Malaysia has not introduced a cross-sectoral merger control law. The Competition Act 2010 (CA) sets out prohibitions on anticompetitive agreements and abuses of dominance, but not merger control. While mergers are not expressly excluded from the scope of the CA, there is acceptance that the competition regulator, the Malaysian Competition Commission (MyCC), has only review and enforcement powers in respect of behavioural conduct but no merger control mandate.

There are, however, sector-specific laws and guidelines that regulate the antitrust aspects of mergers. The sectors are aviation services, and communication and multimedia sectors, enforced by the Malaysian Aviation Commission (MAVCOM), and the Malaysian Communications and Multimedia Commission (MCMC) respectively.

These sectoral regulators also enforce competition rules for their sector, which includes prohibitions on anticompetitive agreements or conduct as well as abuses of dominance. The merger jurisdiction in each of these sectors will be discussed in turn in each section of this chapter.

i Aviation services sector

The Malaysian Aviation Commission Act 2015 (MACA), which came into force on 1 March 2016, gives MAVCOM full and sole authority for competition issues in the aviation services sector.2 The provisions on competition and in particular merger control, are set out in Part VII Division 1 of the MACA. Section 54 prohibits mergers that have resulted, or may be expected to result, in a substantial lessening of competition in any aviation service market.

The term ‘aviation service' is defined in Section 2 of the MACA as any of the following services:

a the carriage of passengers, mail or cargo for hire or reward by air or by the use of any aircraft between two or more places, of which at least one place is in Malaysia;

b the provision in Malaysia of any of the ground handling services as specified in the Second Schedule;

c the operation of an aerodrome in Malaysia for the take-off and landing of any aircraft engaged in the carriage of passengers, mail or cargo for hire or reward; or

d any other service determined by MAVCOM to be necessary or expedient for the carriage of passengers, mail or cargo referred to in paragraph (a), whether or not such service is provided by a licensee, permit holder or otherwise.

As sector regulator, MAVCOM has wider responsibility for the regulation of economic and commercial matters within the civil aviation industry.

Its responsibilities include the issuance of air services licences (ASL) for journeys with a fixed schedule, such as for timetabled commercial flights and air service permits (ASP) for non-scheduled services, such as for chartered flights. MAVCOM also issues out aerodrome operator licences (AOL) for airport operators and ground handling licences (GHL) to those who wish to carry out ground handling services in Malaysia.3

Its responsibilities also cover the administration and allocation of air traffic rights to airlines based on the available capacity of each route and the approval of schedule filing. It monitors slot allocation for airlines or other aircraft operators.

It is worth noting that MAVCOM (as sector regulator) has a wider range of ex ante regulatory tools to achieve its outcomes for the sector. It is also likely that competition enforcement will take into account the broader range of regulatory objectives for the sector. For example, the goals of the MACA include:

  • a to encourage effective competition within the civil aviation industry by promoting an economic environment that allows Malaysian carriers to maintain their ability to compete effectively in the civil aviation market in a sustainably profitable, efficient and fair manner;
  • b to maximise the economic value of any financial support granted by the federal government to the civil aviation industry and to seek and promote ways to reduce any such financial support over time; and
  • c to promote an environment for consumers in relation to the civil aviation industry to have access in a transparent manner to choices of products and services of high quality and at fair prices.

The MACA therefore gives MAVCOM an important margin of discretion in prioritising these regulatory objectives as well as the means to achieve them.

Definition of a merger

Pursuant to Section 54(2) of the MACA, a merger is deemed to occur if:

  • a two or more undertakings, previously independent of one another, merge;
  • b one or more persons or other undertakings acquire direct or indirect control of the whole or part of one or more other undertakings;
  • c as the result of the acquisition by one undertaking (the first undertaking) of the assets (including goodwill), or a substantial part of assets, of another undertaking (the second undertaking) is to place the first undertaking in a position to replace or substantially replace the second undertaking in the business or, as appropriate in the part concerned of the business in which the undertaking was engaged immediately before the acquisition; or
  • d a joint venture is created to perform, on a lasting basis, all the functions of an autonomous entity.

