(Kuala Lumpur, 19th) Malaysia has significantly amended its Competition Act, granting the regulatory body stronger powers to investigate anti-competitive conduct, curb harmful business practices, and encourage companies to cooperate early in investigations. However, due to the continued absence of a merger control regime, a major gap remains in the country’s competition regulatory framework.
On July 7th, the Dewan Rakyat passed the Competition (Amendment) Bill 2026 and the Competition Commission (Amendment) Bill 2026. This marks the most substantial reform of the Malaysian competition law framework since the Competition Act first came into force in 2010.
These bills still require approval from the upper house and royal assent before taking effect. Once enacted, they will greatly strengthen the Malaysian Competition Commission’s (MyCC) enforcement powers and mean that companies will bear greater compliance responsibilities.
For businesses, this means that future commercial arrangements, industry practices, and relationships with competitors, suppliers and distributors will all be subject to stricter scrutiny.
Dr Ridoan Karim, Senior Lecturer in the Department of Business Law & Taxation at Monash University Malaysia, told BusinessToday: "The rules of fair competition are stricter, and the referee (regulator) also possesses greater enforcement powers."
Enlarged Enforcement Scope and Enhanced Regulatory Powers
Dr Ridoan pointed out that one of the most critical changes in this amendment is that the legal scope has expanded from "commercial activity" to "commercial or economic activity".
While this is a change in wording, the broader definition means industry associations, certain non-profit arrangements, and other activities with significant economic impact may now also fall under the Competition Commission’s purview.
After the amendment, regulators no longer need to first distinguish whether an anti-competitive agreement is a horizontal agreement (between competitors) or a vertical agreement (such as between suppliers and distributors).
Henceforth, any agreement that severely obstructs, restricts, or distorts market competition may violate the law.
Additionally, the Competition Commission will be granted broader information-gathering powers, including requiring government departments and statutory bodies to provide relevant information.
The Commission may also issue warning letters after preliminary investigation and implement interim measures during investigation, requiring companies to suspend transactions or stop actions potentially harming competition.
This means regulators can intervene before anti-competitive behavior causes long-term harm to consumers or other businesses.
Early Settlement Leads to Reduced Penalties
The new law introduces a settlement mechanism—companies that admit wrongdoing may receive up to 40% reduction in fines.
This reduction can be combined with the existing Leniency Programme. Under the current regime, the first cartel participant to report illegal conduct may receive up to 100% penalty reduction.
However, cartel ringleaders or those who coerce others to participate will receive a smaller reduction.
Dr Ridoan believes this mechanism aligns with business realities and can help reduce companies' legal costs, management disruption and long-term reputational risks.
Since competition investigations are often protracted and costly, establishing a formal settlement mechanism can encourage swifter case resolution and greater cooperation from violators.
Furthermore, whistleblowers' identities will be given stronger protection, with potential monetary rewards, and confidentiality rules will be further tightened.
The High Court as a New Channel for Appeals
Post-amendment, companies dissatisfied with a Competition Appeal Tribunal decision may appeal to the High Court on questions of law or fine amounts.
Previously, Tribunal decisions were final.
Dr Ridoan believes such judicial oversight will help establish more stable and predictable case law, providing greater clarity on the interpretation and enforcement of competition laws.
He also stressed that tougher competition enforcement is not detrimental to business.
In fact, cartel conduct, bid rigging and abuse of market dominance put honest businesses at a disadvantage, allowing inefficient firms to profit through collusion or market sharing.
Therefore, a credible regulator helps foster a fairer, more innovative business environment and curbs escalating living costs for consumers.
Anti-competitive behavior directly affects prices of basic goods and services such as food, transport and services, so stronger enforcement is an important tool to ease cost-of-living pressures.
Merger Control Still Missing
Despite the broader enforcement powers, the new law does not establish a nationwide merger control regime. Dr Ridoan sees this as the biggest flaw of the reforms.
Currently, Malaysia has no unified requirement for companies to notify the Competition Commission before completing mergers that could substantially lessen market competition.
Only a few sectors, such as aviation and telecommunications, have independent merger regulatory systems.
This means that even acquisitions that could create or strengthen near-monopoly positions may be completed without competition review.
