E-commerce Law: Protection for the Consumers

Introduction

Malaysia’s e-commerce sector has emerged as a cornerstone of the national economy, reflecting the country’s rapid digital transformation and growing consumer reliance on online platforms. In 2024, the sector generated over RM1.22 trillion in revenue [1], a figure that continues to climb as more businesses and consumers embrace digital trade. Recognising the need for a modern and enforceable legal framework, the government has embarked on a comprehensive reform of its electronic commerce laws in 2025. These reforms aim to enhance consumer protection, regulate platform practices, and address the challenges posed by cross-border digital transactions. 

The foundation of Malaysia’s e-commerce legal framework is the Electronic Commerce Act 2006 (“Act 658”), which was originally enacted to facilitate electronic transactions and provide legal recognition for digital contracts. However, Act 658 has long been criticised for its limited regulatory scope and lack of enforcement mechanisms. Act 658 functions primarily as an enabling statute, without direct provisions to govern platform operators, sellers, or the conduct of online marketplaces. In response to these limitations, the Ministry of Domestic Trade and Cost of Living (“Ministry”) launched a formal review of Act 658 in April 2024, where such review is expected to conclude by August 2025 and involves extensive stakeholder engagement, including town hall sessions, roundtable discussions, and benchmarking visits abroad [2].

Significant Developments of Act 658

One of the most significant legal developments is the enforcement of the Consumer Protection (Electronic Trade Transactions) Regulations 2024 (“Regulations”), on 25 December 2024. These updated Regulations impose stringent obligations on online sellers and platform operators, in which sellers are now required to disclose comprehensive identification details, including their identification card details (for individuals) or CCM registration number (for companies), contact information, and business address. 

The Regulations have listed the mandatory disclosures by these online sellers, which includes information on description of the goods, price, method of payment, estimated delivery time as well as terms and conditions of sale. It is worth noting that such disclosures must be presented in the national language, Bahasa Melayu, being the mandatory language for among others, product details, product descriptions and seller information, with optional translations in other languages. This requirement ensures that consumers across Malaysia can access product details in the national language, promoting transparency and inclusivity. 

In addition to language and identity requirements, the Regulations mandate that sellers of regulated goods, must disclose and provide information on its online platforms relevant and valid certification by competent authority, which may include SIRIM and HALAL certification, certifying that its products have followed the standard of safety and health requirement. Online platforms are also required to maintain supplier records for a minimum of three (3) years and provide accessible complaint channels for consumers. 

Post-sale obligations have also been strengthened, in which sellers must bear the cost of redelivery in cases of defective or incorrect products. These provisions are designed to enhance consumer confidence and ensure accountability in digital transactions. 

Regulatory Strategies for Foreign E-Commerce Platforms

Beyond domestic regulation, the government is actively exploring mechanisms to address the growing influence of foreign-based e-commerce platforms that operate in Malaysia without a physical presence. These platforms often introduce products into the local market without being subject to Malaysian tax or consumer protection laws, creating an uneven playing field for local businesses. To address this, the Ministry is considering the introduction of legislation that provides extra-territorial jurisdiction, allowing Malaysian authorities to regulate foreign platforms that target Malaysian consumers. Additionally, government-to-government (G2G) agreements are among the options being explored to facilitate cross-border enforcement and ensure fair trade practices [3]. 

The anticipated E-Commerce Bill, scheduled to be tabled in Parliament during its first session in 2026, will consolidate these reforms into a comprehensive legal framework. The E-Commerce Bill is expected to include provisions for platform fee regulation, requiring platforms to consult authorities before implementing changes that affect sellers. It will also address licensing regimes, compliance models, and enforcement mechanisms to ensure that both local and foreign platforms operate fairly and transparently. The review process has involved over 300 stakeholders, including industry players, regulators, and consumer groups, ensuring that the proposed legislation reflects the needs and concerns of all parties [4]. 

Conclusion

In conclusion, Malaysia’s electronic commerce law in 2025 represents a pivotal shift toward a more structured, transparent, and accountable digital marketplace. The combination of updated regulations and the forthcoming legislative overhaul demonstrates the government’s commitment to balancing consumer protection with economic development. 

As the legal landscape continues to evolve, businesses must remain proactive in adapting to new requirements, while consumers can expect stronger safeguards and improved recourse mechanisms. Malaysia’s efforts to modernise its e-commerce laws not only support domestic growth but also position the country as a regional leader in digital trade governance.