Malaysia's Proposed Competition Law Amendments
Introduction : Since the Competition Act 2010 and the Competition Commission Act 2010 started on January 1 2012 Malaysia’s competition law is about to get its big change. After the Dewan Rakyat passed the Competition (Amendment) Bill 2026 on July 6 2026 and the Dewan Negara passed the Competition Commission (Amendment) Bill 2026 on July 27 2026 both Bills are waiting for assent before they will be published. When the Bills take effect they will touch every stage of enforcement: the question of what is a regulated activity, how the Malaysia Competition Commission (MyCC) investigates and settles cases, how big the penalties are and how far an aggrieved party can appeal. The general merger control regime that MyCC promised in its 2022 public consultation paper is missing. This article looks at the changes in the law, considers how they will affect private enforcement, penalties, investigations and the reach of the sector and ends with a practical plan, for companies that operate in or want to enter Malaysia.
Legal Provisions
A. Competition (Amendment) Bill 2026 - Amendments to the CA 2010
1. Expanded Scope (Section 3): By replacing Section 3 of the CA 2010, the Act now covers "any commercial or economic activity" rather than just "commercial activity," expanding its application to organizations that engage in economic activity, including trade associations, cooperatives, non-profits, and government-affiliated organizations.
2. Collapse of the Horizontal/Vertical Distinction (Section 4): Section 4(2)'s deeming provision for hardcore infringements (price-fixing, market-sharing, output control, bid-rigging) is expanded from "horizontal agreement" to "agreement" generally, and Section 4(1) is amended to forbid "any agreement" - rather than just "horizontal or vertical agreements" - that has the object or effect of significantly preventing, restricting, or distorting competition.
3. Burden of Proof for Relief (Section 5): The provision is amended to expressly place the burden of proving the statutory criteria for relief from liability on the enterprise seeking it.
4. Enhanced Investigative Powers (Sections 11A, 16 and 18): A new Section - 11A gives MyCC the authority to demand information for market assessments from anyone, including government entities. In order to allow preliminary inquiries, warning letters, and the resumption of investigations in the event of an undertaking breach or additional material facts, Section- 16 is substituted. The scope of Section 18 has been expanded to include government entities as well as documents, specifics, and oral testimony.
5. Settlement Mechanism (Section 38A): A new statutory settlement regime allows an enterprise, after MyCC issues a proposed decision, to admit liability in exchange for a penalty reduction of up to 40%, on top of any leniency discount.
6. Late Payment Charges (Section 40(6)): Organisations that fail to pay monetary penalties within the given time are liable for charges at rates determined by MyCC.
7. Leniency and Coercion (Section 41(2)(ba)): MyCC may now vary - and reduce below 100% - the leniency discount available to an enterprise that coerced another into a cartel.
8. Narrowed Undertaking Window (Section 43): Undertakings may only be accepted before MyCC issues a proposed decision, and MyCC need not treat an investigation as closed where an undertaking is breached or was procured through materially false information.
9. Continuity of CAT Proceedings and Appeal to the High Court (Sections 54, 58A): Importantly, Section 58A eliminates the "final and binding" status of CAT rulings, granting any aggrieved party—including MyCC itself—a new right of appeal to the High Court on issues of law or penalty amount. New provisions allow CAT proceedings to proceed despite a member's incapacity.
10. Informer Protection and Rewards (Sections 64A, 64B): New provisions protect an informer's identity in MyCC, CAT or court proceedings and empower MyCC to grant monetary or other rewards for information leading to a conviction.
11. Obstruction Offence and Updated Exclusions: The Civil Aviation Authority of Malaysia Act 2017 and the Gas Supply Act 1993 and Postal Services Act 2012 have been added to the First Schedule's list of excluded sectors, making attempted (rather than merely completed) destruction, concealment, mutilation, or alteration of records illegal.
B. Competition Commission (Amendment) Bill 2026 - Amendments to the CCA 2010
1. Rebranding and Delegation: The Competition Commission is renamed the “Malaysia Competition Commission”, and a new Section 17A permits delegation of its functions to the Chairman, committees, officers or employees.
2. Expanded Financial and Advisory Powers: Section 17(2)(ba) empowers the Commission to impose financial penalties and late payment charges, while Section 17(2)(c) allows fees and administrative charges for services rendered; Section 16(a) expands the Commission's advisory remit to cover competition-related policies, procedures and programmes.
3. Appointment of Officers: Section 38 now requires Commission officers to be appointed in writing on the Chief Executive Officer's recommendation.
Legal Analysis
A. Commercial Effect of the Expanded Scope
Though it may be the most significant change in the Bills, the change from "commercial" to "commercial or economic activity" is surprisingly brief. It eliminates the interpretive cover that government-affiliated businesses, trade associations, cooperatives, and nonprofit organizations have traditionally used to claim they are completely outside of CA 2010. Businesses who collaborate with these organizations through standard-setting, cooperative marketing, or association-led pricing suggestions should anticipate Instead of testing the entity's official status, MyCC will test the "economic activity" level.
