Competition Act: Malaysian Competition Commission

The Malaysian Competition Commission (myCC) launched its website and logo today (see mycc.gov.my). It is great to read that the long-awaited Competition Act will come into force next year 2012.

The Malaysian Competition Commission's Chairman in an interview today said that they will investigate all anti-competitive behaviors/activities based on public complaints and when they stumble upon such behaviors.

This is definitely positive news for the consumers and even (small) businesses as we now have another avenue to complaint against unfair competition/practices such as price-fixing, market-sharing, abusing one's dominant market position etc.

A good example is the recent MAS-Air Asia's deal and collaboration agreement. The Commission's Chairman had said they may be looking into the deal

Well, below is an excerpt from the media release by MAS:

" Subject to appropriate anti-trust review, the Company, AirAsia and AAX agree that each party (whether by itself or through a subsidiary or affiliate) will focus only on the following business segments: • MAS will focus on being a full-service premium carrier (“FSC”). • AirAsia will focus on being a regional low-cost carrier (“LCC”). • AAX will focus on being a medium-to-long haul LCC. MAS intends to review Firefly Sdn Bhd’s operations, and MAS’s shorthaul FSC business may be undertaken by itself and/or through a new MAS subsidiary (“Sapphire”), and MAS has the flexibility to re-designate capacity, assets and resources from Firefly Sdn Bhd to form Sapphire "

Now, the statement above sure does sound pretty much like a "market-sharing" agreement to me as a lay person. And to review Firefly's operations which currently competes directly with AA, wouldn't this be construed as yet another evidence of "market-sharing"? Hmmm....

It will be interesting to see what happens next year when the Act is enforced. What will the Commission's response if a complaint is lodged? Would MAS-Air Asia be exempted from Act? Would share swap and collaboration be deemed as not infringing the Competition Act? Judging from the various negative comments from other blogs, I would think someone would definitely be lodging a complaint. Interesting 2012

In the US and Europe, many big companies have been subjected to anti-competition suits in the past and recent years.

e.g. Merger of AT&T' and T-Mobile in 2011 was blocked by US regulators on grounds of being anti-competitive and because it could cause wireless prices to rise as competition reduces from 4 big players to 3

e.g. Coca-Cola's proposed acquisition of China Huiyuan in 2009 was blocked by Chinese regulators who concluded that the transaction would have adverse effect on competition

e.g. Google is being investigated by US regulators - probe will focus on Google's advertising business and whether Google has been directing search users to its own services over the competition

e.g.IBM was probed by European Commission in 2010 - whether IBM was abusing its dominant position in the market for mainframe computers

Let's see how strong and effective this new watchdog is in comparison to its US and EU counterparts.