Effective cartel enforcement : getting Malaysia ready for what lies ahead

• Main Author: Yasim, Yasmeen
• Published: University of East Anglia 2013
• Subjects: 340
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.590757

Cartel enforcement is challenging, particularly for developing countries with young competition enforcement regimes as cartels are illicit in nature and competition authorities are faced with connected firms that sometimes enjoy close links with policy makers. So, why should developing countries be concerned with effective cartel enforcement? This thesis answers the question by explaining it from international perspective – international cartel enforcement via regional trade agreements between developed and developing countries. This work argues that in order to encourage the utilisation of competition related provisions in regional TAs there are prerequisites to be satisfied. One of the prerequisites is there has to be incentives for the regional TA signatories to cooperate in international cartel enforcement by invoking the competition related provisions under regional trade agreements. Incentives arise out of the existence of credible competition enforcement regimes and the strength of trade relationship between the regional trade agreement partners. Without domestic competition law in place, there is no legal basis for cooperation. Even if there is a competition law in place, the absence of a credible competition enforcement regime would not incentivise a developed country with an advanced competition jurisdiction to invoke competition related provisions in a regional trade agreement to address cross border competition infringements. Therefore, it is important for trade reliant developing countries to have a credible competition enforcement regime in place, lest international cartels continue to thrive and adversely impact the domestic market of developing countries and international trade. This includes ensuring that effective cartel enforcement exists in their jurisdiction. In this regard, this work focuses on Malaysia to illustrate how it can be done. Malaysia, a middle income developing country which had fairly recently adopted a competition law with the enactment of the Competition Act 2010. Although the law is already in place, Malaysia is yet to formulate a coherent and formal cartel enforcement policy for the country. The policy is important for effective cartel enforcement because it complements the law and provides clarity and transparency in regard to legislative implementation. In determining an appropriate cartel enforcement policy for Malaysia, the discussion encompasses the following aspects: an appropriate cartel enforcement policy for Malaysia; exemptions of horizontal agreements; limitations of the Competition Act 2010 in light of tougher cartel enforcement. These are the pivotal aspects in cartel enforcement which ought to be focused on to facilitate Malaysia in formulating its cartel enforcement policy. At the end of the discussion, this work suggests the form and contents of Malaysia’s cartel enforcement policy which account for Malaysia’s limitations as a middle income developing country with a young competition jurisdiction. The work also finds that there is insufficient empirical evidence available on market concentration in Malaysia and therefore recommends the necessary studies which ought to be undertaken in order to facilitate the competition authorities to formulate an accurate competition enforcement policy.