The Competition (Amendment) Bill 2026 (“Bill”), which seeks to amend the Competition Act 2010 (“CA”), has been passed by the Dewan Rakyat on 6 July 2026 and subsequently by the Dewan Negara on 27 July 2026. The amendments represent an important development in Malaysia’s competition law framework, particularly by broadening the scope of the CA, extending the treatment of certain anti-competitive arrangements, strengthening the Malaysian Competition Commission’s (“MyCC”) information-gathering powers and introducing a new settlement mechanism. We highlight below four key amendments that businesses should take note of.
1. Scope and applicability of the Competition Act 2010 (Section 3):
Based on the current Section 3 of the CA, CA applies to “any commercial activity”. The Bill expands this by replacing the term “commercial activity” with “commercial or economic activity”. While the word “economic” is not defined, it may cover activities of state-owned enterprises, statutory bodies, and non-profit organizations with an economic impact.
The CA also expressly provides that the CA shall have effect both within and outside Malaysia and in relation to the application of CA outside Malaysia, the CA applies to any commercial or economic activity transacted outside Malaysia which has an effect on competition in any market in Malaysia. The amendment therefore broadens the scope of activities potentially subject to the CA and makes its extraterritorial application clearer.
Implication for Businesses: Businesses should not assume that an arrangement falls outside the CA merely because the agreement was entered into, or the relevant conduct occurred, outside Malaysia. Multinational groups and businesses involved in cross-border arrangements should consider whether their overseas agreements or conduct may have an effect on competition in a Malaysian market, this includes regional distribution arrangements, supply arrangements, joint ventures or other commercial arrangements that may affect the supply, pricing or availability of goods or services in Malaysia.
2. Removal of Distinction between Horizontal and Vertical Agreements (Section 2 and Section 4):
The Bill removes the definitions of “horizontal agreement” and “vertical agreement” from Section 2 of the CA. More significantly, the distinction between the two types of agreements is also removed from Section 4, which governs anti-competitive agreements. Under the amended Section 4(1), any agreement between enterprises is prohibited insofar as the agreement has the object or effect of significantly preventing, restricting or distorting competition in any market for goods or services. The significance of this amendment is particularly apparent in Section 4(2). Previously, the statutory deeming provision was directed at horizontal agreements. Under the Bill, any agreement between enterprises which has the object to:
(a) fix, directly or indirectly, a purchase or selling price or any other trading conditions;
(b) share market or sources of supply;
(c) limit or control-
(i) production;
(ii) market outlets or market access;
(iii) technical or technological development; or
(iv) investment; or
(d) perform an act of bid rigging,
is deemed to have the object of significantly preventing, restricting, or distorting competition in any market for goods or services.
This means that the deeming provision is no longer confined to horizontal agreements between competitors and may potentially apply to vertical arrangements, including arrangements between suppliers and distributors or retailers.
Implication for Businesses: This is a significant change for businesses operating through dealers, distributors, resellers or other vertical supply arrangements. In particular, contractual provisions or practices relating to resale prices, trading conditions, territorial or customer restrictions, market access, supply restrictions and other controls imposed on downstream businesses may warrant closer scrutiny under the amended Section 4. Internal competition compliance policies and training materials should be updated accordingly.
3. Strengthened Information-Gathering Powers (Section 18):
The Bill strengthens MyCC’s information-gathering powers under Section 18. Where MyCC has reasonable grounds to believe that any person has information, particulars or documents relevant to the performance of its functions and powers, MyCC may direct that person to provide the relevant information or particulars, produce documents or provide oral evidence. The Bill also allows MyCC, by written notice, to request a Government Entity to provide information, particulars or documents where MyCC has reasonable grounds to believe that such material is relevant to the performance of its functions and powers.
Implication for Businesses: Businesses should be prepared for broader information requests in the course of MyCC’s investigations and other exercises of its statutory functions. Employees who are likely to receive or handle regulatory requests should know how such requests are to be escalated internally. Businesses should also exercise care in creating internal records, including emails, messaging-platform communications, meeting minutes and presentations, as these documents may become relevant in a competition investigation.
4. New Offer of Settlement Mechanism (Section 38A):
The Bill introduces a new settlement mechanism under Section 38A. Following the issuance of a written notice of a proposed decision, MyCC may, subject to such conditions as it may impose, offer a settlement to an enterprise under investigation for an infringement of:
- Section 4, relating to anti-competitive agreements; or
- Section 10, relating to abuse of a dominant position.
An enterprise accepting the settlement offer must admit liability for the infringement. Following acceptance, MyCC will make a decision on the infringement and may impose a financial penalty with a reduction of up to 40%. Importantly, this reduction is in addition to any reduction in financial penalty that the enterprise may be entitled to under the leniency regime under Section 41.
Implications for Businesses: The new mechanism gives businesses facing a MyCC investigation an additional avenue to manage regulatory exposure and potentially reduce the financial consequences of an infringement. However, accepting a settlement is a significant decision because it requires the enterprise to admit liability. Businesses will therefore need to carefully weigh the potential reduction in financial penalty against the reputational and commercial consequences of such an admission.
Conclusion
Overall, the amendments signal a broader and more enforcement-focused competition regime in Malaysia. Businesses should take the opportunity to review their commercial practices and internal compliance procedures before the amendments come into operation. Despite earlier public consultations, the amendments do not introduce a mandatory merger notification or merger control regime. Accordingly, mergers and acquisitions generally remain outside the scope of the Competition Act 2010, although parties should continue to assess competition risks arising from their commercial conduct following completion.
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This article was written by Low Rui Thong (Associate) from Donovan & Ho’s corporate practice.
Our corporate practice group advises on corporate acquisitions, restructuring exercises, joint venture arrangements, shareholder agreements, employee share options and franchise businesses, Malaysia start-up founders and can assist with venture capital funds in Seed, Series A & B funding rounds. Feel free to contact us if you have any queries.
