The Competition Act 2010 (Act 712) ("the Act") was enacted in order to protect the interests of consumers by the promotion of competition and the prohibition of anti-competitive practices.
The Act is broken up into several parts as follows:
Part I -Preliminary (Section 1-Section 3)
This Part sets out the commencement date of the Act, and the definition and interpretation of terms used therein.
It also sets out the application of the Act, which is to any commercial activity within Malaysia and to any commercial activity outside Malaysia which has an effect on competition on any market in Malaysia.
For the purposes of the Act, the term "commercial activity" does not include:
Part II - Anti Competitive Practices (Section 4-Section 13)
Prohibited anti-competitive practices as set out in this Part are:
|Horizontal and vertical agreements||Abuse of dominant position|
||Chapter 1, Sections 4-9||Chapter 2, Section 10|
|Prohibited practices||A horizontal or vertical agreement which has the object or effect of significantly preventing, restricting or distorting competition.
In relation to a horizontal agreement, this includes agreement with the object of:
|Any independent or collective conduct by an enterprise which amounts to an abuse of a dominant position in any market for goods or services.
Abuse of a dominant position may include:
However, a dominant enterprise is not prohibited from acting with reasonable commercial justification or responding with reasonable commercial justification to the market entry or conduct of a competitor.
|Relief of liability||Due to:
|Exemptions||Enterprises may apply to the Competition Commission ("Commission") for individual or block exemptions, in respect of a particular agreement or a particular category of agreements, as may be applicable, to which the grounds for relief of liability as set out above apply.|
|Exclusions (Second Schedule of the Act)||The prohibited anti-competitive practices set out in Part II of the Act shall not apply to:
*Note: Enterprise refers to a legal entity carrying out commercial activity. Where a subsidiary company does not enjoy real autonomy in determining its actions on the market, then it and its holding company are considered as a single enterprise.
Part II of the Act also provides that the Commission may conduct a market review either on its own initiative or upon the request of the Minister for Domestic Trade and Consumer Affairs, the findings of which review and recommendations thereof are to be published and made available to the public.
Part III - Investigation and Enforcement (Section 14-Section 34)
The Commission may conduct an investigation where it has reason to suspect that that any enterprise has infringed or is infringing any prohibition under the Act. In the course of such investigation, the Commission has the power:
Part IV - Decision by the Commission (Section 35-Section 43)
Pending completion of the investigation, the Commission may give such interim directions as it considers appropriate, if it deems that there is or there is likely to be an infringement and it is situation in which it is necessary to act urgently to prevent irreparable damage and to protect the public interest.
Once the investigation has been completed, if the Commission decides that there has been an infringement of one or more of the prohibitions in Part II, the Commission will forward a written notice to the relevant enterprise, informing them of such decision, of the proposed penalties to be applied, and of their option to make written or oral submissions to the Commission.
Notwithstanding the enterprise may exercise its option to make oral submissions to the Commission, the Commission may also conduct a hearing in order to determine whether there has been an infringement of a prohibition under Part II of the Act.
If the Commission finds that there has been no infringement, it shall so inform the affected party(ies) of its decision and the reasons therefor. If the Commission finds that there has been an infringement, it shall require the immediate ceasing of the agreement, and may specify the appropriate steps to be taken by the infringing enterprise to cease such practice or impose a financial penalty or give any other decision deemed appropriate. The Commission may bring proceedings before the High Court in the event of non-compliance with its directions.
This Part also sets out provisions for a leniency regime, where the penalty imposed on an enterprise which has admitted its involvement of a prohibition in respect of a horizontal agreement and has provided information or cooperation to the Commission which has or is likely to significantly assist the Commission in its investigation on other enterprise, may be reduced by up to 100%.
Part V - Competition Appeal Tribunal (Section 44-Section 60)
This Part provides for the establishment of a Competition Appeal Tribunal, which shall have exclusive, final and binding jurisdiction to review any interim decision and finding of infringement or non-infringement of the Commission. The Competition Appeal Tribunal may confirm or set aside the relevant decision or any part of the same, and may:
Part VI - General (Section 61-Section)
This Part sets out the general penalty for an offence committed under the Act for which no penalty has been expressly provided, which is:
for a body corporate, a fine not exceeding RM5,000,000.00, and for a second or subsequent offence, a fine not exceeding RM10,000,000.00; or
for person who is not a body corporate, a fine not exceeding RM1,000,000.00 or imprisonment for a term not exceeding 5 years or both, and for a second and subsequent offence, a fine not exceeding RM2,000,000.00 or imprisonment for a term not exceeding 5 years or both.
It also provides for an officer of a body corporate which has committed an offence under the Act to be charged jointly and severally in the same proceedings as the body corporate, and if the body corporate is found to have committed the offence, the office would also be deemed to have done the same unless it was done without his consent, knowledge or connivance and he had taken all reasonable precautions and exercised due diligence to prevent the commission of the same.
Also, if a person is liable for any punishment or penalty for his act, omission, neglect or default, he will be liable for the same punishment or penalty for the act, omission, neglect or default of his employee or agent, acting in, and committed on his behalf.
Further, any person who suffers damage or loss as a result of an infringement of a prohibition shall have a right of private action in civil court against the enterprise committing the infringement.
This Part also sets out the Minister's power to prescribe compoundable offences and to make regulations, as well as the Commission's power to issue guidelines.