Consider This: MyCC - In Pursuit of Fair Market Play

Summary

In this episode of 'Consider This,' Melissa Idris interviews Isanda Ismel, CEO of the Malaysian Competition Commission (MyCC). The discussion delves into MyCC’s role in promoting fair market practices, focusing on its efforts to tackle cartels, like the chicken feed price-fixing case, and ensuring competitive pricing and choices for consumers. Ismel highlights the challenges of policing anti-competitive behavior in Malaysia's oligopolistic sectors and the need for a merger control regime. MyCC's priorities for 2024 include strengthening laws and addressing the growing influence of digital economies while increasing resources to tackle market manipulation.

Takeaways

• 😀 MyCC (Malaysia Competition Commission) plays a crucial role in ensuring fair competition in Malaysia's markets, benefiting consumers through competitive pricing, quality, and choice.
• 😀 MyCC's main task is to protect the process of competition by enforcing the Competition Act 2010, which helps businesses grow through innovation, efficiency, and improved customer service.
• 😀 In 2021, MyCC investigated a chicken feed cartel that led to price-fixing among five feed millers, causing increased retail chicken prices. The cartel's collusion was exposed through intelligence and surveillance.
• 😀 Cartels are considered the 'supreme evil' of competition law because they restrict market competition and harm consumers by inflating prices and limiting choice.
• 😀 MyCC's investigation uncovered that feed millers used the Malaysian Feed Millers Association to discuss sensitive market information and coordinate price increases through platforms like WhatsApp and phone calls.
• 😀 In Malaysia, the economy is oligopolistic in certain sectors, which makes it challenging to detect anti-competitive practices among a few dominant players. However, MyCC uses a combination of market surveillance and legal powers to investigate.
• 😀 The Competition Act 2010 currently lacks a merger control regime, making it difficult to prevent market dominance before it occurs. MyCC is working to amend the law to include merger controls.
• 😀 MyCC faces significant challenges due to limited resources but is increasing its capacity by recruiting more staff and receiving additional funding from the government to handle the growing volume of cases.
• 😀 For 2024, MyCC's priorities include amending the competition law, continuing to fight cartels (especially in the food and agriculture sectors), and expanding its investigations into the digital economy and online sectors.
• 😀 MyCC is urging consumers to stay informed about market practices and report anti-competitive behavior to help ensure that the market remains fair and transparent for all.

Q & A

What is the primary role of MyCC in the Malaysian economy?

MyCC's primary role is to ensure fair market practices by enforcing competition laws. It aims to protect the process of competition, encouraging businesses to compete, innovate, and offer consumers better prices, more choices, and higher quality products and services.

How does MyCC support consumers in an oligopolistic market?

MyCC works to ensure that businesses in oligopolistic sectors, where a few big players dominate, still compete fairly. It investigates anti-competitive behavior such as price-fixing and market collusion, which ultimately protects consumers by ensuring fair pricing, choice, and quality.

What was the focus of MyCC's investigation in the chicken feed cartel case?

MyCC investigated a cartel of five poultry feed producers that were colluding to fix the prices of chicken feed. The cartel's activities included sharing sensitive pricing information and coordinating price increases, which led to higher costs for consumers and producers in the chicken supply chain.

How did MyCC uncover the price-fixing activity among poultry feed producers?

MyCC used surveillance, intelligence gathering, and witness statements to uncover the price-fixing activity. They also carried out raids, as the competition law in Malaysia empowers MyCC to conduct such investigations and gather evidence of anti-competitive behavior.

What challenges does MyCC face when investigating anti-competitive behavior in oligopolistic markets?

In oligopolistic markets, where a few large players dominate, it is difficult to distinguish between legitimate competitive behavior and potential collusion. MyCC faces challenges in detecting anti-competitive practices due to limited players and complex market dynamics, but it uses tools like surveillance and market analysis to address these issues.

What are the key elements of Malaysia's competition law that MyCC enforces?

Malaysia's competition law consists of three main pillars: prohibition against cartels, prohibition against the abuse of dominant market positions, and the investigation of mergers. MyCC enforces these laws to prevent market manipulation and ensure that businesses operate in a competitive and fair environment.

Why is the merger control regime considered an important missing piece in Malaysia's competition law?

A merger control regime would allow MyCC to prevent potentially anti-competitive mergers before they happen, stopping companies from gaining excessive market power. Without it, the market may be left vulnerable to the creation of monopolies or super-dominant players, which could harm consumers.

What steps is MyCC taking to address the lack of a merger control regime in Malaysia?

MyCC is working on amending the competition law to introduce a merger control regime. The amendments are in progress and are expected to be tabled in parliament by mid-2024, allowing MyCC to regulate and scrutinize mergers more effectively.

How does MyCC ensure that its investigations and decisions are fair and thorough?

MyCC is both the investigator and the decision-maker in its cases, which allows it to handle everything under one roof. However, this also means that investigations take time, as MyCC must follow a thorough process to ensure fairness and accuracy in its decisions. This includes collecting evidence, conducting hearings, and making a final ruling.

What challenges does MyCC face in terms of resources and workload?

MyCC faces challenges with limited resources, especially as its scope of work increases with more investigations and a growing number of cases. The government has allocated additional funding to recruit more staff and investigators, but managing a high volume of cases remains a significant challenge.