Competition regulator seeks feedback on market review of digital economy

4 September 2025

On 26 August 2025, the Malaysia Competition Commission (“MyCC”) published a draft final report of its market review on the digital economy ecosystem (“Draft Report”) for public consultation. The consultation ends on 14 September 2025. 

The Draft Report sets out the MyCC’s preliminary recommendations to promote market competitiveness and ensure a level playing field for micro, small and medium enterprises and startups in Malaysia across the following sub-sectors:

• Mobile operating and payment systems;
• E-commerce or retail marketplaces;
• Digital advertising services;
• Online travel agencies; and
• Data privacy and protection (via a cross-sectoral analysis of the above sub-sectors).

For each sub-sector identified above, the MyCC has issued individual reports containing recommendations, which together form part of the Draft Report.

The Draft Report follows an earlier MyCC interim report on its market review. For more details, please see our article “MyCC issues interim report on market review of digital economy ecosystem under Competition Act 2010”.

This article summarises the key proposals.

Mobile operating and payment systems

The MyCC’s market review examines the main components of the mobile ecosystem, including mobile operating systems like Android and iOS, digital distribution channels such as Google Play Store and Apple’s App Store, and integrated payment systems like Apple Pay and Touch ‘n Go eWallet.

The Draft Report sets out the following recommendations which may affect industry players such as device manufacturers, operating system developers, and app developers:

• Comprehensive guidelines may be developed by the Ministry of Digital and the Ministry of Domestic Trade and Costs of Living to:
  • clarify that the parameters of the term “platform” includes mobile operating systems, app stores, and in-app purchase systems that are integrated into app stores;
  • ensure fair access to fundamental device features such as Bluetooth, a camera, and GPS;
  • ensure responsible use of data collected by app developers;
  • enable flexible commercial terms in relation to payment system options;
  • provide options for users to uninstall pre-installed apps, change default apps and transmit their data to another system; and 
  • establish fair and open processes for app review, listing and ranking, as well as interoperability and data transfer between systems.
• Regulation of in-app purchase systems by Bank Negara Malaysia, particularly in relation to commission fees charged to app developers, and expansion of the scope of the Financial Services Act 2013 to regulate digital platforms with integrated payment functionalities; and
• Establishment of a local consultative body to facilitate communication between developers and global platforms such as Apple, Google, and Huawei, and to provide localised guidance on platform policies and appeals.

The MyCC’s draft report on mobile operating and payment system is available here.

E-commerce

The Draft Report sets out the MyCC’s recommendations relating to online business-to-consumer marketplaces, merchants, and logistics players, including:

• amending the Electronic Commerce Act 2006 to impose obligations on online marketplaces to act fairly, conduct business transparently and protect consumers;
• encouraging marketplaces to provide merchants with access to platform data in order to promote transparency and enable merchants to make informed decisions;
• transferring responsibility for overseeing competition in postal and courier-related services from the Malaysian Communications and Multimedia Commission to the MyCC to consolidate competition oversight; and
• introducing a simplified licensing pathway to standardise the registration process for e-commerce merchants in Sabah and Sarawak (which currently do not adopt the Business Registration Act 1956) and expand the scope of “enterprise” to include all merchant types, such as individual merchants.

The MyCC’s draft report on e-commerce retail marketplaces is available here.

Digital advertising services

The MyCC has proposed the following recommendations for advertisers, ad intermediaries, ad publishers, and data management platforms promoting brands through online channels, including search engines, social media platforms, and websites:

• Develop guidelines for digital advertising players in Malaysia addressing the following issues:
  • Defining “platform” specifically for digital advertising intermediaries like Demand-Side Platforms and Supply-Side Platforms, and for platforms and publishers such as social media platforms and search engines;
  • Fair and transparent access to ad inventory and bidding, with responsible use of advertiser and publisher data;
  • Imposing restrictions on self-preferencing for own products and unfair targeting on consumers;
  • Providing options for users to opt out of personalised advertising and ensure that ads are labelled in a transparent manner; and
  • Ensuring transparent allocation and auction processes for ad inventory, providing fair, non-exclusive access to all inventory including premium placements.
• Provide support to local players in adopting cookie-less technologies, for example, tax incentives to companies adopting privacy-respecting ad tech; and
• Establish industry standards for ad performance metrics such as Cost Per Mile, Cost Per Action and Cost Per View to ensure consistency and transparency. 

The MyCC’s draft report on digital advertising services is available here.

Online travel agencies

The Draft Report examines the market for accommodation-related online travel agencies (“OTAs”), which are digital platforms connecting travellers with lodging providers such as hotels, hostels, and short-term rental accommodations (“STRAs”). The MyCC has proposed the following recommendations for the OTA sub-sector:

• Investigate price parity clauses imposed by OTAs on properties. This prevents properties from offering lower prices than those listed on OTAs, as such clauses may infringe the Competition Act 2010;
• Amend the Tourism Act 1992 to introduce new requirements to govern OTAs, focusing on platform responsibilities and governance, fairness and transparency, quality assurance, consumer protection and dispute mechanism; and
• Strengthen the legal framework for mandatory registration and operations of STRAs.

The MyCC’s draft report on OTAs is available here.

Moving forward

The MyCC is inviting feedback on the preliminary recommendations in the Draft Report. This is an opportunity for businesses, particularly those in the digital market sector, to share their views and help shape the final framework developed by the MyCC. Input from regulators, businesses, and the public is important to develop future policies that may affect how businesses operate in Malaysia’s digital economy.

Feedback on the proposals set in the Draft Report may be submitted via this form until 14 September 2025.

Further information

This article has been prepared with the assistance of Associates Siah An Gel and Mohamad Syafiq bin Mohamad Tazri.