Section 48 read together with the Third Schedule lists excluded commercial activities, agreements and mergers.

Applicability to joint ventures

The MACA treats full-function joint ventures as mergers. The criteria for what constitutes a full-function joint venture is not set out in the law. Given the similarity in the provisions in the MACA and the Singaporean Competition Act, and until MAVCOM issues its guidelines on the matter, practitioners tend to refererence the position in Singapore for guidance on how the provisions might be interpreted in Malaysia.

Having said that, important distinctions remain between the Singapore Competition Act provisions and the MACA. It is understood that in Singapore, mergers are expressly excluded from the application of the prohibition on anticompetitive agreements and abuse of dominance. It is noteworthy that the MACA does not provide for the same exclusion and it is also not clear whether this is intentional. This suggests that joint ventures could be subject to both merger review as well as the prohibition against anticompetitive agreements, which would complicate the review process significantly. For one, the substantive test applied is different (substantial lessening of competition) than for joint ventures (prevention, restriction or distortion of competition).

This in turn would deter some pro-competitive joint ventures. It is hoped that MAVCOM will provide clarity on this point.

The treatment of full function joint ventures as mergers in the aviation services sector is also an important development for the aviation sector in the wake of increasing collaboration between airlines via alliances and code sharing, and involving varying degrees of integration of operations. Merger regulations introduce another vehicle through which airlines may structure collaborations.

Foreign-to-foreign mergers

The prohibition under Section 54 of the Act may apply even where the merger takes place outside Malaysia or where the merger is located outside Malaysia, so long as the merger could have an effect on any market affecting Malaysia.

Jurisdictional thresholds

As of now, MAVCOM has laid down several de minimis thresholds on mergers. It is unlikely to investigate unless:

  • a the combined turnover of the merger parties in Malaysia in the financial year preceding the transaction is at least 50 million ringgit; or
  • b the combined worldwide turnover of the merger parties in the financial year preceding the transaction of the merger parties is at least 500 million ringgit.

Parties are expected to conduct a self-assessment to establish whether a merger can give rise to a substantial lessening of competition within any market affecting Malaysia and whether a merger notification should be made to MAVCOM.

ii Communications and multimedia sector

The Communications and Multimedia sector in Malaysia is regulated by the Malaysian Communication and Multimedia Commission (MCMC) under the CMA. The CMA has been expressly carved out of the application of the general competition legislation (i.e., CA).4

The MCMC oversees the regulatory framework for the converging industries of telecommunications, broadcasting and ICT industries. It is also the body through which the government implements and promotes its national policy objectives for the communications and multimedia sector. The MCMC licenses players in this sector and its jurisdiction as competition regulator extends over licensees. The MCMC clearly contemplates that the objective of promoting competition must be consistent with national policy objectives. As sector regulator, it has ex ante powers - intervention before the fact, e.g., price control and access conditions. It has also ex post enforcement powers. As with MAVCOM, the MCMC has a margin of discretion to prioritise these national objectives as well as the means to achieve them.

The CMA's merger control provisions are more oblique (when compared to the MACA). It was clarified more recently by MCMC during Public Inquiry Process which led to the Public Inquiry Report - Assessment of Dominance in Communications Market (dated 24 September 2014) and revisions to both the Guideline on Substantial Lessening of Competition (the SLC Guideline) as well as the Guideline on Dominant Position (the DP Guideline) where MCMC expressed its intention to monitor mergers and acquisitions that have the potential to substantially lessen competition more closely using the existing regulatory framework in the CMA - namely sections 133, 139 and 140. In essence these set out the three (3) main prohibitions on that relate to anticompetitive conduct:

  • a Section 133 expressly forbids conduct which has the purpose of substantially lessening competition;
  • b Section 139 gives the MCMC power to direct a licensee in a dominant position to cease conduct that has the effect of substantially lessening competition; and
  • c Section 140(1): a licensee may apply to the Commission, prior to engaging in any conduct that may be construed to have the purpose or effect of substantially lessening competition in a communications market, for authorisation of the conduct.

