MyCC and MCMC raise concerns on telecommunications providers’ exclusivity arrangements in high-rise buildings

20 October 2020

Following complaints from the public, the Malaysia Competition Commission (“MyCC”) and the Malaysian Communications and Multimedia Commission (“MCMC”) had in August 2020 released a joint statement stating that both authorities are co-operating to address exclusivity arrangements between telecommunications service providers and property developers or building management companies in high-rise buildings.

Specifically, the MCMC and MyCC urged all telecommunications service providers, property developers and building management companies that have entered into such exclusive arrangements to take immediate remedial measures to prevent the MCMC and the MyCC from taking action under the Communications and Multimedia Act 1998 (“CMA 1998”) and the Competition Act 2010 (“CA 2010”) respectively.

Sectoral competition law for telco providers

Commercial activities within the telecommunications sector are excluded from the CA 2010 and hence fall outside the MyCC’s jurisdiction. Telecommunications providers’ activities are subject to the scrutiny of MCMC, and provisions of the CMA 1998 regulate competition issues within the telecommunications sector.

It is interesting to note that under the CMA 1998, a licensee who is found to have infringed the competition provisions may not only face a financial penalty of up to RM500,000, but also a potential imprisonment term not exceeding five years or both. It would therefore appear that telecommunications providers would be drawing the short end of the stick in an exclusive arrangement, as property developers (which are subject to CA 2010) would only be exposed to financial penalty under the CA 2010.

The Communications Infrastructure Planning Guidelines (“GPP-I”)

To this end, the MCMC has also recently published the GPP-I to provide guidance on the planning and development of communications infrastructure in new property developments. The GPP-I aims to:

• avoid inconsistencies in the development of communications infrastructure arising out of poor planning; and
• provide guidance to all stakeholders involved in the preparation of such development plans to achieve a uniform and sustainable standard.

Future developments

The collaboration between the MCMC and MyCC serves as a timely reminder to telecommunications service providers, property developers and building management companies to be cautious of their commercial arrangements, as both regulators have indicated strong disdain towards exclusive arrangements. These recent developments will likely allow more players to be present in the market, and consumers will then be able to select providers of their choice based on prices or quality of service as opposed to being limited by the scarcity of service providers in their respective areas.

Although there has not been any publicised cases or investigations conducted by the MyCC on exclusive arrangements, the collaboration with the MCMC indicates that the MyCC has taken a keen interest in this area and will likely be conducting more investigations in the future.

Reference materials

The MyCC press release on this development can be found on its website www.mycc.gov.my by clicking here.