B. Vertical Agreements Lose Their Presumed Lower Risk
The Bills extend the deeming provision, which was previously limited to severe horizontal cartel action, to vertical arrangements like distribution, franchise, and licensing agreements by substituting "any agreement" for "horizontal or vertical agreement" in Sections 4(1) and 4(2). Under CA 2010's current safe-harbour thresholds (20% combined share for competitors, 25% individual share for non-competitors), companies have traditionally viewed resale price maintenance clauses, exclusive territories, and supply restrictions in vertical contracts as lower risk. However, these clauses may now be evaluated using the same deeming standard as horizontal price-fixing. This takes Malaysia closer to the EU's "object" examination under Article 101 TFEU, and companies shouldn't presume that vertical arrangements are intrinsically safer than horizontal ones until MyCC releases new rules.
C. Escalating Penalties and Investigative Exposure
Late payment charges, an uncapped power to impose fees and administrative charges, and the criminalisation of even attempted record destruction collectively raise the cost of both non-compliance and mismanaged engagement with MyCC. The broadened Sections 11A and 18 mean government-linked and regulated entities can no longer assume institutional status insulates them from information requests - a change that dovetails with the wider “economic activity” test.
D. Private Enforcement Gains Real Teeth
Although Malaysian courts have disagreed on whether a prior MyCC or CAT infringement finding is a prerequisite to suing, Section 64 of the current CA 2010 has long granted a private right of action for loss sustained from an infringement. Because Section 38A requires an admission of liability in exchange for a penalty discount, a settling enterprise effectively hands a ready-made evidential foundation to any claimant relying on the more permissive reading of Section 64. This turns what was intended to be a swift regulatory exit into a potential trigger for subsequent civil litigation, much as admissions under the EU and UK cartel-settlement regimes have fueled private damages actions there. This uncertainty now directly intersects with the new settlement mechanism.
E. Sectoral Reach Widens, Merger Control Still Missing
The First Schedule's exclusion list is being updated even as the "economic activity" terminology expands general coverage, highlighting the fact that sectoral exposure will continue to change gradually rather than being fixed by the current modifications alone. Although the Deputy Minister of Domestic Trade and Cost of Living has identified merger control as a priority under the 13th Malaysia Plan (2026–2030), Malaysia is still one of the few large countries without a general merger control framework. While this is going on, information sharing and coordination between merging competitors are still hampered by the Chapter 1 restriction.
F. A More Contestable - But Not Necessarily Faster, Appeal Landscape
Removing CAT's “final and binding” status and creating a Section 58A appeal to the High Court cuts both ways: businesses that win before CAT can no longer treat that as the last word, since MyCC may now appeal an unfavourable CAT outcome - just as it long sought, unsuccessfully, to do through judicial review.
Relevant Case Laws
A. Malaysia Competition Commission, versus Malaysia Airlines Bhd and AirAsia Bhd (Court of Appeal 27 April 2021; leave to the Federal Court refused 9 February 2022)
In 2016 CAT reversed MyCCs 2014 ruling that MAS and AirAsia's 2011 collaboration agreement violated Section 4(2)(b) by assigning routes. The Court of Appeal ruled that MyCC, a quasi-judicial decision-maker that becomes functus officio once it issues a finding, lacked locus standi to challenge CAT's decision because it was not "a person adversely affected" under Order 53. MyCC's attempt to contest that outcome through judicial review was successful at the High Court but was overturned by the Court of Appeal. The Federal Court rejected MyCC's leave request in 2022, solidifying CAT's ruling. MyCC can now pursue a statutory right of appeal rather than an inappropriate judicial review route, which is exactly the procedural dead end that Section 58A is intended to fill.
B. Grab Holdings Inc. & Ors v. Malaysia Competition Commission (Court of Appeal, March 2025)
A proposed RM86.77 million fine against Grab and its subsidiaries was overturned by the Court of Appeal, which determined that MyCC's inquiry was illegal due to its failure to notify the firms prior to compelling information under Section 18. The case shows that having power to get information through the new Sections 11A and 18 does not take away from fair procedures; in fact MyCCs wider responsibility makes proper notice and process even more important.
C. Malaysia Competition Commission, v. Leong Hup Feedmill Malaysia Sdn Bhd & Ors (“Chicken Feed Cartel”) (MyCC Decision, 22 December 2023; affirmed by CAT 11 February 2026)
CAT dismissed claims of unfair or unlawful procedure and unanimously affirmed MyCC's record RM415.5 million penalty against five poultry feed millers for coordinating price rises under Section 4. The case demonstrates the extent of exposure under the current regime—before the amendments' late payment charges and uncapped administrative fees are even taken into account—and the type of acknowledged, well-supported infringement that the new Section 38A settlement mechanism is intended to resolve earlier and more affordably for both parties. It is also MyCC's largest-ever penalty.
D. Gabungan Pertubuhan Teksi, Kereta Sewa, Limosin dan Teksi Lapangan Terbang Semalaysia v. GrabCar Sdn Bhd [2022] 1 CLJ 956 (High Court)
The High Court held that a prior finding of infringement by MyCC is a precondition to bringing a private action for damages under Section 64.
