Editor's Note
This note summarizes the key elements of Malaysia's approach to competition analysis. This summary is based on the Malaysian Communications and Multimedia Commission's Guideline on Substantial Lessening of Competition (RG/SLC/1/00(1))
The Malaysian Communications and Multimedia Commission uses a three-step process to determine whether conduct has the purpose or effect of substantially lessening competition (see Figure 1).
Figure 1
Step 1: Define the Context
Before commencing a full competition investigation, the Commission undertakes an initial assessment of the probable impact of the conduct (or proposed conduct) on the level of competition.
The objective of this assessment is to ensure that the Commission has appropriate powers to act, before proceeding to a full investigation. During this step, the Commission:
Determines which section of the Communications and Multimedia Act applies
Considers whether Commission intervention is required, and the likelihood that the benefits of intervention will outweigh the costs, and
Identifies key stakeholders.
Step 2: Define the Market
The second step is to define the boundaries of the relevant market. The Commission will treat two products or services as being in the same market if, and only if, they are substitutable for a given purpose. It:
Identifies all demand substitutes for the product or service. How easily can customers substitute the product or service in question a similar product or service?
Identifies all supply substitutes for the service. How easily can firms (who are not already doing so) start supplying the good or service?
In defining markets, the Commission looks at three dimensions:
The product dimension, which focuses on the bundle of goods or services supplied by the firm and by actual or potential sources of alternative supply
The geographic dimension, which focuses on the area or areas over which a firm and its rivals are able to compete, and which customers can practically access given a sufficient price incentive
The time dimension, which focuses on the period over which substitution possibilities should be considered. The Commission generally considers substitution possibilities over the long term, but foreseeable, future.
Step 3: Assess the Conduct
After defining the market, the Commission will assess the conduct to determine whether there is (or may be) a substantial lessening of competition in the relevant market. This assessment focuses on the level of competitive rivalry in the market, with and without Commission intervention (see Figure 2).
Figure 2: Process for Assessing Conduct
