Industry / Competition / FAQs

Competition FAQs

General

1. What is the applicable competition law governing aviation services, i.e. Competition Act 2010 or Malaysian Aviation Commission Act 2015?

From 1 March 2016 onwards, aviation services in Malaysia are governed by competition law as provided for in the Malaysian Aviation Commission Act 2015, particularly Part VII (Competition) of the Act. Correspondingly, the Malaysian Aviation Commission Act 2015 has been excluded from the application of the Competition Act 2010 through its insertion into Schedule 1 of the Competition Act 2010, effective from 1 March 2016.

2. What are the aviation services governed by the Malaysian Aviation Commission Act 2015?

The definition of “aviation services” as per Section 2 of the Malaysian Aviation Commission Act 2015 is “any of the following services:

  • (a) the carriage of passengers, mail or cargo for hire or reward by air or by the use of any aircraft between two or more places, of which at least one place is in Malaysia;
  • (b) the provision in Malaysia of any of the ground handling services as specified in the Second Schedule;
  • (c) the operation of an aerodrome in Malaysia for the take-off and landing of any aircraft engaged in the carriage of passengers, mail or cargo for hire or reward; or
  • (d) any other service determined by MAVCOM to be necessary or expedient for the carriage of passengers, mail or cargo referred to in paragraph (a),whether or not such service is provided by a licensee, permit holder or otherwise.”

3. Does Part VII (Competition) of the Malaysian Aviation Commission Act 2015 only apply to activities or transactions affecting aviation services within Malaysia?

Part VII (Competition) of the Malaysian Aviation Commission Act 2015 applies to:

  • any commercial activity, agreement or merger affecting aviation services within Malaysia; and
  • any commercial activity, agreement or merger transacted or executed outside Malaysia which has an effect on competition in any aviation service market in Malaysia.

4. What commercial activities, agreements and mergers are excluded from Part VII (Competition) of the Malaysian Aviation Commission Act 2015?

The exclusions to Part VII (Competition) of the Malaysian Aviation Commission Act 2015 are listed in the Third Schedule of the Act.

5. Are there guidelines issued by MAVCOM relating to Part VII (Competition) of the Malaysian Aviation Commission Act 2015?

MAVCOM has issued and published the following Guidelines:

MAVCOM is currently developing other guidelines to clarify and illustrate the application of Part VII (Competition) of the Malaysian Aviation Commission Act 2015. The draft guidelines will be published by MAVCOM on its website and open for public consultation for a period specified by MAVCOM.

6. Will any non-compliance of any competition guidelines be subject to financial penalty under subsection 65(4) of the Malaysian Aviation Commission Act 2015?

Subsection 65(4) of the Malaysian Aviation Commission Act 2015 [Act 771] was inserted by virtue of the Malaysian Aviation Commission (Amendment) Act 2018 [Act A1559] which came into force on 9 February 2018. Subsection 65(4) provides MAVCOM with the power to impose a financial penalty for any non-compliance of any guidelines issued under section 65 of the Act. Where MAVCOM intends to enforce any guidelines by way of a financial penalty under subsection 65(4) of the Act, MAVCOM will explicitly provide so in the relevant guidelines.

At present, MAVCOM has issued and published three guidelines regarding aviation service market definition, anti-competitive agreements and abuse of dominant position. These guidelines serve to supplement Part VII (Competition) of the Malaysian Aviation Commission Act 2015. These guidelines do not provide any financial penalty for any non-compliance of the guidelines. However, failure to comply with these guidelines may affect the outcome of an enterprise’s application to MAVCOM for an individual exemption or a block exemption. Enterprises are also advised to refer to these guidelines in conducting their self-assessment and compliance exercises.

7. Does MAVCOM impose any fee for applications made under Part VII (Competition) of the Malaysian Aviation Commission Act 2015?

At present, MAVCOM does not impose any fee for any application under Part VII (Competition) of the Malaysian Aviation Commission Act 2015. The fees applicable will be prescribed by way of regulations in the future.

8. Who can make a complaint regarding any suspected anti-competitive act in the aviation services that infringes Part VII of the Malaysian Aviation Commission Act 2015?  

Any individual or enterprise may make a complaint to MAVCOM regarding any suspected infringement of Part VII of the Malaysian Aviation Commission Act 2015 in the aviation services. Since the Act came into operation on 1 March 2016, MAVCOM would only consider complaints about suspected infringements that occur or continue to exist on or after 1 March 2016.

9. How do I make an application or a complaint under Part VII (Competition) of the Malaysian Aviation Commission Act 2015 to MAVCOM?

To enquire further on the applicable application / complaint procedures, please email any application or complaint Part VII (Competition) of the Malaysian Aviation Commission Act 2015 to competition@mavcom.my 

10. How do I contact MAVCOM to enquire on any matter relating to Part VII (Competition) of the Malaysian Aviation Commission Act 2015?

Please email your enquiry on any matter relating to Part VII (Competition) of the Malaysian Aviation Commission Act 2015 to competition@mavcom.my

Mergers

11. Is the notification of anticipated merger or merger mandatory?

The Malaysian Aviation Commission Act 2015 has a voluntary notification regime for anticipated merger and merger. Under sections 55 to 56 of the Act, merger parties have the option of notifying their anticipated merger or merger to the Commission and applying for a decision as to whether such merger has infringed, or will infringe, the prohibition under section 54. Parties shall carry out their own assessment to determine whether notification may be appropriate, and may wish to seek legal advice if necessary.

An anticipated merger or merger that was not notified to MAVCOM that raises competition concerns under the Malaysian Aviation Commission Act 2015 carries risks to the merger parties. The Commission may initiate an investigation under section 83 of the Act where there is reason to suspect that an anticipated merger or a merger would infringe the prohibition under section 54 of the Act.

12. When would it be appropriate for merger parties to notify MAVCOM of an anticipated merger or merger?

Merger parties shall assess whether an application to the Commission is appropriate for their anticipated merger or merger. In general, an anticipated merger or a merger should be notified to the Commission if the merger parties think the merger may result in a substantial lessening of competition within any aviation service market.

At present, MAVCOM is more likely to enquire or initiate an investigation into an anticipated merger or a merger if:

  • the combined turnover of the merger parties in Malaysia in the financial year preceding the transaction is at least RM50 million; or
  • the combined worldwide turnover of the merger parties in the financial year preceding the transaction of the merger parties is at least RM500 million.

In any case, MAVCOM has the power to investigate an anticipated merger or a merger where there is reason to suspect that it has resulted, or may be expected to result, in a substantial lessening of competition in any aviation service market, even where the combined local or worldwide turnover of the merger parties is below the above threshold.

13. How do I notify MAVCOM on an anticipated merger or a merger?

For information on the notification of an anticipated merger or a merger, please contact us at competition@mavcom.my