The Malaysian government, through the Ministry of Domestic Trade and Cost of Living (KPDN), has introduced new regulations for e-commerce platforms aimed at promoting transparency, boosting consumer confidence, and ensuring accountability among sellers and platform operators in digital transactions.
These regulations apply to all online sellers, whether you're operating on platforms like Lazada, Shopee, TikTok Shop, or running your own e-commerce site.
While enforcement was originally scheduled for June 24, it has since been postponed. KPDN’s Enforcement Director, Datuk Azman Adam, announced the delay following substantial feedback from industry stakeholders regarding implementation challenges.
Implications for E-Commerce Sellers
What Sellers Are Recommended To Do:
Although enforcement has been postponed, sellers are strongly encouraged to begin preparations to ensure future compliance. Key steps include:
Registering your business with the Companies Commission of Malaysia (SSM), as this remains a core legal requirement.
Updating information systems to capture and display all necessary disclosure details clearly to consumers.
Preparing translations of product titles and descriptions into Bahasa Malaysia to meet upcoming language requirements.
Setting up documentation processes to maintain accurate records, in line with the regulation’s three-year retention guideline.
Financial and Policy Considerations
These regulations come alongside other policy shifts in Malaysia, such as the expanded Sales and Service Tax (SST) framework set to take effect on July 1, 2025. E-commerce sellers must be ready to manage both consumer protection compliance and tax obligations. A proactive and comprehensive compliance plan will be crucial to avoid disruptions and penalties.
Industry Concerns
Several important concerns have been raised by the e-commerce community regarding the upcoming regulations:
Translation Burden
Translating product information into Bahasa Malaysia presents a significant cost and operational challenge, particularly for small businesses and cross-border sellers.
Impact on Search Functionality
Many sellers are concerned that requiring Bahasa Malaysia listings may disrupt current search algorithms and user browsing behavior. This could lead to a drop in product discoverability and sales performance.
Compliance Costs
The cost of non-compliance is high. Individuals may face fines of up to RM50,000 or imprisonment of up to three years. Companies may be fined up to RM100,000 for a first offense, with penalties rising to RM200,000 for repeat violations.
Global Competitiveness
Some industry observers believe that limiting listings to Bahasa Malaysia could reduce the visibility of Malaysian products in the global marketplace, where English is the dominant language.
Ongoing Legislative Review
The regulatory environment remains in flux, as KPDN is currently undertaking a comprehensive review of existing e-commerce laws. Minister Datuk Armizan Mohd Ali shared that the review began in April 2024 and is scheduled for completion by August 2025. It includes an assessment of the Electronic Commerce Act 2006, the Consumer Protection Act 1999, and the Consumer Protection (Electronic Trade Transactions) Regulations 2012.
This review aims to identify gaps in current legislation, evaluate the overall regulatory scope, and align Malaysia's e-commerce policies with international standards. A town hall session will be held on July 17, 2025, to collect further input from industry stakeholders on the proposed regulatory framework.
Conclusion
The Consumer Protection (Electronic Trade Transactions) Regulations 2024 mark Malaysia’s most significant update to e-commerce regulation in more than a decade. Although enforcement has been postponed in response to industry concerns, sellers are encouraged to use this time to prepare for eventual implementation.
The ongoing legislative review offers an opportunity for stakeholders to provide feedback. However, businesses should expect that stronger consumer protection measures will be introduced in some form once the review is complete.
These regulations signal Malaysia’s commitment to safeguarding consumer rights in the digital economy. However, their successful rollout will require a thoughtful balance between regulatory goals, operational practicality, and global competitiveness. Sellers are advised to closely follow official communications from KPDN for updates on the revised timeline and any changes to the regulatory framework.
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