5 June, 2019
On 17 May 2019, the Malaysian Communications and Multimedia Commission (“MCMC”) published two sets of guidelines known as “Guidelines on Mergers and Acquisitions” (“Merger Guidelines”) and “Guidelines on Authorisation of Conduct” (“Conduct Guidelines”).
The Merger Guidelines are premised on increasing transparency and providing clarity to the industry on the approach taken by MCMC when assessing mergers and acquisitions as well as authorisation of conduct which could be construed as substantially lessening competition.
Guidelines on Mergers and Acquisitions
Recognising the benefits of M&A to a functioning economy, and the need to balance this benefit against potential anti-competitive effects, MCMC will assess M&A transactions affecting the communications and multimedia sector which are voluntarily submitted to it in the manner set out in the Merger Guidelines. The procedures established through these Guidelines can enable M&A parties to:
a. obtain MCMC’s view in respect of the competitive effects of an M&A transaction; and
b. decide whether to apply to MCMC for authorisation of an M&A transaction subject to various undertakings to be given by the M&A parties or to proceed with the M&A in a substantially restructured form to avoid breaching the provisions of the Communications and Multimedia Act 1998 (“CMA”).
Guidelines on Authorisation of Conduct
The Conduct Guidelines create a process by which licensees may voluntarily apply to MCMC to assess whether their M&A transaction breaches or would breach the prohibition in section 133 of the CMA or would require MCMC to exercise its power to direct the licensees to cease the conduct which has or may have the effect of substantially lessening competition in any communications market under subsection 139(1) of the CMA.
MCMC will permit licensees to submit an application for authorisation of conduct in accordance with the procedure set out in the Conduct Guidelines, in respect of a merger or acquisition before, during or after submitting an application for assessment under the Merger Guidelines.
Licensees who apply for authorisation of conduct may qualify for immunity from any legal proceedings that may be undertaken by MCMC for contravening the competition provisions of the CMA.
For further information, please contact:
Putri Noor Shariza Noordin, Partner, Shearn Delamore & Co
shariza@shearndelamore.com
