Anti-Competitive Agreement Lawyer Malaysia | Chapter 1 Competition Act

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Anti-Competitive Agreements in Malaysia — Chapter 1 of the Competition Act 2010

If your business is under investigation by MyCC for an alleged anti-competitive agreement — or if you have been named in a MyCC proposed decision relating to a cartel, price-fixing arrangement, bid-rigging conspiracy, or market-sharing agreement — you are facing one of the most serious competition law situations your business can encounter. The penalties are severe, the process is demanding, and the decisions made in the early stages of the investigation will significantly affect the outcome.

At NZSK, our competition lawyers in Kuala Lumpur and Selangor advise businesses under investigation for suspected Chapter 1 infringements, assist in preparing written and oral representations to MyCC, and represent parties before the Competition Appeal Tribunal (CAT) and the courts. We act from offices in Mont Kiara, KL and Puchong, Selangor, and we bring both litigation rigour and competition law expertise to every matter.

Why Choose Us?

The Chapter 1 Prohibition — What Is Prohibited

Section 4 of the Competition Act 2010 prohibits any horizontal or vertical agreement between enterprises that has the object or effect of significantly preventing, restricting, or distorting competition in any market in Malaysia. An ‘agreement’ in this context is interpreted broadly — it includes formal written contracts, informal gentlemen’s agreements, understandings, concerted practices, and decisions by associations of enterprises.

The Competition Act provides that the following categories of agreement are deemed to have the object of significantly preventing, restricting, or distorting competition — and are therefore treated as per se illegal, without any need for MyCC to demonstrate actual anti-competitive effects:

Price fixing — agreements between competitors to fix, directly or indirectly, the purchase or selling price or any other trading conditions — the most commonly prosecuted category of Chapter 1 infringement in Malaysia
Bid rigging — agreements between competitors to rig bids submitted in a tendering process — including cover bidding (submitting artificially high bids), bid suppression (agreeing not to bid), and bid rotation (taking turns winning tenders). MyCC has issued multiple infringement decisions against bid-rigging cartels in Malaysia’s construction and services sectors
Market sharing — agreements between competitors to divide markets — by customers, territories, products, or any other criteria — so that they do not compete against each other in designated areas
Production or supply limitations — agreements between competitors to restrict or control the levels of production, supply, markets, technical development, or investment

Non-Per-Se Infringements — Object or Effect Test

Beyond the per se categories, the Chapter 1 Prohibition also captures agreements that, while not automatically illegal, have the object or effect of significantly preventing, restricting, or distorting competition. These are assessed under a fuller analysis — examining the market context, the purpose of the agreement, and its actual or likely effects on competition.

Common examples of non-per-se horizontal agreements that may raise Chapter 1 concerns include: information-sharing agreements between competitors involving commercially sensitive data (pricing, capacity, customer information); joint purchasing arrangements; joint selling arrangements; and collective boycotts. Vertical agreements — between parties at different levels of the supply chain — are assessed under the same test but with a safe harbour: vertical agreements between parties each holding less than 25 per cent market share individually in any relevant market are generally not considered to significantly restrict competition.

Safe Harbours Under Malaysian Competition Law

The Competition Act provides safe harbours that limit the application of the Chapter 1 Prohibition to commercially significant conduct. MyCC’s Guidelines on Chapter 1 Prohibition indicate that an agreement will generally not be considered to significantly affect competition if:

For horizontal agreements — the combined market share of the parties in the relevant market does not exceed 20 per cent
For vertical agreements — each party individually holds less than 25 per cent share in any relevant market

It is critical to note that price fixing — even among parties with small market shares — is not covered by these safe harbours. The per se categories are illegal regardless of market share. The safe harbours apply only to agreements assessed under the object or effect test.

