After waiting for more than two years, the competition watchdog may finally rediscover its teeth and be in a position to impose fines, thanks to changes to the law, parts of which had been declared unconstitutional.
Still, no time frames have been given on when the draft amendments, now open for public consultation, will be presented to Parliament.
It is being proposed that the Competition and Consumer Appeals Tribunal will be abolished, and instead, decisions made by the regulator may be challenged before the Civil Court (Commercial Section).
The Court of Appeal decided, in May 2016, certain provisions of the Competition Act were unconstitutional. It was deciding a case the Federation of Estate Agents had instituted, feeling aggrieved by the Director for Competition decision to proceed against it over alleged breaches of the law. The federation argued only a proper court could decide such matters, which, it pointed out, could result in a massive administrative fine of up to €1.25 million.
Its application was upheld by the Civil Court in 2015, and the decision was confirmed on appeal a year later. In view of this, the Director General for Competition announced he would not impose sanctions until changes were made to bring the law in line with the Constitution.
QUESTION TIME: Why is it taking so long to enact changes to the law?
The Competition Office’s weak position was fully exposed in October 2016 when it refrained from imposing sanctions despite finding a fuel supplier and a petrol station owner guilty of colluding to price fix diesel at the pump.
The delay to restore the full powers to the competition watchdog was compounded in January last year when the government opted to amend the Constitution rather than the law itself.
However, the minister responsible for consumer affairs was forced to return to the drawing board when the Opposition would not play ball, arguing the changes could dilute the right to a fair hearing and open the door for tribunals handling criminal cases instead of proper courts.
Such changes to the Constitution require a two-thirds majority.
Twenty months down the line, the Justice Ministry has finally presented new proposed changes to the Competition and Consumer Affairs Act and other laws.
The government is proposing that the Civil Court (Commercial Section) replace the Competition and Consumer Appeals Tribunal.
Furthermore, in line with what is being proposed, decisions made by the directors general responsible for competition and for consumer affairs could be challenged on points of law and fact.
While the court would have the power to revoke decisions by the directors, any administrative fines would be automatically suspended pending the outcome of the appeal.
In case of settlement, the 10 per cent reduction in the fine would be revised upwards to an amount varying between 10 and 35 per cent, with the objective being to encourage settlements over court disputes.
Another change on the cards is to remove the director general’s power to order inspections in business premises upon his written authorisation. Instead, it would be up to the Court of Magistrates to issue a warrant.
The public consultation period will remain open until September 28 and comments can be sent by e-mail to publicconsultation.mccaa@mccaa.org.mt or by post to Public Consultation, Malta Competition and Consumer Affairs Authority, Mizzi House, National Road, Blata l-Bajda, ĦMR 9010.