THE Malaysia Competition Commission (MyCC) was established to enforce the Competition Act 2010, to safeguard the process of free and fair competition for the benefit of consumers.

All commercial activities, with the exception of those in the telecommunications, energy, petroleum and aviation industries, are regulated under the Competition Act 2010.

Even though the MyCC does not have a mandate on mergers – a proposal apparently is being tabled to amend the competition laws to do so – and the aviation industries, it still investigated the short-lived collaboration between MAS and AirAsia in 2012, and its impact on consumer welfare.

After investigations, both airlines were fined RM10 million by the MyCC as their partnership broke competition laws.

Citing the Competition Act 2010, the MyCC concluded that the collaboration brought suffering to the economic interests of consumers.

The said fine was later annulled by the Federal Court after a series of appeals.

Was the MyCC’s silence on the merger between Celcom and Digi influenced by its battle with MAS and AirAsia?

According to the lawyer representing AirAsia in the appeal, both airlines had previously approached the MyCC to ensure they had complied with competition law.

Meanwhile, the Malaysian Communications and Multimedia Commission (MCMC) announced recently that, after conducting a thorough assessment on the merger, it gave the go ahead for the proposed merger between Digi Bhd (Digi) and Celcom Axiata Bhd (Celcom).

The MCMC, in its announcement, stated that it was satisfied with the commitment offered by the applicants with both telcos submitted an undertaking to address competition issues highlighted by the commission to reduce competition issues that may arise as a result of the merger.

With the merger, there would only be two competing corporations in the telecommunications sector: the merged company that will have a combined market share of approximately 67% and Maxis.

This clearly indicates a high level of concentration in the telecommunications sector.

With reducing competition, would this result in higher prices and lower quality, thus hurting consumers?

In the communications market, dominance is likely to be established if the merged entity has a market share of 40% or more.

The threshold for dominance in the communications market, which is 60% or more due to its highly concentrated nature, is significantly lower than that adopted by the MyCC in general.

Already on March 29, 2022, Communications and Multimedia Minister Annuar Musa was quoted to have said that he is not impressed with the record profits enjoyed by the telcos when they are still unable to provided satisfactory services to the people, specifically those in the rural areas.

On June 14, 2022, again the minister was quoted to have said that he has ordered MCMC to test if the internet speed as good as telcos claim.

A nationwide technical audit apparently was conducted in 3,038 locations – picked based on complaints received by the MCMC from Malaysians – across Malaysia’s 13 states and three federal territories.

Apparently, subsequent to the audit, Celcom, U Mobile, and Digi were issued a commission directive to improve the quality of their service and user experience in accordance with the MCMC’s mandatory standards for quality of service.

Failure to follow through with the directive could result in the telcos fined up to RM200,000 in accordance with section 109 of the Communications and Multimedia Act.

In the space of this past three months that interspersed with MCMC issuing a statement of issues (SOI) to both Celcom and Digi in April 2022.

From the response from both telcos in May 2022 that includes the submission of an undertaking, it is clear that the services of telcos in Malaysia.

In fact, the telcos have, over the years, faced heavy criticism from the public for their high rates, and nothing appears to have been done to reduce the rates or improve efficiency.

Prior to the go ahead, the MCMC has repeatedly tried to reassure the concerned public that the existing regulatory framework has the right tools to prevent monopolies and to ensure that consumer rights are protected.

When the MCMC can’t even direct the telcos to review their exorbitant fees – a complaint raised many times by the public – they charge for termination of the services, can the consumers depend on MCMC to protect their interests despite having the right tools?

Can the public depend on MyCC?

Would the MyCC, viewed by many in the public failed in its role as a governing body – take a more proactive approach to the merger to ensure that the interests of all consumers are protected?

While the MyCC does not have the authority to unwind the transaction under the Competition Act 2010, it can investigate the behavioural conduct of parties post-merger entity of Celcom and Digi in the same fashion as their investigation into Grab?

The latter acquired Uber’s southeast Asia business, which resulted in it being issued with a proposed infringement decision, under which it was alleged that Grab had abused its dominant position in the e-hailing market.

The public is waiting for a response from the MyCC, provided it is at home. – July 1, 2022.

* FLK reads The Malaysian Insight.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.