah Tann.
Overview
On 22 April 2010, Malaysia’s House of Representatives, the ‘Dewan Rakyat’ passed the Competition Bill 2010 and the Competition Commission Bill 2010. The new Competition Act and Competition Commission Act (“Competition Acts”) will likely be implemented early 2011.
According to Domestic Trade, Co-operatives and Consumerism Minister Datuk Ismail Sabri Yaakob, the Malaysian Government “was serious in creating a healthy business environment.”
The Competition Acts
Broadly, the Competition Commission Act provides for the establishment of a Competition Commission to administer and enforce the Competition Act. The Competition Act provides for laws prohibiting cartels and abusive conduct by monopolies or dominant entities.
Under the Competition Act, potential fines for infringements of the Act can amount to not more than 10% of the worldwide turnover of the enterprise over the period during which the infringement occurred. The lack of a cap on the application of fines to a time period (such as three years in Singapore) or a restriction of the application of fines to activities in the relevant market means that potentially and ultimately, fines imposes can snowball to vast amounts.
Concluding Words
With the pending implementation of the Competition Act, businesses with a presence in Malaysia just over half a year to “get their houses in order”. Businesses in Malaysia should ensure that their business contracts and dealings comply with the new Competition Laws before they come into force and must now, moving forward, be alert to how they structure their business dealings, how they use information that is acquired from competitors, how upstream and downstream partners are treated and more.
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