E. Thirteen Wings Sdn Bhd & Anor v. Heineken Malaysia Bhd & Anor (High Court, grounds delivered 24 November 2025)
The High Court deviated from GTSM by ruling that a Section 64 private action could be filed separately from any preceding Regulatory silence is legally neutral and does not eliminate the statutory right to sue, according to MyCC's ruling. The decision of the case, which is currently pending before the Court of Appeal, may significantly influence the practical bite of Section 64 and, consequently, the danger of subsequent litigation following a Section 38A settlement.
Practical Implications
1. Re-scope Compliance Coverage: Given the "economic activity" criteria, expand competition-law training and contract scrutiny beyond core commercial units to include participation in trade associations, CSR/non-profit partnerships, and the commercial divisions of government-affiliated organizations.
2. Re-audit Vertical Arrangements: Regardless of market share, distribution, franchise, licensing, and agency agreements should be examined for supply constraints, geographical exclusivity, and resale price maintenance that may now be considered anti-competitive.
3. Build a Settlement Decision Framework: Businesses should develop an internal escalation mechanism involving legal, compliance, and the board before accepting any settlement offer, comparing the 40% discount against downstream civil lawsuit risk, since a Section 38A acknowledgment may expose a company to subsequent private claims.
4. Tighten Document Retention and Investigation-Response Protocols: With attempted record destruction now a standalone offence and Section 18 information requests reaching further, legal hold policies and a defined internal point of contact for MyCC requests are essential; the Grab precedent shows procedural missteps by MyCC itself can also be challenged.
5. Strengthen Whistleblower Channels: Increased statutory protection for informants combined with financial incentives increases the possibility that internal concerns will reach MyCC directly; internal reporting systems ought to be reliable enough to serve as a legitimate initial point of contact.
Conclusion
The Bills confirm that Malaysia is moving decisively toward a more assertive, procedurally sharper and more litigation-exposed competition law regime even without a general merger control chapter. For businesses, the sensible response is not a one-off compliance refresh but an ongoing monitoring discipline.
A practical Malaysia competition-law monitoring plan should track:
(i) Royal Assent and the date of gazettement, as provisions may stagger the start.
(ii) MyCC rules and subsidiary regulations that make clear the previously unlimited late payment fines, charges, and settlement reductions.
(iii) The Court of Appeal's upcoming decision in Thirteen Wings, which will establish the actual scope of private proceedings under Section 64.
(iv) MyCC's recommendations regarding the updated vertical-agreement deeming criteria and the "economic activity" level.
(v) Merger control developments under the 13th Malaysia Plan (2026–2030).Businesses will be in a much better position than those who wait for the Bills' gazettement to begin responding if they incorporate this monitoring cadence into their compliance calendar immediately.
Author: Yashvi Chaturvedi in case of any queries please contact/write back to us via email to content@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney
References
Competition Act 2010 (Act 712) § 3 (Malay.).
Competition Act 2010 (Act 712) § 4 (Malay.).
Competition Act 2010 (Act 712) § 5 (Malay.).
Competition Act 2010 (Act 712) § 11A (as proposed by the Competition (Amendment) Bill 2026) (Malay.).
Competition Act 2010 (Act 712) § 16 (Malay.).
Competition Act 2010 (Act 712) § 18 (Malay.).
Competition Act 2010 (Act 712) § 38A (as proposed by the Competition (Amendment) Bill 2026) (Malay.).
Competition Act 2010 (Act 712) § 40 (Malay.).
Competition Act 2010 (Act 712) § 41 (Malay.).
Competition Act 2010 (Act 712) § 43 (Malay.).
Competition Act 2010 (Act 712) §§ 54, 58, 58A (Malay.).
Competition Act 2010 (Act 712) § 64 (Malay.).
Competition Act 2010 (Act 712) §§ 64A, 64B (as proposed) (Malay.).
Competition Commission Act 2010 (Act 713) §§ 2, 16, 17, 17A, 38 (Malay.).
Competition (Amendment) Bill 2026, D.R. (2026) (Malay.).
Competition Commission (Amendment) Bill 2026, D.R. (2026) (Malay.).
Malaysia Competition Commission v. Malaysia Airlines Bhd & AirAsia Bhd, Court of Appeal (Putrajaya), 27 Apr. 2021 (leave to appeal to the Federal Court dismissed, 9 Feb. 2022) (Malay.).
Grab Holdings Inc. & Ors v. Malaysia Competition Commission, Court of Appeal (Putrajaya), Mar. 2025 (Malay.).
Malaysia Competition Commission, Final Decision against Leong Hup Feedmill Malaysia Sdn. Bhd. & Ors. (22 Dec. 2023), aff'd, Competition Appeal Tribunal (11 Feb. 2026) (Malay.).
Gabungan Pertubuhan Teksi, Kereta Sewa, Limosin dan Teksi Lapangan Terbang Semalaysia v. GrabCar Sdn Bhd, [2022] 1 CLJ 956 (High Ct.) (Malay.).
Thirteen Wings Sdn Bhd & Anor v. Heineken Malaysia Bhd & Anor, High Court (Kuala Lumpur), grounds of judgment dated 24 Nov. 2025 (unreported) (Malay.).
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