MCMC 'categorically denies' AIC objections to social media licensing

The Malaysian Communications and Multimedia Commission (MCMC) has issued a point-by-point rebuttal to the Asia Internet Coalition’s (AIC) objections to Malaysia’s plans to impose licensing on social media and instant messaging platforms.

It said it “categorically denies” all allegations the AIC had levelled against the licensing scheme in its open letter addressed to Prime Minister Anwar Ibrahim.

The commission also took the AIC to task for multiple revisions it had made to the letter since it was posted on the coalition’s website yesterday, particularly since Grab Malaysia has clarified it had nothing to do with the letter despite its company logo being included in the first version of the letter.

Describing the multiple revisions as “confusing”, it told the AIC to immediately provide the MCMC with proof that the AIC had the authority to write the letter and to make the subsequent changes.

“Kindly provide MCMC with this authorisation on an immediate basis so that we may understand more fully subsequent developments that as of this letter, we find difficult to comprehend,” it said.

The MCMC letter is signed by its chief network security officer Mohamed Sulaiman Sultan Suhaibuddeen on behalf of the commission’s chairperson.

Adverse impact

The first AIC letter was dated Aug 23 and was made public through its website yesterday, but it has since been revised at least twice.

The second version of the letter reduced the 17 “AIC member companies” listed in the letter to just six companies for “industry representation” and toned down some of the objections raised.

The third version did not feature the logos of any companies but otherwise maintained the contents of the second version. Both revised versions are dated Aug 26.

Among others, the AIC claimed the licensing scheme could adversely affect innovation and the economy, without making a meaningful impact on harmful online content.

It also claimed that the consultation sessions held were neither meaningful nor transparent since they lacked concrete details and involved only a small number of stakeholders.

It advocated self-regulation instead of licensing and cited the UK as an example of how social media and instant messaging platforms could be regulated without the costly process of establishing a local corporation and applying for a licence.

Protecting internet users

Addressing these concerns, the MCMC countered that the licensing regime is a critical tool to protect internet users from the rapid increase in harmful content and cybercrime, and such restrictions are not unique to Malaysia.

“This regulation is not an impediment to innovation but a necessary safeguard to ensure that the digital ecosystem remains open, secure, and trustworthy. Online service providers must be accountable and transparent with their security measures.

“The framework has been carefully designed to balance regulatory requirements with the need for continued innovation and flexibility.”

Contrary to AIC’s claims that will adversely affect Malaysia’s digital economy, the MCMC said the new regulations will instead boost the economy by creating a safer and more secure online environment.

“By holding online service providers accountable, the framework will increase investor confidence, knowing that Malaysia prioritizes a stable and legally compliant digital ecosystem.

“This initiative is a necessary step to ensure sustainable economic growth and maintain Malaysia’s competitive edge in the region.”

Taking responsibility

The MCMC asserted that the requirement to establish a local company is standard practice to ensure online service providers follow Malaysian law, and imposing criminal liabilities ensures they take their responsibilities seriously.

It highlighted that the licensing framework includes provisions that would protect online service providers acting in good faith in compliance with the law, and those aggrieved may appeal to a tribunal and thereafter in a court of law.

“This requirement is crucial for effective enforcement and does not inhibit foreign investment.

“On the contrary, it ensures that companies operating in Malaysia are committed to adhering to local laws, thereby enhancing the overall business environment,” it added.

Reasonable steps taken

The initial version of the AIC letter claimed there had been no formal engagement on the licencing framework before revising it to say there was inadequate engagement with no clear roadmap.

Refuting this, MCMC highlighted numerous communications and engagement sessions with stakeholders since May, including with the AIC itself and some of its member companies like Meta and Google.

“Contrary to AIC’s allegation, MCMC has taken all reasonable steps to engage, facilitate and assist the online service providers in their compliance journey prior to the enforcement date on Jan 1, 2025.

“Public consultations are being planned as part of the process to refine and finalise the guidelines, ensuring that all concerns are addressed fairly and transparently.

“The regulatory framework is the result of extensive dialogue and careful consideration of inputs from all relevant parties,” it said.

It should be noted that the engagement sessions listed by the MCMC took place prior to Aug 1, when the commission released an FAQ about the licensing framework.

One of the AIC’s objections is that some details regarding the framework, such as the threshold for the licensing requirement, were not disclosed before the FAQ was released.

Hence many companies not previously consulted by the MCMC may now find themselves under the scope of the new regulations.

The MCMC defended the threshold of imposing licensing on online service providers with more than eight million users in Malaysia, noting that India has a threshold of five million users and the UK set it a seven million users.

“The threshold has been set after careful analysis to balance regulatory oversight with the practical realities of the online service providers’ operation,” it said.

Refusing to slow the implementation of the licensing scheme, the MCMC said the five-month timeline beginning Aug 1 is reasonable and in line with international practices, taking into account the urgent need to tackle cyber threats and the operational realities of complying with the new regulations.

“Extending the grace period further would compromise the objective of enhancing user safety and mitigating the rapidly growing risks in the digital space,” it said.

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