MyCC and AI Competition Law in Malaysia

The Malaysia Competition Commission (MyCC) is the statutory body established under the Competition Act 2010 (Act 712) to prohibit anti-competitive conduct and promote fair competition in Malaysian markets. As artificial intelligence reshapes digital platforms, pricing algorithms, and market power dynamics, MyCC has become an increasingly important regulator in Malaysia's AI governance landscape — complementing sectoral regulators such as Bank Negara Malaysia (BNM), the Securities Commission (SC), and the Malaysian Communications and Multimedia Commission (MCMC).

The Competition Act 2010

The Competition Act 2010 prohibits two broad categories of conduct. Chapter 1 prohibits anti-competitive agreements between enterprises — including horizontal price-fixing, market allocation, bid rigging, and vertical agreements that foreclose competition. Chapter 2 prohibits abuse of dominant position, targeting enterprises with substantial market power that engage in exclusionary or exploitative conduct. MyCC has the power to investigate, impose financial penalties of up to 10 percent of worldwide turnover, and recommend remedies including divestiture.

The Act does not establish a pre-merger notification regime — Malaysia lacks a formal merger control regime as of mid-2026 — which has drawn criticism given the wave of digital sector consolidation.

Digital Economy Market Review (2024-2025)

In July 2024, MyCC initiated a formal Market Review under Section 11 of the Competition Act 2010, focused on the digital economy ecosystem. The review was motivated by the accelerating growth of digital markets, driven in part by AI, machine learning, and shared-economy platforms, and their impact on consumer welfare and costs of living.

The interim report, published in March 2025, identified three priority sub-sectors: mobile operating systems and integrated payment systems; e-commerce business-to-consumer marketplace platforms; and online travel agencies. The review noted that existing laws struggle to keep pace with the rapid evolution of digital markets, citing regulatory gaps as a structural concern.

The draft Final Report was scheduled for completion in Q3 2025, with stakeholder consultation preceding a non-confidential final publication. MyCC's proposed recommendations were expected to address platform transparency, interoperability, and data access obligations.

AI-Specific Competition Concerns

Artificial intelligence introduces several novel competition law concerns that MyCC's market review has begun to address.

Algorithmic pricing — the use of AI systems to set prices dynamically in response to competitor and demand signals — raises the risk of tacit collusion, where competing firms' pricing algorithms independently converge on supra-competitive prices without any explicit agreement. Competition authorities globally have struggled to apply traditional conspiracy frameworks to algorithmic collusion.

Data as a barrier to entry is a central concern in AI-driven markets. Incumbents with access to large proprietary datasets can train superior AI models, creating a self-reinforcing advantage that new entrants cannot easily replicate. MyCC's interim report highlighted data concentration as a structural risk in Malaysian digital markets.

Platform self-preferencing — where a platform operator uses AI-driven recommendation or search systems to favour its own products over competitors — is a significant antitrust concern. Globally, regulators have targeted Google's search self-preferencing and Apple's App Store policies. MyCC's review of mobile operating systems and integrated payment systems reflects similar concerns in the Malaysian context.

Generative AI and content markets raise questions about whether AI systems that generate content are substituting for, or competing with, human content creators and media businesses, and whether the aggregation of training data constitutes an anti-competitive foreclosure of data access.

International Context

MyCC's approach draws on parallel regulatory developments in the European Union (Digital Markets Act, 2022), the United Kingdom (Digital Markets, Competition and Consumers Act, 2024), and Singapore (Competition and Consumer Commission of Singapore's review of digital platform markets). The ASEAN Competition Expert Group (ACEG) facilitates information sharing among competition authorities in the region, including on AI and digital market issues.

The International Technology and Innovation Foundation (ITIF) submitted comments to MyCC's consultation in April 2025, urging the Commission to avoid regulatory fragmentation and ensure that competition remedies do not inadvertently disadvantage Malaysian digital businesses competing with global platforms.

MyCC's digital economy review is particularly significant for Malaysia's large and growing e-commerce sector. Lazada Malaysia, Shopee Malaysia, and TikTok Shop dominate the B2C marketplace segment, and their use of AI-driven recommendation engines, dynamic pricing, and logistics advantages raises questions about fair competition for local merchants and smaller platforms.

The integration of e-commerce with digital financial services — ShopeePay, GrabPay, and Lazada's digital wallet offerings — creates vertically integrated ecosystems that MyCC, BNM, and SC must regulate jointly. MyCC's review of integrated payment systems within mobile operating systems directly implicates Apple Pay, Google Pay, and Huawei Pay, which are used by millions of Malaysian consumers.

For Malaysian SMEs and entrepreneurs, competition law enforcement matters because concentrated platform power translates into high commission rates, data asymmetries, and algorithmic ranking opacity. The Domestic Trade and Cost of Living Ministry (KPDN), which oversees consumer protection alongside MyCC, has received complaints from local traders about algorithmic pricing practices on major platforms.

Malaysia's lack of a formal merger control regime means that major acquisitions in the digital and AI sector proceed without mandatory competition scrutiny. Legal practitioners and policy analysts have called for merger notification provisions to be added to the Competition Act, particularly given the pace of consolidation in the AI and cloud services sector.

The Federation of Malaysian Manufacturers (FMM) and the SME Association of Malaysia have engaged with MyCC's consultation, advocating for clearer rules around data access and platform interoperability that would allow smaller Malaysian businesses to compete on AI-enabled digital marketplaces without being foreclosed by incumbent data advantages.

See Also

References

1. Malaysia Competition Commission. (2025). Interim report: Market review on the digital economy ecosystem. MyCC.
2. Competition Act 2010, Act 712. Parliament of Malaysia.
3. ITIF. (2025). Comments before the Malaysia Competition Commission regarding assessment of Malaysia's digital markets. itif.org.
4. Rahmat Lim and Partners. (2025). MyCC issues interim report on market review of digital economy ecosystem. rahmatlim.com.
5. OECD. (2023). Algorithmic competition: Issues and policy options. OECD Digital Economy Papers.