Consumers’ lobby says law change proposals not bold enough

Consumers’ lobby says law change proposals not bold enough

Bill was issued last month

A two-year wait for the government to come out with proposals for how to overhaul the competition law turned out to be an anti-climax for the Consumers’ Association, which said the changes were not bold enough.

The comment was made in a detailed position paper issued in reaction to a Bill published last month by the Justice Ministry. The changes have been in the pipeline since May 2016, when the Court of Appeal ruled that certain provisions of the Competition Act were unconstitutional.

The case was instituted by the Federation of Estate Agents, which felt aggrieved by a decision of the Director for Competition to initiate proceedings against it over alleged breaches of the law.

Following the landmark judgment, the consumer watchdog refrained from imposing sanctions until changes were made to bring the law in line with the Constitution. Consequently, the regulator remained toothless for a good 27 months.

The government is now proposing that the Competition and Consumer Appeals Tribunal be abolished and instead decisions by the regulator be reviewed by the Civil Court (Commercial Section).

The Consumers’ Association criticised the government’s delay in rectifying the situation and questioned what measures would be taken in relation to cases which the Competition Office had investigated since May 2016.

It also expressed concern that the draft law was only attempting to rectify issues raised in the aforementioned court case.

In May 2016, the Court of Appeal ruled certain provisions of the Competition Act were unconstitutional

The association is recommending the involvement of technical experts with no voting rights during Civil Court proceedings to ensure that matters being dealt with are not only considered from a legal perspective but also from a consumer and competitive market standpoint.

Another proposal by the government is the automatic suspension of fines should the aggrieved trader file an appeal, pending the final decision of the court. The consumer lobby was critical of such a move, saying it could encourage non-compliant parties to challenge decisions for the sake of delaying proceedings.

The lobby is therefore recommending the introduction of annual compound interest of eight per cent on the amount due in case a fine is confirmed by the court. This mechanism would be applicable for the period between the time a fine is imposed and the date on which decision is upheld.

It is also calling for an upward revision of the fines, saying they should vary between one and five per cent of the turnover of the non-compliant party.

Questions were also raised on the three-month time frame which the Court of Appeal would have to decide challenges to Civil Court rulings. The association noted that “it makes no sense to provide for such a time frame” if there were no measures in place to ensure it was complied with in the first place.

It is being proposed that enforcement officers wait for “a reasonable time” before carrying out an inspection until the lawyer of the commercial entity under investigation is present. The Consumers’ Association expressed concern that such a proviso could jeopardise the investigation, “given that data today is held in a digital form which can be tampered with from anywhere in a few minutes”.

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