The Malaysian government has signalled its intent to conduct a thorough examination of potentially anti-competitive behaviour on major e-commerce platforms, particularly cross-border marketplaces that have drawn criticism for aggressive pricing strategies that threaten local businesses. Speaking in the Dewan Negara, Deputy Minister in the Prime Minister's Department (Religious Affairs) Senator Marhamah Rosli emphasised that determining whether low prices constitute predatory or anti-competitive practices requires substantial investigation into market fundamentals rather than surface-level assessment.
The concern centres on platforms such as Pinduoduo and Temu, which have expanded aggressively across Southeast Asia by offering steeply discounted goods. Local traders and business associations have raised alarms about their ability to compete fairly, citing structural disadvantages including higher operational expenses for rent, wages, statutory contributions, customs duties and various business levies that foreign sellers can often circumvent or subsidise through alternative financing mechanisms.
Marhamah clarified that simply identifying low prices on e-commerce marketplaces does not automatically constitute predatory pricing or anti-competitive conduct. Instead, authorities must examine a comprehensive set of factors to determine whether unfair practices exist. These include analysing the actual cost structures underlying the pricing, identifying sources of subsidies or financing that may artificially depress prices, evaluating the seller's market position and dominance, determining the temporal extent of promotional pricing, and measuring the cumulative impact on legitimate competitors and overall market dynamics.
While Malaysia maintains its foundational commitment to open-market economics that prioritises trade liberalisation, investment attraction and competitive dynamics, the government has made clear this philosophical position does not translate to a laissez-faire regulatory environment. Marhamah stressed that the market remains subject to legal frameworks designed to ensure fair competition and protect stakeholders from exploitative conduct. All participants—whether domestic retailers, international sellers or digital platforms themselves—face identical legal obligations and responsibilities.
The administration has drawn a deliberate line regarding practices that the government deems unacceptable within the Malaysian market ecosystem. Anti-competitive behaviour that unfairly eliminates competitors, exploits dominant market positions, or ultimately damages consumers and the broader business environment will not receive tolerance despite the nation's pro-business orientation. This stance reflects an attempt to balance the efficiency gains associated with open competition against the social and economic costs of unchecked market consolidation or predatory conduct.
Government officials acknowledge a dual responsibility regarding market regulation. On one side, consumers must continue to benefit from competitive pricing, product variety and service quality improvements that emerge from vigorous competition. On the other side, the government must safeguard product safety and quality standards while protecting consumer rights and ensuring micro, small and medium enterprises—which constitute a significant employment and economic foundation for Malaysia—can survive and develop without facing systematically unfair competitive conditions.
To address these concerns comprehensively, the Cabinet has authorised development of a new E-Commerce Act that will establish a more detailed legal framework aligned with contemporary digital economy realities. This legislative initiative has progressed beyond preliminary discussion stages and entered active implementation. The government has established both a steering committee and technical committee to oversee the drafting process, with officials committed to meeting predetermined timelines for completion.
The proposed legislation will examine multiple dimensions of e-commerce governance previously left unaddressed or partially covered by existing frameworks. Key areas for examination include clarifying the legal responsibilities and liability exposure of e-commerce platforms themselves, establishing rules for cross-border transactions, ensuring foreign sellers comply with applicable Malaysian regulations, strengthening consumer protection mechanisms, mandating transparency in seller credentials and product information, developing dispute resolution procedures that provide accessible remedies for aggrieved parties, and creating enforcement mechanisms that can reach and penalise entities that lack physical presence in Malaysia.
For Malaysian MSMEs, the regulatory development represents both opportunity and ongoing uncertainty. Strengthened frameworks could potentially level competitive dynamics by ensuring foreign sellers bear equivalent compliance costs and cannot exploit jurisdictional gaps. However, implementation challenges remain substantial. Enforcement against platforms headquartered in China or other jurisdictions requires sophisticated coordination with foreign authorities and may prove difficult in practice. Additionally, overly restrictive regulations risk fragmenting regional e-commerce markets and reducing consumer access to competitively priced goods.
The broader Southeast Asian context adds urgency to Malaysia's regulatory deliberations. Pinduoduo, Temu and similar platforms have rapidly expanded throughout the region, creating uniform pressure on local retail sectors across multiple countries. Malaysia's approach could establish precedent for other ASEAN members grappling with identical challenges. Coordinated regional responses might prove more effective than unilateral national actions, though achieving consensus across diverse regulatory philosophies presents substantial diplomatic and technical obstacles.
Marhamah's comments reveal government recognition that academic and empirical investigation must precede regulatory action. Simply assuming low prices reflect anti-competitive conduct without rigorous analysis risks imposing constraints that ultimately harm consumers or distort market efficiency. The detailed study approach suggests Malaysian authorities are attempting to craft evidence-based policy rather than reactive measures driven by business lobbying.
The E-Commerce Act development process will likely extend over several years given the technical complexity involved. During this interim period, existing competition law—primarily the Competition Act 2010—remains the primary tool for addressing potentially anti-competitive conduct on e-commerce platforms. Whether existing frameworks adequately address digital economy practices represents an ongoing question that the new legislation aims to resolve conclusively.
