Almost two years from a landmark court judgment which rendered the competition watchdog toothless, this entity is still limbo and unable to impose fines, to the detriment of both consumers and retailers.
Despite this long wait, a Justice Ministry spokesman was rather evasive when the Times of Malta enquired on the matter, saying the planned changes would be published for public consultation in “the next few weeks”.
The issue revolves on a court of appeal ruling handed down in May 2016, which confirmed that certain provisions of the existing Competition Act were unconstitutional. The case had been instituted by the Federation of Real Estate Agents in response to a €1.2 million fine imposed on it by the competition tribunal.
However, the court of appeal had ruled that the director general for competition could not decide cases over alleged breach of rules and impose fines because only a proper court could guarantee a fair hearing.
Consequently, the competition watchdog refrained from imposing any fines, even in cases when it had concluded that there had been a breach.
The delay to restore the full powers to the competition watchdog was further compounded, when in January last year the government opted to amend the Constitution rather than the law itself.
Undertakings can flout competition law at will
It turned out that the Consumer Affairs Minister was forced to go back to the drawing board, as the Opposition would not play ball saying the changes could dilute the right to a fair hearing and open the door for criminal cases being handled by tribunals instead of proper courts. Concerns had been also raised by the Dean of the Faculty of Laws, Prof. Kevin Aquilina.
Thirteen months down the line, however, the government has yet to take action. A competition lawyer who preferred to remain anonymous described the current situation as “deplorable”.
“Undertakings can act in breach of competition law, and yet unless the law is amended the director general is effectively powerless to impose punitive penalties to ensure compliance with the law,” he told this newspaper.
He pointed out that there was already a precedent, since in October 2016, a fuel supplier and a petrol station owner were found guilty of colluding to fix the cost of diesel at the pump, but no administrative fine was imposed.
“This is conveying the messages that undertakings can flout competition law at will, in the knowledge that the director general is powerless to impose dissuasive penalties – a situation which bodes ill both for honest businesses and consumers alike.”
Asked for the state of play, a Justice Ministry spokesman said that amendments to Malta Competition and Consumer Affairs Authority Act, Competition Act, Consumer Affairs Act and subsidiary legislation had been drafted with a view to being issued for public consultation “in the next few weeks”.
However, no definite timeframes were given when the competition tribunal’s full powers would be restored and the reason for the delays experienced so far. It noted that last October, government had also started consultations with the Opposition.
Without going into detail the ministry noted that in the last two years the Office for Competition had continued to investigate possible breaches, evaluating mergers and acquisitions and had issued interim measures which were complied with.