MyCC launches market review on Malaysia’s digital economy ecosystem

Kuala Lumpur, Malaysia – The Ministry of Domestic Trade and Cost of Living (KPDN), through the Malaysia Competition Commission (MyCC), has launched a Market Review on the Digital Economy Ecosystem under the Competition Act 2010 [Act 712], as part of efforts to strengthen fair market practices and consumer protection in Malaysia.

The launch ceremony was held at PARKROYAL Collection Kuala Lumpur, with around 300 participants in attendance. The event brought together representatives from ministries and government agencies, industry players, consumer organisations and academic institutions.

According to MyCC, the market review aims to assess market structures and business practices within the digital economy sector that may affect competition, consumer choice, pricing of goods and services, and taxation in Malaysia. The initiative aligns with KPDN’s mandate to promote a sustainable and progressive domestic trade ecosystem.

Conducted over an 18-month period, the review covers four key areas: mobile operating systems and payment services; retail e-commerce platforms (retail marketplaces); digital advertising services; and online travel agencies (OTAs). It also examines issues related to privacy and data protection across these segments.

Among its findings, the review indicates that certain practices by digital platforms may potentially harm fair competition. These include high commission structures, restrictive contractual terms, limited transparency in pricing mechanisms and control over consumer data. MyCC noted that such practices could impact the cost of living and reduce the competitiveness of local businesses, particularly micro, small and medium enterprises (MSMEs).

In response, MyCC has proposed 18 policy recommendations. One of the key proposals is the establishment of a Central Digital Economy Taskforce that adopts a whole-of-government approach to address regulatory gaps more effectively.

The review also underscores the need for enforcement action under the Competition Act 2010 against online travel agencies, through closer collaboration between MyCC, the Ministry of Tourism, Arts and Culture (MOTAC), and the Malaysian Communications and Multimedia Commission (MCMC).

In addition, the review highlights potential improvements to the digital taxation framework to ensure that digital platforms contribute fairly to national development. Data on the Service Tax on Digital Services (SToDS) shows collections increased to RM1.62 billion in 2024, compared to RM802 million in 2021. However, the review estimates that a significant annual tax contribution gap remains due to differences in tax rates between digital platforms and local businesses.