Over the past few days, there were calls for the Malaysia Competition Commission (MyCC) to act on potential anti-competitive and monopolistic activities in the telecommunications industry. The Federation of Malaysian Consumers Associations (FOMCA) has urged the MyCC to step in to prevent the merger between Celcom and Digi, while UMNO Youth has also urged the MyCC to probe Digital Nasional Berhad’s business model. Unfortunately, the MyCC will not be able to look into telco related matters and they have released a statement to explain why.
Their statement released yesterday said while the Competition Act 2010 applies to any commercial activity within Malaysia, the Act clearly stipulates that it does not apply to telecommunications. As listed out under the First Schedule, the Act shall not apply to the Communications and Multimedia Act 1998, Energy Commission Act 2001, Petroleum Development Act 1974 and Malaysian Aviation Commission Act 2015. This means telcos, energy, petroleum, and airlines are out of their jurisdiction.
It added that telecommunication activities are subject to the scrutiny of the Malaysian Communications and Multimedia Commission (MCMC). It is the MCMC’s responsibility to regulate mergers within the telecommunications sector and other competition matters through the provisions of the Communications and Multimedia Act 1998.
On the Celcom-Digi development, MyCC says it leaves the matters related to the said proposed merger to the wisdom of the MCMC and is certain that careful assessment and evaluation had been carried out by MCMC before reaching its decision.
MyCC CEO Iskandar Ismail said their current amendment exercise which will lead to the introduction of a merger control regime in Malaysia is on track. However, it will still exclude sectors under the purview of the MCMC but it hopes that the future decisions by MyCC on merger applications will be the main reference and guide for all other authorities in ensuring a consistent and robust policy landscape that will create certainty in the market.
Last week, the MCMC has announced the approval of the Celcom-Digi merger after the two telcos have agreed to several undertakings to address competition concerns. This includes returning 70MHz of total spectrum to the MCMC, forming an independent business to handle MVNO operations, divesting Yoodo and removing exclusive distributors in several states. The Celcom-Digi merger will form Malaysia’s largest telco, which is bigger than Maxis. This leaves just two dominant mobile players in the country, besides U Mobile, Telekom Malaysia and YTL Communications.
MyCC had previously issued RM10 million fines to AirAsia and Malaysia Airlines over a short-term collaboration that was seen as anti-competitive. However, their bid to reinstate the fines was rejected by Federal Court, and the MyCC was ordered to pay RM60,000 in costs to both airlines.