The MCMC has published the following to clarify its approach in administering the prohibitions under this Chapter:

  • a the SLC Guideline, 24 September 2014;
  • b the DP Guideline, 24 September 2014; and
  • c the Market Definition Analysis - Definition of Communications Market in Malaysia 24 September 2014.

On mergers, paragraph 4.40 of MCMC's SLC Guideline states that the MCMC regards mergers to be ‘conduct' falling within the scope of Sections 133 and 139 of the CMA. The MCMC has also said that it is presently developing guidelines (both substantive and procedural) for the merger review regime.

There was some disagreement expressed by licensees with the MCMC's treatment of mergers and acquisitions as a type of conduct that is subject to sections 133 and 139 of the CMA on the basis, inter alia, that mergers and acquisitions can generate certain benefits and therefore should not be regarded as prohibited conduct.

The MCMC, however, took the view that it does not consider the potential positive benefits of a merger or acquisition to be a valid reason to exclude mergers and acquisitions from the application of Sections 133 and 139. Any positive benefit of a merger or acquisition will be considered when assessing an authorisation application under Section 140.

In response to calls for further clarity on how merger parties may approach the MCMC regarding a proposed merger and for the MCMC to develop a procedural framework for the assessment of mergers and acquisitions, the MCMC has said that it intends to issue a separate guideline on mergers and acquisitions and will consider all of the comments from respondents in the development of those guidelines.

MCMC's merger guidelines have not been issued as yet. It is understood that there are amendments pending to the CMA that will inter alia will seek to rationalise the competition provisions in the CMA with that of the CA and MACA. This would be a positive development for competition law in Malaysia as streamlining the competition principles will go some way towards promoting consistency and coherence in the application of competition laws in Malaysia, despite the existence of multiple authorities with jurisdiction to implement competition principles in their respective sectors.

Definition of a merger

MCMC regards mergers and acquisitions to be ‘conduct' and therefore subject to sections 133 and 139 of the CMA. The SLC Guidelines provide that mergers or acquisitions can take the following forms:

  • a a horizontal merger or acquisition, which involves the merger of two firms, or the acquisition by one firm of another, at the same functional level of the supply chain;
  • b a vertical merger or acquisition, which involves firms at different functional levels of the market; and
  • c a conglomerate merger or acquisition, which is a merger or acquisition that is neither a horizontal or vertical merger.

Not all mergers or acquisitions will raise competition concerns. However, a merger or acquisition may raise competition concerns if it lessens competition by reducing or weakening the competitive constraints in a market or reducing the incentives for competitive rivalry.

Accordingly, MCMC have said that they will closely monitor mergers or acquisitions where:

  • a the merger or acquisition results in a licensee obtaining a dominant position in a market; or
  • b where one of the parties to the merger or acquisition is already in a dominant position.
Applicability to joint ventures

It is hoped that there will be more clarity on the treatment of joint ventures as mergers when the merger guidelines are issued.

Foreign-to-foreign mergers

The CMA provides for extraterritorial jurisdiction. The CMA and its subsidiary legislation applies to any person beyond the geographical limits of Malaysia and its territorial waters if such person:

  • a is a licensee under this Act; or
  • c provides relevant facilities or services under this Act in a place within Malaysia.5

It should be noted that the competition provisions under the CMA apply only to licensees. The four (major) individual licence categories under the CMA require licensees to be companies incorporated in Malaysia as a standard licence condition.

