The Asia Internet Coalition (AIC) has raised concerns about Malaysia’s upcoming licensing system for social media and private messaging platforms. In an open letter to Prime Minister Datuk Seri Anwar Ibrahim, the AIC highlighted the potential negative impacts of the proposed framework on the digital economy. The group, which represents major tech companies like Meta, Google, Apple, Snap, and Grab, argues that the new regulations could stifle innovation, deter investments, and burden businesses with compliance requirements.
The AIC emphasized that the proposed changes signify a significant shift in Malaysia’s regulatory environment. Introducing such a change without a clear roadmap or industry engagement risks destabilizing an ecosystem that relies on innovation, flexibility, and openness. The absence of formal public consultations prior to the publication of the Information Paper and FAQs on Aug 1, 2024, has created uncertainty within the industry about the scope and implications of the new obligations.
The Communications and Multimedia Commission (MCMC) announced that all social media and messaging services with at least eight million registered users in Malaysia must apply for a Class Licence starting from Aug 1. Failure to obtain a Class Licence for Application Service Providers under the Communications and Multimedia Act 1998 after the effective date would be considered an offense, with legal action possible under the Act. The enforcement is set to take effect on Jan 1 next year.
Highlighting Malaysia’s status as a key digital hub, the AIC pointed out that the digital economy contributed 23.2% to the nation’s GDP in 2024, with projections to rise to 25.5% by 2025. The group warned that the proposed regulations could disrupt this momentum, affecting investor confidence and economic growth. While acknowledging the government’s commitment to addressing online harms such as scams, online gambling, and hate speech, the AIC stressed the need for a balanced approach.
The AIC called for a pause in the implementation of the licensing regime and urged the government to engage in meaningful collaboration with the industry. The group expressed its readiness to work with the government on these critical issues and encouraged ongoing dialogue to align the licensing regime with Malaysia’s broader economic goals.
In conclusion, the concerns raised by the Asia Internet Coalition regarding Malaysia’s upcoming licensing system for social media and private messaging platforms highlight the potential negative impacts on the digital economy. It is crucial for the government to consider the industry’s feedback and work towards a balanced approach that supports innovation, investment, and economic growth. Collaboration between the government and tech companies is essential to ensure that the regulatory framework aligns with Malaysia’s broader economic objectives.