PETALING JAYA: The Asia Internet Coalition (AIC), an industry association representing leading Internet and technology companies, has voiced its concerns regarding Malaysia's upcoming licensing system for social media and private messaging platforms.
In an open letter addressed to Prime Minister Datuk Seri Anwar Ibrahim, the AIC highlighted the potential negative impacts of the proposed licensing framework on the digital economy.
The group, which represents companies such as Meta, Google, Apple, Snap and Grab, argues that the new regulations could hinder innovation, deter investments, and place undue compliance burdens on businesses.
The AIC said the proposed changes represent a significant shift in Malaysia's regulatory environment.
"Introducing such a change without a clear roadmap or sufficient industry engagement risks destabilising an ecosystem that relies on innovation, flexibility, and openness," the letter stated.
The group also noted the absence of formal public consultations prior to the publication of the Information Paper and FAQs on Aug 1, 2024. According to the AIC, this lack of dialogue 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 services and Internet messaging services with at least eight million registered users in Malaysia must apply for a Class Licence beginning Aug 1.
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Failure to obtain a Class Licence for Application Service Providers under the Communications and Multimedia Act 1998 after the effective date would be an offence, said MCMC, adding that appropriate legal action can be taken under the Act.
The enforcement is effective 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. They 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 group called for a pause in the implementation of the licensing regime and urged the government to engage in meaningful collaboration with the industry.
The industry 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.
