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THE Malaysia Competition Commission (MyCC) was established to enforce the Competition Act 2010, to safeguard the process of free and fair competition for the benefit of consumers.
All commercial activities, with the exception of those in the telecommunications, energy, petroleum and aviation industries, are regulated under the Competition Act 2010.
Even though the MyCC does not have a mandate on mergers – a proposal apparently is being tabled to amend the competition laws to do so – and the aviation industries, it still investigated the short-lived collaboration between MAS and AirAsia in 2012, and its impact on consumer welfare.
After investigations, both airlines were fined RM10 million by the MyCC as their partnership broke competition laws.
Citing the Competition Act 2010, the MyCC concluded that the collaboration brought suffering to the economic interests of consumers.
The said fine was later annulled by the Federal Court after a series of appeals.
Was the MyCC’s silence on the merger between Celcom and Digi influenced by its battle with MAS and AirAsia?
According to the lawyer representing AirAsia in the appeal, both airlines had previously approached the MyCC to ensure they had complied with competition law.
Meanwhile, the Malaysian Communications and Multimedia Commission (MCMC) announced recently that, after conducting a thorough assessment on the merger, it gave the go ahead for the proposed merger between Digi Bhd (Digi) and Celcom Axiata Bhd (Celcom).
The MCMC, in its announcement, stated that it was satisfied with the commitment offered by the applicants with both telcos submitted an undertaking to address competition issues highlighted by the commission to reduce competition issues that may arise as a result of the merger.
With the merger, there would only be two competing corporations in the telecommunications sector: the merged company that will have a combined market share of approximately 67% and Maxis.
This clearly indicates a high level of concentration in the telecommunications sector.
With reducing competition, would this result in higher prices and lower quality, thus hurting consumers?
In the communications market, dominance is likely to be established if the merged entity has a market share of 40% or more.
The threshold for dominance in the communications market, which is 60% or more due to its highly concentrated nature, is significantly lower than that adopted by the MyCC in general.
Already on March 29, 2022, Communications and Multimedia Minister Annuar Musa was quoted to have said that he is not impressed with the record profits enjoyed by the telcos when they are still unable to provided satisfactory services to the people, specifically those in the rural areas.
On June 14, 2022, again the minister was quoted to have said that he has ordered MCMC to test if the internet speed as good as telcos claim.