Industry Association Activities — A High-Risk Area

Many of the Chapter 1 infringement decisions issued by MyCC in Malaysia have arisen in the context of industry association activities — including trade association meetings where pricing, business terms, or market information were discussed. Participation in an industry association does not provide immunity from competition law liability: the Chapter 1 Prohibition applies to decisions by associations of enterprises, as well as to direct agreements between individual businesses.

If your industry association has ever discussed pricing, standardised commercial terms, divided market territories, coordinated bidding strategies, or exchanged commercially sensitive competitor data — even informally — those activities may constitute an infringement of the Chapter 1 Prohibition. We advise industry associations and their members on competition-compliant conduct and on the specific activities that carry the highest risk.

Leniency — The MyCC Leniency Programme

MyCC operates a leniency programme that allows enterprises that have participated in a cartel to apply for full or partial immunity from financial penalties in exchange for cooperation with MyCC’s investigation. The leniency programme is available only to the first applicant to come forward — subsequent applicants may receive reduced penalties but not full immunity. Critically, the leniency programme is only available before a MyCC investigation has progressed to a certain stage.

If your business has participated in conduct that may constitute a Chapter 1 infringement and is considering leniency, contact us immediately. Leniency strategy requires extremely careful and confidential legal advice — the decision to apply, the timing of the application, and the scope of cooperation can have significant consequences both for the enterprise and for the individuals involved.

Frequently Asked Questions

What is price fixing under Malaysian competition law?

Price fixing under section 4(2)(a) of the Competition Act 2010 refers to any agreement between competitors — horizontal agreement — that directly or indirectly fixes, sets, maintains, or coordinates the purchase or selling price or any other trading conditions. It is a per se infringement: MyCC does not need to show that the agreement had any actual effect on prices or competition. Even an informal understanding between competitors about pricing constitutes price fixing. MyCC has imposed significant penalties on businesses across multiple sectors for price-fixing conduct.

What is bid rigging and how does MyCC detect it?

Bid rigging is an agreement between competitors to manipulate the outcome of a tendering or procurement process — for example by agreeing in advance who will win a tender, submitting artificially high 'cover bids' to make a predetermined winner appear competitive, or agreeing not to bid on certain contracts. MyCC detects bid rigging through complaints from procuring entities, statistical analysis of tender data (looking for patterns inconsistent with genuine competition), and whistleblowers. MyCC has issued multiple infringement decisions against bid-rigging cartels in Malaysia's construction, logistics, and government procurement sectors.

We had a meeting with our competitors at an industry association event. Could this be a problem?

Potentially yes — depending on what was discussed. Meetings between competitors at industry association events are a common source of competition law risk. If any discussion touched on pricing, business terms, market allocation, customer information, or future business strategies, those discussions may constitute an anti-competitive agreement or concerted practice under the Chapter 1 Prohibition — even if nothing was formally agreed and even if the meeting was facilitated by the association. Contact us to assess the risk profile of any specific meeting or activity.

What should I do if I discover that my company has been involved in a cartel?

Act immediately and seek legal advice in strict confidence before taking any other steps. Do not destroy or alter any documents relating to the conduct. Your key decisions — whether to apply for leniency, whether to cooperate with MyCC, and how to manage the matter internally — require careful legal analysis before any action is taken. The timing and manner of your response will significantly affect the penalty outcome. Contact us immediately.

Can employees of a company be personally liable for competition law infringements in Malaysia?

Under the Competition Act 2010, financial penalties are imposed on enterprises — not on individual employees or directors. However, there are criminal offences under the Competition Commission Act 2010 relating to obstruction of MyCC investigations, providing false information to MyCC, and failure to comply with MyCC directions — which do carry personal criminal liability. In addition, where a company director was personally involved in directing or approving anti-competitive conduct, there may be corporate governance and personal liability implications beyond the Competition Act.

Speak to a Competition Lawyer Now!

If your business is involved in any conduct that may constitute an anti-competitive agreement — or if you have received a communication from MyCC, contact NZSK for practical and commercially focused trade mark legal advice. Contact us to arrange a consultation.