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Watchdog can bite again

Watchdogs can hardly act as a deterrent to abusers if they are incapable of baring their teeth when they see a threat by anyone determined to break the law, provided one’s rights are fully upheld.

The news that the local Competition Act will be amended, thus restoring to the Competition Office the power to impose fines, is welcome not only to consumer organisations but also to the public. The Malta Chambers of SMEs (GRTU), for one, has termed the decision as a move in the right direction.

The Director of Competition has had his decisions to proceed against those allegedly breaching competition law challenged successfully in the Civil Court. Moreover, in 2016, the Court of Appeal decided that specific provisions of the Competition Act were unconstitutional. This decision allowed the competition watchdog to bark but not bite. Such limitation does not help to protect ordinary citizens from abuse of big business that have market dominance or even small businesses, especially in the context of a small market where the dynamics of competition do not always function as desired.

The government had initially decided to amend the Constitution but when the Opposition objected it agreed to change the Competition and Consumers Affairs Act to empower the Director of Competition to take executive action against those judged to be in breach of fair trading laws.

Some of the essential legal changes include the dismantling of the Competition and Consumer Appeals Tribunal because those found to be in breach of the Competition Act would be able to take their case to the Civil Court. This principle has already been applied in the legislation for financial consumers’ protection where the decisions of the financial service arbiter can be challenged in court.

The proposed Competition Act amendments will encourage the interested parties to agree on out-of-court settlements rather than pursue the full legal process. As an incentive, it is being suggested that fines are cut by up to 35 per cent in cases where the parties agree to a ‘friendly’ settlement.

No one expects honest business people to be subjected to undue harassment just because of a complaint by an aggrieved consumer. It makes sense that the power of the director general in the Competition Office to order inspections on business premises will be revoked. Only the Court of Magistrates will be able to authorise the competition watchdog to make such inspections when a breach of competition laws is suspected.

Consumers often find the prospect of having to take legal action against a business for alleged breach of their rights an overwhelming experience. The introduction of a consumer protection authority has been a welcome development in the last few years. Now is the right time to empower the Competition Office to act speedily to settle disputes and to impose sanctions when necessary.

The proposed amendments to the Competition Act should serve to ensure that consumers’ rights are protected in a practical way and without undue delays. Of course, the changes being suggested will only come in force when Parliament approves the proposed changes.

Once the public consultation closes at the end of September, the government and the Opposition would do well to approve without undue delay the proposed amendments and any changes that may be found necessary in the consultation and debating stage.

This is a Times of Malta print editorial

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