Jurisdictional thresholds

There have been no jurisdictional thresholds prescribed by MCMC. The MCMC has said that a high market share (as an indicator of dominance) would be a market share of more than 40 per cent. This is useful to the extent that MCMC has highlighted that it intends to monitor mergers involving dominant entities or that create dominant entities.


i Aviation services sector

MAVCOM is currently developing guidelines to clarify and illustrate the application of Part VII (Competition) of the MACA. The guidelines are targeted to be issued and published latest by the end of 2017. Until then, it is understood that MAVCOM will review notifications on a case-by-case basis. It has provided contact details on its website for merger notifications, which conveys that the provisions in the law are fully operational.

ii Communications and multimedia sector

It is understood that the MCMC is already reviewing applications for mergers and acquisitions in the sector. It not clear whether clearance comes in the form of a no-objection letter or authorisation. Where the MCMC authorises conduct, it is required to maintain a register of current authorisations of a conduct. This register is not available on its website which suggests that there have been no authorisations given in respect of mergers and acquisitions, though this does not exclude the possibility of no-objection letters being issued.


i Aviation services sector
Voluntary regime

MACA provides for a voluntary merger control regime, so parties can implement the transaction before clearance. Alternatively, parties may apply for a decision from MAVCOM on whether a merger infringes the Section 54 prohibition.

A decision by Commission is in the form of a finding of infringement under Section 59(1) or non-infringement under Section 58. Actions that MAVCOM can take where an infringement is found include the following:

  • a orders to cease infringement immediately;
  • b specify steps that are required to be taken by an infringing enterprise that are appropriate to bring an infringement to an end, for example, unwinding orders;
  • c financial penalties that shall not exceed 10 per cent of the worldwide turnover over the period during which an infringement occurred; or
  • d any other direction that MAVCOM deems appropriate.

Parties should therefore consider timing of implementation measures that are difficult or costly to unwind, if they choose to proceed with a merger that has yet to receive clearance from MAVCOM.

The Commission is required to prepare and publish reasons for each decision it makes.

Regime where parties do not apply

MAVCOM may launch an investigation at any point - pre or post-closing of a transaction - whether or not the parties have made an application for clearance. An authorised officer has the power to conduct investigations on suspicion of infringement, attempts to commit infringement or conspiracy to commit infringement. In addition to MAVCOM's power to make a finding of infringement or non-infringement pursuant to Sections 58 and 59 of the Act when its investigation powers have been invoked, an authorised officer can issue a compliance order if satisfied of an infringement or likely infringement. The compliance order can require a person to refrain from conduct in contravention of the Act or to take actions required in order to comply with the Act.

Interim measures

Section 57 sets out MAVCOM's power to issue interim measures. This power only arises upon commencement of an investigation but which has not been completed. In other words, it is only available in context of an investigation. No specific provision to issue interim measures in connection with an application for clearance exists (in contrast Singapore's Competition Act provisions that set out two different interim measure provisions - one in the context of an application for clearance and the other in the context of an investigation).

Interim measures are directions to:

  • a suspend the effect of or desist from acting in accordance with any agreement;
  • b desist from any conduct which is suspected to infringe a prohibition; and
  • c to do or refrain from doing any act (but which shall not require the payment of money).
Timing for notification

Parties can apply any time before or during the merger (anticipated merger) or after (resulting merger).

Time frame for review

There are no statutory time frames for review prescribed under the law. We anticipate that these matters will be dealt in the guidelines. Until then we expect the process to involve preliminary discussions with MAVCOM on the process, time frames and criteria on a case-by-case basis.

Pre-notification discussion

We anticipate that these matters will be dealt in the guidelines. MAVCOM asks parties to e-mail them with questions on notification.6

Non-suspensory regime

The regime is a non-suspensory regime. Parties may give effect to or proceed with mergers at their own commercial risk. MAVCOM has the power to unwind mergers that have been given effect to and even to impose financial penalties if it decides that the merger infringes the prohibition in Section 54 of the MACA.

Undertakings and remedies

MAVCOM may accept undertakings from an enterprise to do or refrain from doing anything that the MAVCOM considers to be appropriate. Where MAVCOM accepts an undertaking MAVCOM may close an investigation without a finding of infringement. These undertakings are enforceable if they form part of a decision of MAVCOM.

