28 January 2020
In many jurisdictions, it is recognised that companies may gain significant market power through mergers and acquisitions (“mergers”) and utilise their new-found position in the market to foreclose other market players, and/or raise prices or decrease quality of products to the consumers. Merger control regimes have thus been introduced in numerous jurisdictions to regulate Merger activities that take place within its jurisdiction.
Unlike other jurisdictions with competition laws in place, there is currently no general merger control regime under the Malaysian Competition Act 2010 (“CA”). The absence of a general merger control regime does not mean that the Malaysia Competition Commission (“MyCC”), the competition watchdog in Malaysia, does not have the authority to review a Merger transaction. Any behavioural conduct arising from a merger transaction will still be subject to the general prohibitions under the CA although the MyCC’s powers to interfere with or unwind a merger transaction is curtailed.
In Malaysia, two sectoral regulators have instead introduced their own merger control provisions to govern licensees who fall within their purview. The introduction of a sectoral specific merger control regime is also driven by the fact that the CA exempts commercial activities which fall under certain legislations from its provisions, including commercial activities regulated under the Communications and Multimedia Act 1998 (“CMA”) and the Malaysian Aviation Commission Act 2015 (“MACA”). In other words, any commercial activity carried out by licensees under the CMA and MACA will not be subject to the provisions of the CA and will be governed by its own sectoral regulators.