Dr Ridoan described: "Combatting cartels and abuse of dominance is like catching the thief after a burglary; merger control is like putting a lock on the door."
In fact, as early as April 2022, the Competition Commission publicly consulted on a comprehensive merger control plan, including: mandatory notification when thresholds are met, prohibition of mergers that substantially lessen competition, no transaction completion before clearance, a 120-day review period, and penalty of up to 10% of global turnover for violators.
Dr Ridoan stated that the 2026 reform is not a case of delay, but of "shelving a fully designed system".
At present, Singapore, Australia, Japan, the EU, the UK, as well as Indonesia, the Philippines, Thailand and Vietnam—all ASEAN peers—have implemented merger review systems.
In the absence of merger control, it is easier for businesses to eliminate competition by acquiring rivals than by conspiring with them—achieving the same effect of harming competition, but escaping scrutiny.
Digital Economy Regulation Remains Incomplete
The amendments also do not establish special regulatory regimes for digital platforms and large technology firms.
Dr Ridoan noted that traditional competition laws struggle to timely address "gatekeeper" platforms controlling consumer access, data and digital market entry.
The EU, UK and Germany have all introduced dedicated rules for digital markets to prevent large platforms harming small businesses, app developers and service providers.
While these amendments acknowledge that the business and technology environment has changed since 2010, new regulatory tools for the platform economy are still lacking.
Also, with the Competition Commission’s expanded powers, clear safeguards must be established to ensure proportionality and maintain independence.
Dr Ridoan recommends the Commission publish transparent penalty guidelines, compliance manuals and minimum impact thresholds to prevent SMEs from facing unnecessary risk due to legal uncertainty.
Businesses Should Prepare Early
Businesses should begin reviewing supply, distribution and service agreements, strengthen competition law training, and rethink how they communicate with competitors and industry associations.
Meanwhile, they should closely watch for enforcement guidelines the Competition Commission will issue under the new law.
Dr Ridoan believes this reform is important and overdue, making Malaysia’s market fairer and enforcement more credible.
However, he cautions that simply enhancing enforcement powers is not enough for a complete competition law regime.
He said: "Without merger control, Malaysia is guarding the front door while leaving the side door wide open; without regulatory tools for digital markets, we are still policing the 2010 economy, not the 2026 economy."
He believes that while these reforms are significant progress, whether the next round of legislation can address these gaps will determine whether Malaysia builds a robust competition regulation system before markets become excessively concentrated and irreversibly distorted.
These bills still require approval from the upper house and royal assent before taking effect. Once enacted, they will greatly strengthen the Malaysian Competition Commission’s (MyCC) enforcement powers and mean that companies will bear greater compliance responsibilities.
For businesses, this means that future commercial arrangements, industry practices, and relationships with competitors, suppliers and distributors will all be subject to stricter scrutiny.
Dr Ridoan Karim, Senior Lecturer in the Department of Business Law & Taxation at Monash University Malaysia, told BusinessToday: "The rules of fair competition are stricter, and the referee (regulator) also possesses greater enforcement powers."
Enlarged Enforcement Scope and Enhanced Regulatory Powers
Dr Ridoan pointed out that one of the most critical changes in this amendment is that the legal scope has expanded from "commercial activity" to "commercial or economic activity".
While this is a change in wording, the broader definition means industry associations, certain non-profit arrangements, and other activities with significant economic impact may now also fall under the Competition Commission’s purview.
After the amendment, regulators no longer need to first distinguish whether an anti-competitive agreement is a horizontal agreement (between competitors) or a vertical agreement (such as between suppliers and distributors).
Henceforth, any agreement that severely obstructs, restricts, or distorts market competition may violate the law.
Additionally, the Competition Commission will be granted broader information-gathering powers, including requiring government departments and statutory bodies to provide relevant information.
The Commission may also issue warning letters after preliminary investigation and implement interim measures during investigation, requiring companies to suspend transactions or stop actions potentially harming competition.
This means regulators can intervene before anti-competitive behavior causes long-term harm to consumers or other businesses.
Early Settlement Leads to Reduced Penalties
The new law introduces a settlement mechanism—companies that admit wrongdoing may receive up to 40% reduction in fines.
This reduction can be combined with the existing Leniency Programme. Under the current regime, the first cartel participant to report illegal conduct may receive up to 100% penalty reduction.