In terms of remedies, the powers given to MAVCOM appear broad enough to cover structural and behavioural remedies.


A party affected by an infringement decision by the Commission may within 14 days from the date notice of the decision is given, apply to the Minister for an exemption from the prohibition on the ground of public interest considerations.

Rights of appeal also exist to the High Court pursuant to Section 88(1) of the MACA, within three months beginning on the date on which the decision was communicated to the ‘person or body aggrieved by the decision'.

ii Communications and multimedia sector

In assessing whether a merger or acquisition has the purpose or effect of substantially lessening competition in a relevant market, MCMC will consider the following factors.

The degree of concentration in the market with or without the merger or acquisition taking place

A merger or acquisition that leads to a significant increase in market concentration is more likely to substantially lessen competition (although concentration is not in itself determinative). MCMC will consider the extent to which competitors remaining in the market post-merger will constrain the level of competition in the market.

The extent of barriers to entry into the market

The MCMC's perspective on barriers to entry is discussed in the DP Guideline. Where a merger or acquisition brings about an increase in market concentration, low barriers to entry may nevertheless result in the merger or acquisition having no substantial effect on competition in the market, as new entrants can constrain the behaviour of the merged firm.

The effect of the merger or acquisition on the relevant firm's ability to raise prices

A lowering of competitive constraints on the relevant firm after the merger or acquisition, conveyed through its ability to raise prices above the competitive level, may indicate that the merger or acquisition has the effect of substantially lessening competition in the market.

The level of dynamic competition in the market

A merger or acquisition that leads to an increase in market concentration may not necessarily have an anticompetitive effect in a dynamic market, where future competition may be fuelled by growth and innovation.

The degree of countervailing buyer power

Countervailing buyer power may function as a competitive constraint on a licence post-merger, even where the merger or acquisition brings about greater concentration in the market.

The existence and degree of any efficiencies brought about by the merger or acquisition

In its analysis, MCMC will consider the potential beneficial effects that a merger or acquisition may have on competition. For example, mergers and acquisitions may provide efficiencies through economies of scale and the pooling of research and development. In particular, the efficiencies resulting from the merger of two smaller players in the market may actually increase competition, by providing a more powerful constraint on larger or dominant players in the market.

The MCMC may require a range of quantitative and qualitative information from parties to a merger or acquisition when assessing whether a merger or acquisition is likely to raise competition concerns. Some examples of information that the MCMC may require include:

  • a recent sales figures (by volume and by value) of each competitor in the market, so as to allow the MCMC to calculate market shares;
  • b information relating to the size of investment required for a potential competitor to enter the market;
  • c economic data relating to price elasticity in the market, so as to determine the effect of a possible price increase on demand and therefore to assess the ability of the merged firm to raise prices above the competitive level;
  • d data relating to current pricing and profit margins of the parties, and projected prices and profit margins after the merger or acquisition;
  • e data relating to the market's size, growth prospects; and
  • f level of innovation, to assess the level of dynamic competition in the market.
Voluntary regime

Section 140(1) provides that a licensee may apply to MCMC, for authorisation of the conduct. It is essentially a voluntary regime. Given MCMC's regulatory leverage, licensees tend to err on the side of caution and consult MCMC, particularly since MCMC has expressed an interest in monitoring mergers in the sector.

Section 143 CMA provides for criminal penalties for contravention of any prohibition of Chapter 2 Part VI, which includes a fine not exceeding 500,000 ringgit or imprisonment for a term not exceeding five years or to both. A person may further be liable to a further fine of 1,000 ringgit for every day or part of a day during which the offence is continued after conviction.

