The Malta Competition and Consumer Affairs Authority was set up in May 2011 as an intrinsic step in the process of bringing Malta in line with other advanced European Union countries.
The functions of the MCCAA are to promote and encourage competition; to safeguard consumers’ interests; to promote sound business standards; to promote the national metrology strategy, which is concerned with the scientific study of measurement; and to promote the smooth transposition and adoption of technical regulations under EU law.
Regrettably, it appears that, after an investigation of more than 18 months into competition in the fuels market, the watchdog remains in a position whereby it is unable to impose any fines when it finds any breach of the Competition Act. It, however, insists it can still make a decision or require remedial action, as the case may be, from any undertaking to ensure compliance with the law.
This ‘uncomfortable’ situation is the result of a judgment by the Court of Appeal four months ago.
Worse, according to sources close to the MCCAA, it appears the government is in no hurry to propose the requisite legal amendments to the law even though the competition watchdog may still be able to bark but can hardly bite.
The fuel investigation was sparked in 2015 following a decision by the owner of a Rabat fuel station to cut the price of diesel at the pump when complaints were rife about high fuel prices. His suppliers had ordered him to reverse the price reduction or else to lose the higher profit margin afforded to the fuel station.
This led to complaints of a breach of EU competition rules and the MCCAA rightly began an investigation.
The regulator went into the case as it is charged by law with doing. However, a Constitutional Court judgment on a totally unrelated case, concerning real estate agents, stopped it from acting as forcefully as it would have wanted.
The Court of Appeal in May confirmed an earlier ruling in a case instituted by the Federation of Real Estate Agents, upholding the conclusion that the Director General for Competition could not decide cases over alleged breaches of rules and impose fines because only a proper court of law could “guarantee a fair hearing”. It also ruled that certain parts of the Competition Act were in breach of the Constitution and had to be amended.
The decision related to the real estate agents effectively affects all cases before the MCCAA, including the vexed issue of fuel price reductions, and must await the necessary legal amendments first being promulgated.
Although the Office for Competition is still performing all other functions, including conducting investigations, it still cannot impose any fines for breaches of competition law until the necessary amendments to procedures to bring it into line with the Constitutional Court’s decision have been made.
The MCCAA may argue this does not make it powerless and toothless. It certainly weakens it. No wonder there is a strong element of frustration.
It appears that although proposals have been made to the Ministry for Social Dialogue, Consumer Affairs and Civil Liberties, “it seems this is not a priority”. If such is indeed the case – and given that the court’s significant ruling was made four months ago – they cast considerable doubts on all the talk of commitment to consumer rights.
There is only one way to go and that is for the ministry to prove it is not deliberately prevaricating and that the necessary amendments will be moved in Parliament on its immediate return from the summer recess in early October.