Update On Malaysian Competition Law.

Legal News & Analysis – Asia Pacific - Singapore – Competition & Antitrust

1 June, 2015

 

Change Of Leadership At Malaysia Competition Commission
 
Dr Mohd Khalid Abdul Samad has been appointed the new Chief Executive Officer (“CEO”) of the Malaysia Competition Commission (“MyCC”) with effect from 6 January 2015.
 
According to a press release by MyCC, Dr Samad has worked in various capacities at several ministries and government agencies such as the Ministry of Finance, National Institute of Public Administration, Ministry of International Trade and Industry, Ministry of Information, Culture and Communications and the Public Service Department.
 
Dr Samad’s predecessor, Ms Shila Dorai Raj, was the first CEO of MyCC, and has been widely credited with establishing the competition regime in Malaysia and developing MyCC into a highly credible and active competition law enforcer since the Malaysian Competition Act 2010 came into force on 1 January 2012.
 
MyCC Tells Professional Bodies To Remove Scale Of Fees
 
MyCC published a media release in March 2015 stating that it had issued letters to four professional bodies requiring them to dismantle their scale of fees “in order to uphold the spirit of competition law”.
 
According to the press release “MyCC takes the view that scales of fees fixed by professional bodies are contrary to the provision of [the] Competition Act 2010”. MyCC also stated that one professional body, the Malaysian Institute of Arbitrators, has since dismantled its scale of fees.
 
In Singapore:
 
In 2008, the Institute of Estate Agents (“IEA”) applied for guidance from the CompetitionCommission of Singapore (“CCS”) on whether the IEA’s “Professional Fees/Commission for Real Estate Agents/Agencies” (“IEA Guidelines”) were likely to have the object or effect of restricting competition in the real estate agency market in Singapore, in contravention of section 34 of the Competition Act (Cap. 50B) (“Act”). CCS found that the Guidelines were likely to infringe the Act. CCS noted, in the executive summary of its decision, that “[p]rice recommendations tend to signal a focal point for fees/fee structures to converge. In this instance, the fee payable by sellers of all types of properties is couched as a “minimum” fee. Such minimum fee scales generally discourage price competition below the recommended rate. More efficient agents, who are able to charge lower fees, will have little incentive to do so and will tend to follow the minimum fee, if they believe others will do so.”
 
Similarly, in 2009, CCS received a formal application from the Singapore Medical Association (“SMA”) for a decision on whether its own Guidelines on Fees (“GOF”) would infringe the Act. CCS found that the GOF would contravene the Act, reiterating that, “[i]n general, price recommendations by trade or professional associations are harmful to competition because they create focal points for prices to converge, restrict independent pricing decisions and signal to market players what their competitors are likely to charge.”
 

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