Further administrative actions available to the MCMC include the following:

  • a Section 37 - right of the Minister, on the MCMC's recommendation, to suspend or cancel a licence where the licensee fails to comply with a provision of the CMA.
  • b Section 33 - minister may modify, vary, revoke or impose further special or additional conditions to an existing licence.
  • c Section 139 - the MCMC may issue a direction to licensees to cease conduct that substantially lessens competition and implement appropriate remedies.7
Interim measures

MCMC or any person may seek an interim or interlocutory injunction against any prohibited conduct through the courts.

Timing for notification

Section 140(1) provides that a licensee may apply to the MCMC, prior to engaging into any conduct which may be construed to have the purpose or effect of substantially lessening competition in a communications market.

In the case of public listed companies, the application for approval should ideally be submitted after announcement of a transaction to minimise the risk of leakage of price-sensitive information and disenfranchisement of minority shareholders. As completion of a transaction can be made subject to regulatory approval, it is likely that this would still qualify as prior approval.

Time frame for review

There have been no time frames prescribed by the Commission at this juncture.

Suspensory regime

Where parties apply for authorisation, the regime can be described as a suspensory as the application for authorisation is for prior approval of the conduct. There is, however, no requirement to seek authorisation.


Prior to authorising any conduct, the MCMC may require the licensee to submit an undertaking regarding the conduct in any matter relevant to the authorisation.


Section 120 of the CMA provides for rights of appeal to the Appeal Tribunal by a person who is aggrieved or whose interest is adversely affected by a decision or direction (but not a determination) of the Commission.

Section 121 of the CMA preserves the right to judicially review the decisions of the Commission provided that all remedies under the CMA are first exhausted.


Malaysia remains a notable exception to the general trend within jurisdictions in East Asia to adopt a merger control regime as part of their competition law framework. The aviation and communications, and multimedia sectors are exceptions in this regard. MAVCOM and MCMC have expressly indicated that merger guidelines will be issued. This will provide much needed clarity on their approach in regulating the mergers and acquisitions in these sectors. The rumoured amendments to the CMA are also being closely watched to see if they introduce a merger regime similar to that of the MACA. The merger control provisions in the MACA provide a useful template that could be broadened to other sectors (such as the communications and multimedia sector) and the broader economy via amendments to the CA, if and when cross-sectoral merger control provisions are introduced.

Shanthi Kandiah

SK Chambers

Shanthi Kandiah is the head of SK Chambers, legal and regulatory advisers specializing in competition law, telco regulatory, data protection and cybersecurity. Her competition law practice covers cartels, sectoral competition laws, including merger control. She regularly advises many corporations in sectors such as media and telecommunications, aviation, FMCG, construction, pharmaceuticals and other service industries covering issues ranging from competitor collaborations, cartels, pricing and rebate policies, and compliance. Noteworthy recent assignments include defending clients in a cartel allegation (involving highest proposed fines to date in Malaysia), advising on a full-function joint venture in the aviation services sector and successfully securing a no objection letter for an acquisition in the communications and multimedia industry. Shanthi has a master's in law from King's College London. She holds a postgraduate-diploma in competition economics also from King's College.


9B Jalan Setiapuspa,

Bukit Damansara

50490 Kuala Lumpur

Tel: +60 3 2011 6800

Fax: +60 3 2011 6801



1 Shanthi Kandiah is the founding partner at SK Chambers.

2 The MACA has been expressly carved out of the application of the general competition legislation (i.e. the CA).

3 See www.mavcom.my/en/industry.

4 Section 3 of the CA provides that the Act ‘shall not apply to any commercial activity regulated under the legislation specified in the First Schedule'. The First Schedule specifies the CMA.

5 The CMA further provides that ‘a place' means a point of any nature or description whether on land, in the atmosphere, in outer space, underground, underwater, at sea or anywhere else.

6 For information on the notification of an anticipated merger or a merger, MAVCOM asks parties to e-mail them at competition@mavcom.my.

7 The CMA does not offer insights on what these remedies might be. The MCMC has the power to determine what the appropriate remedy might be subject to the objects of the Act, national policy and any directions issued by the Minister.