Reflections on the CREW Methodology
and Uptake in Other Countries/Sectors:
MALAYSIA
R O K I A H A L AV I
International Islamic University Malaysia and
Consultant for Consumer International Malaysia
C r e w I n t e r n a t i o n a l C o n f e r e n c e , 1 8 - 1 9 N o v e m b e r, 2 0 1 4 , B a n g k o k , T h a i l a n d
Competition Policy in Malaysia
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Competition Act enacted in 2010 and enforced in 2012 –
still at infancy stage.
Provisions – anti-competitive behaviour of vertical and
horizontal agreements and abuse of dominance.
The key objective is to promote economic development by
regulating market structure and behaviour of market players
– process of competition.
Consumers welfare – indirect outcome – complemented by
Consumer’s Protection Act 1999.
Merger Controls, Energy Sector and Telecommunication
Sector not included in the Act
Issues in the Implementation of CA
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 Introduction of CA – will have significant impact on the way
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businesses are conducted.
Businesses are still unaware of the law and what constitutes
anti-competitive behaviour – especially the SMEs - need to
educate the public – both businesses and consumers.
Media plays an important role in reporting anti-competitive
cases – should take advocacy role as well
Enforcement – challenging to ensure effectiveness of the law.
Transparency on the cases that have been taken action by
MyCC - why the decision was taken and how the Commission
is enforcing the law – need to made available to the public.
Monitoring and evaluation – output-based vs impact-based.
Issues in the Implementation of CA
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 Many anti-competitive activities in the economy are
the result of the government’s policies itself:
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price-control (the case of hyper-market discounted price for
price-controlled items)
Subsidy (case of subsidy for paddy farmers)
Creation of champions through mergers and take-overs
(plantation, mobile phone service and financial sector)
Licensing (case of taxi permits, Mega steel, Astro, Telekom,
Cahaya Mata cement company)
 Hence, the enforcement of competition policy
becomes difficult and politically sensitive.
Issues in the Implementation of CA
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 Lack of data and resources:
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the authority needs to have a clear understanding on how the
market works, what is the fundamental forces underlying
firm’s conduct and what are the effects of competition law on
the economy.
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this requires substantial data and rigorous economic analysis
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Challenge: lack of data, resources, expertise
There is hardly any studies/economic analysis on the impact of anticompetitive practices in Malaysia – mostly legal analysis and market review.
Hence, replicating CREW project is highly relevant and necessary for
Malaysia. Comments on Crew Project –
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Implementation and actions
Monitoring & evaluation
(impact-based vs output-based)
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Safety
Transparency (information)
Sectors that have possibility for replicating CREW Project
in Malaysia
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1. Automotive Sector
 There are many anti-competitive activities in this sector:
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Approved Permit – APs are given to specific firms (to create Bumiputera
entrepreneurs) to import CBUs. Distributors then obtain supply for these firms,
including manufacturers/assemblers like Honda, Toyota.
Excise duty exemption – based on local content of the car –the higher local
content the higher is duty exemption. This means Proton and Perodua get higher
duty exemption.
National Auto Policy (NAP) - The excise duty exemption will only be given to
locally assembled or completely-knocked-down (CKD) hybrid and electric cars.
Out of the seven EEV or hybrid players in Malaysia, only one player benefits
from the new policy and that is DRB-Hicom Bhd. Before 2014 – all (EEVs)
hybrids and EVs were exempted from import duties and get a 50% exemption
from excise duties. Excise duty ranges from 80% to 105%, import duties are at
around 30%.
Such discriminatory practices – competitive harm effect – consumers have to pay
more
Sectors that have possibility for replicating CREW Project
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2. Pharmaceutical Industry 
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Predatory practices by large chain pharmacies – drug suppliers give
huge discount for bulk purchase
Drug companies also give big discount for clinics
Community pharmacies are worse off – have difficulty to compete.
Hence – there is competitive harm in the pharmaceutical industry –
especially for small independent pharmacies
Chain pharmacy do not open their branches in remote areas or
where the size of the market is small – affect the consumers
Sectors that have possibility for replicating CREW Project
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3. Banking Sector
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Adjustment of the base lending rates between financial institutions
and the margin of financing - set almost simultaneously.
Possibility of parallel behaviour
Fees on transactions determined by the Association of Banks –
possibility of the fees being fixed though collusion among the banks.
Similar behaviour can be found in the insurance sector as well.
Consumers are worse off – have to incur high financial transaction
costs
Sectors that have possibility for replicating CREW Project
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4. Cement Industry
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Good case of implicit collusion or concerted practice.
There are currently five players: Lafarge (controlled 40 per cent of the
domestic cement market), YTL Cement (29 per cent), CIMA (16 per cent),
Tasek (9 per cent) and Holcim (the balance).
In 2008 and 2012 - when Lafarge Malayan Cement Bhd announced that it
would raise the price of cement in 2008, other players follow suit.
The mutual interdependence between firms in the oligopolistic market
creates market power that could have anti-competitive effect.
Challenge: difficult to prove that there is concerted practice.
Operational Issues
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 CREW project – comprehensive and has several
stages of implementation.
 Would require legal and economics expertise.
 Time consuming – time-frame of the research.
 Impact-based approach would be politically sensitive
for anti-competitive practices that arise from
government policies.