Introduction
The Malaysia Competition Commission (“MyCC“) has, in early March 2025, published an Interim Report on the Market Review of the Digital Economy Ecosystem (“Interim Report“) following its latest market review exercise on the digital economy ecosystem in Malaysia (Digital Economy Market Review) conducted pursuant to powers conferred by Section 11 of the Competition Act 2010.
MyCC had chosen this sector for market review as it recognised how rapidly Malaysia’s digital economy sector has grown in recent years and the fact that growth could introduce potential competition issues that must be addressed to ensure a balanced and thriving digital marketplace.
MyCC deep dived into the following four sub-sectors in the Interim Report (“Selected Sub-Sectors“) focusing on (i) market structures and supply chains; (ii) levels of competition; (iii) market practices; (iv) consumer behaviour; (v) innovation trends; (vi) relevant regulations; and (vii) key competition, market and regulatory-related issues:
- Mobile Operating and Payment Systems;
- E-Commerce (Marketplace);
- Digital Advertising Services; and
- Online Travel Agencies (“OTAs“).
Given the critical role of data in the business models of these Selected Sub-Sectors, MyCC also examined two key data-related areas, i.e. data privacy and data protection.
Potential Anti-Competitive Issues
Some of the anti-competitive practices observed by MyCC include:
- high entry barriers, limited app distribution avenues, restrictive payment options and potential self-preferencing practices by key players in the mobile operating and payment system market;
- opaque product ranking processes, preferential treatment to larger merchants, exclusive dealing, potential self-preferencing by using data to gain competitive advantage and masking of delivery options by key players in the e-commerce market;
- vertical integration of incumbent players, opaque algorithms and auction processes, limited access to selected ad inventory practices by key players in the digital advertising market; and
- price parity and opaque practices by key players in the OTA market.
MyCC Seeking Feedback on Interim Report
MyCC is currently seeking feedback from the public regarding the Interim Report before finalising its findings and publishing a final report. Stakeholders are invited to submit their comments and feedback to MyCC between 4 March 2025 and 31 March 2025. Submissions can be uploaded in the designated section on MyCC’s website or emailed directly to ced-digitalmr@mycc.gov.my.
Conclusion
In line with global trends, Malaysia has seen a rise in anti-competitive cases and allegations. As highlighted by MyCC in the Interim Report, since 2023, MyCC has received a total of 20 public complaints, the majority of which relate to unfair trading practices between suppliers and customers. Common issues include restrictions on choosing courier providers, unreasonable withholding or release of funds, and unfair operational policies. MyCC also highlighted that complaints have been raised regarding practices that limit market access, such as restricting users who prefer overseas sellers in e-commerce or denying platform access despite the submission of required documentation.
Given that many of MyCC’s findings relate to competition issues that could potentially raise concerns under the Competition Act 2010, it is advisable for enterprises engaged in such practices to take proactive measures to ensure compliance with the Competition Act 2010. This will help avoid or mitigate any potential competition law-related liabilities that may arise in the future.
If you have any comments in respect of the Interim Report which you would like submitted to MyCC or have any comments on the above, please reach out to Yon See Ting (see.ting.yon@christopherleeong.com) or Jane Guan (jane.guan@christopherleeong.com).
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