However, cartel ringleaders or those who coerce others to participate will receive a smaller reduction.
Dr Ridoan believes this mechanism aligns with business realities and can help reduce companies' legal costs, management disruption and long-term reputational risks.
Since competition investigations are often protracted and costly, establishing a formal settlement mechanism can encourage swifter case resolution and greater cooperation from violators.
Furthermore, whistleblowers' identities will be given stronger protection, with potential monetary rewards, and confidentiality rules will be further tightened.
The High Court as a New Channel for Appeals
Post-amendment, companies dissatisfied with a Competition Appeal Tribunal decision may appeal to the High Court on questions of law or fine amounts.
Previously, Tribunal decisions were final.
Dr Ridoan believes such judicial oversight will help establish more stable and predictable case law, providing greater clarity on the interpretation and enforcement of competition laws.
He also stressed that tougher competition enforcement is not detrimental to business.
In fact, cartel conduct, bid rigging and abuse of market dominance put honest businesses at a disadvantage, allowing inefficient firms to profit through collusion or market sharing.
Therefore, a credible regulator helps foster a fairer, more innovative business environment and curbs escalating living costs for consumers.
Anti-competitive behavior directly affects prices of basic goods and services such as food, transport and services, so stronger enforcement is an important tool to ease cost-of-living pressures.
Merger Control Still Missing
Despite the broader enforcement powers, the new law does not establish a nationwide merger control regime. Dr Ridoan sees this as the biggest flaw of the reforms.
Currently, Malaysia has no unified requirement for companies to notify the Competition Commission before completing mergers that could substantially lessen market competition.
Only a few sectors, such as aviation and telecommunications, have independent merger regulatory systems.
This means that even acquisitions that could create or strengthen near-monopoly positions may be completed without competition review.
Dr Ridoan described: "Combatting cartels and abuse of dominance is like catching the thief after a burglary; merger control is like putting a lock on the door."
In fact, as early as April 2022, the Competition Commission publicly consulted on a comprehensive merger control plan, including: mandatory notification when thresholds are met, prohibition of mergers that substantially lessen competition, no transaction completion before clearance, a 120-day review period, and penalty of up to 10% of global turnover for violators.
Dr Ridoan stated that the 2026 reform is not a case of delay, but of "shelving a fully designed system".
At present, Singapore, Australia, Japan, the EU, the UK, as well as Indonesia, the Philippines, Thailand and Vietnam—all ASEAN peers—have implemented merger review systems.
In the absence of merger control, it is easier for businesses to eliminate competition by acquiring rivals than by conspiring with them—achieving the same effect of harming competition, but escaping scrutiny.
Digital Economy Regulation Remains Incomplete
The amendments also do not establish special regulatory regimes for digital platforms and large technology firms.
Dr Ridoan noted that traditional competition laws struggle to timely address "gatekeeper" platforms controlling consumer access, data and digital market entry.
The EU, UK and Germany have all introduced dedicated rules for digital markets to prevent large platforms harming small businesses, app developers and service providers.
While these amendments acknowledge that the business and technology environment has changed since 2010, new regulatory tools for the platform economy are still lacking.
Also, with the Competition Commission’s expanded powers, clear safeguards must be established to ensure proportionality and maintain independence.
Dr Ridoan recommends the Commission publish transparent penalty guidelines, compliance manuals and minimum impact thresholds to prevent SMEs from facing unnecessary risk due to legal uncertainty.
Businesses Should Prepare Early
Businesses should begin reviewing supply, distribution and service agreements, strengthen competition law training, and rethink how they communicate with competitors and industry associations.
Meanwhile, they should closely watch for enforcement guidelines the Competition Commission will issue under the new law.
Dr Ridoan believes this reform is important and overdue, making Malaysia’s market fairer and enforcement more credible.
However, he cautions that simply enhancing enforcement powers is not enough for a complete competition law regime.
He said: "Without merger control, Malaysia is guarding the front door while leaving the side door wide open; without regulatory tools for digital markets, we are still policing the 2010 economy, not the 2026 economy."
He believes that while these reforms are significant progress, whether the next round of legislation can address these gaps will determine whether Malaysia builds a robust competition regulation system before markets become excessively concentrated and irreversibly distorted.