Malaysia Competition Commission

Transcription

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2 Business Conducts Prohibited by Malaysian Competition Law 15 July 2015 JARIEL FONG CHUEN FUEN Senior Assistant Director, Business and Economics Division

3 COMPETITION LAWS 3

4 TWO GENERAL LAWS ON COMPETITION Competition Act 2010 (Act 712) An act to promote economic development by promoting and protecting the process of competition, thereby protecting the interests of consumers and to provide for matters connected therewith. Competition Commission Act 2010 (Act 713) An act to provide for the establishment of the Competition Commission, to set out the powers and functions of such Commission, and to provide for matter therewith or incidental thereto. 4

5 COMMISSION S FUNCTIONS AND POWERS 5

6 FUNCTIONS AND POWERS OF MyCC S. 16 and S. 17 of Competition Commission Act 2010: Functions and Powers of the Competition Commission Advocacy Investigation & Enforcement Market review Main functions and powers include: Exemption Compliance & Leniency Impose Penalty 6

7 MAIN PROHIBITIONS 7

8 MAIN PROHIBITIONS PROHIBITED ANTI-COMPETITIVE CONDUCT (Chapter 1) ANTI-COMPETITIVE HORIZONTAL AND VERTICAL AGREEMENTS (Chapter 2) ABUSE OF DOMINANT POSITION *60% indicative of dominance 8

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11 Horizontal Agreements Deemed Anti-Competitive Price Fixing Market Sharing Limit Production or Supply Bid Rigging 11

12 Price Fixing Cases in Malaysia Year Cases Decision March 2012 Cameron Highlands Floriculturist Association Increase the price of flowers by 10% Undertaking Feb 2013 Barbers Association Raise the price of haircut services by RM2.00 Undertaking May 2014 Pan Malaysia Lorry Owners Association Increase transportation charge up to 15% Undertaking Jan 2015 Ice Manufacturers Raise the price of edible tube ice by RM0.50 per bag and the price of block ice by RM2.50 per big block Financial Penalties RM252,250 Feb 2015 Sibu Confectionery and Bakery Association Increase the prices of confectionery and bakery products by 10% to 15% Financial Penalties RM247,730 12

13 Price Fixing Cases in Malaysia Year Cases Decision May 2015 June 2015 Malaysian Institute of Arbitrators, Malaysian Institute of Architects, Malaysian Dental Association and the Institute of Landscape Architects Malaysia These four professional bodies are not empowered under any law to set scales of fees. Container Depot Operators Increase depot gate charges from RM5 to RM25 Dismantled their scales of fees Issued Proposed Decision 13

14 Market Sharing Case in Malaysia Year Cases Decision March 2014 MAS and AirAsia Sharing the markets of air transport services of the following routes: i) Kuala Lumpur-Kuching; ii) Kuala Lumpur-Kota Kinabalu; iii) Kuala Lumpur-Sandakan; and iv) Kuala Lumpur-Sibu Financial Penalties RM10 million each (Awaiting Competition Appeal Tribunal s decision) 14

15 Vertical Agreements Involving Price Restrictions Resale Price Maintenance (RPM) In general, the MyCC will take a strong stance against minimum RPM and find it anticompetitive. RPM generally occur when an upstream seller imposes a fixed or minimum price that a downstream buyer must resell. It resulted the resellers do not compete in price. Therefore, RPM is considered to be anti-competitive. 15

16 Vertical Agreements Involving Non-Price Restrictions Agreements That Require A Buyer Must Buy All or Most Supplies from the Supplier Exclusive Distribution Agreement Covering A Geographic Territory Exclusive Customer Allocation Agreement 16

17 LENIENCY REGIME 17

18 LENIENCY REGIME Sec 41 of the CA2010 allows MyCC to grant differing percentage of reductions of financial penalties that could otherwise be imposed on infringing enterprises. MyCC may take into consideration any circumstances including the fact that the enterprise was the first enterprise to come forward to the MyCC about an infringement, the stage in the investigation, if any, the information or other form of cooperation to be provided and the information already in possession of the MyCC. 18

19 LENIENCY REGIME Statutory Framework for Leniency Regime In order to qualify under a leniency regime, an applicant shall comply with the conditions outlined under Sec 41(a) and (b) First condition: Admission to an Infringement of the Prohibition against a Horizontal Agreement under subsection 4(2) Second condition: Provides Significant Assistance 19

20 EXEMPTIONS 20

21 EXEMPTION POLICY EXEMPTIONS INDIVIDUAL BLOCK Section 6 Section 8 21

22 EXEMPTION POLICY 4 cumulative conditions to be fulfilled and these are disjunctives which means all the conditions must be fulfilled: a) Significant identifiable technological, efficiency or social benefits b) Benefits could not be provided without the anti-competitive agreement c) The detrimental effect of the agreement is proportionate to the benefits d) Competition is not eliminated completely 22

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26 Abuse of Dominant Position Prohibited Business Conducts Price Discrimi nation Predatory Pricing Margin Squeeze Exclusive Dealing Refusal to Supply Royalty Rebates Tying and Bundling Excessive Pricing 26

27 Margin Squeeze Case in Malaysia Year Cases Decision Oct 2013 Megasteel The enterprise has leveraged its market power in the upstream market so as to drive out the its rivals in the downstream market. The price of its hot rolled coil (HRC) is disproportionate with the selling price of its cold rolled coil (CRC) which amounts to a margin squeeze. Issued Proposed Decision 27

28 Exclusive Dealing Case in Malaysia Year Cases Decision Oct 2014 Giga Shipping and Nexus Mega Carrier Both enterprises are major providers of logistic and shipment services by sea for motor vehicles from ports in Peninsular Malaysia to ports in East Malaysia. They entered into exclusive agreements with vehicle manufacturers, distributors and retailers which may have had the effects of foreclosing customers to its rivals. Undertaking 28

29 EXCLUSIONS 29

30 EXCLUSIONS However, the Competition Act does not apply to: Mergers and Acquisitions; Activities specified in section 3 of the Act; and Activities specified in the Second Schedule. Excluded Activities Under Section 3 include (a) Any activity directly or indirectly in the exercise of government authority; (b) Any activity conducted based on the principle of solidarity; and (c) Any purchase of goods or services not for the purposes of offering goods and services as part of an economic activity. 30

31 Other Exclusions Communications and Multimedia Act 1998 Energy Commission Act 2001 Petroleum Development Act 1974 Agreement or conduct that comply with any legislative requirement Collective bargaining activities or agreement in respect of employment terms and conditions Service of general economic interest or having the character of a revenue-providing monopoly 31

32 MyCC s GUIDELINES 32

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35 Malaysia Competition Commission Level 15, Menara No.7, Jalan Stesen Sentral 5, Kuala Lumpur Sentral Kuala Lumpur T: F: