The government is set to replace the existing Electronic Commerce Act 2006 with a new law aimed at strengthening the regulation and accountability of platforms, sellers and users involved in e-commerce. Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali said the move is necessary because the current legislation primarily establishes the legal validity of electronic transactions without comprehensively setting out the responsibilities of parties operating within the e-commerce ecosystem.
The move follows Prime Minister Datuk Seri Anwar Ibrahim’s announcement on Aug 20 that the government would expedite the drafting of the e-Commerce Bill to improve both facilitation and regulation of the sector as digital business continues to grow. He said the updated framework is intended to ensure Malaysia’s e-commerce ecosystem develops in an orderly manner while providing greater convenience and protection to those involved, including young people and new entrepreneurs.
e-Commerce Act 2006
The Electronic Commerce Act 2006, or Act 658, was introduced to provide legal recognition to electronic messages in commercial transactions and allow them to fulfil certain legal requirements. It establishes that information and contracts cannot be denied legal effect simply because they exist or were formed electronically, while also setting out rules covering electronic signatures, seals, witnesses, originals, document retention, copies, prescribed forms and delivery.
The Act also covers the attribution of electronic messages, as well as when and where such messages are considered sent or received. However, its scope is primarily focused on providing the legal foundation for electronic transactions rather than establishing a comprehensive regulatory framework for today’s broader e-commerce ecosystem.
In other words, the 2006 Act essentially makes online transactions legally valid, but it does not comprehensively regulate how e-commerce platforms, sellers and other participants should behave. This distinction is important as the proposed replacement is intended to go beyond recognising electronic transactions and establish clearer responsibilities and accountability across the e-commerce ecosystem.
New Law To Address Accountability
Armizan said the current Act does not give the Domestic Trade and Cost of Living Ministry (KPDN), which is responsible for e-commerce matters, sufficient authority or a comprehensive legal framework to regulate the various aspects of the sector. “This Electronic Commerce Act is merely a legal framework to validate online and electronic commerce, but the aspect of accountability is not clearly outlined in the legislation,” he said.
KPDN submitted a Cabinet Memorandum at the policy level two months ago, Armizan added, with the ministry now working with the Attorney-General’s Chambers, Communications Ministry, Malaysian Communications and Multimedia Commission (MCMC) and Digital Ministry to prepare the provisions for the drafting phase. The new bill is scheduled to be presented during the upcoming parliamentary session, although details on the specific obligations and enforcement powers that will be introduced have yet to be disclosed.
