Apart from being unable to impose fines, the competition watchdog has been dealt a further blow after a court ruled last week that it cannot even carry out its own investigation to determine whether a breach was committed or not.

The judgment was handed down by Madam Justice Anna Felice in a case instituted by Falzon Group Holdings Ltd and San Lucian Oil Company Ltd against the Director-General of Competition.

The two companies had been found guilty of colluding with M&N Camilleri Petrol Station to fix the price of diesel at the pump.

The Competition Office had launched an investigation after the Times of Malta reported in January 2015 that a Rabat station owner had been pressured not to reduce the price of diesel. Though they had not been fined, the oil companies had nonetheless felt aggrieved by the decision and had sought redress in court.

Madam Justice Felice upheld their arguments that proceedings regarding breaches of competition law were of a criminal nature and, consequently, should only be heard before a proper court.

A leading competition law expert, who preferred to remain anonymous, told Times of Malta the judgment was “very alarming” in that, as things stand, the Competition Office had been rendered completely toothless.

As things stand, the Competition Office has been rendered completely toothless

His concerns were raised in the wake of a 2016 landmark judgment in a case initiated by the Federation of Estate Agents. The federation argued that the director of competition’s decision to open an investigation against it could potentially have resulted in a fine of up to €1.25 million.

It won the case and the court’s decision was confirmed on appeal. The judgment had sent shockwaves in legal circles, as the court had deemed a provision of the Competition Act as unconstitutional. To date, the issue is still pending as the government is yet to move a Bill in Parliament to make the necessary changes.

As a result of the court ruling, the director general had refrained from imposing any fines, in an attempt not to find himself in hot water once again. It was for this reason that the two oil companies and a fuel supplier mentioned earlier had not been fined. Nonetheless, the oil companies had challenged the decision on various grounds, notably that the investigation breached their fundamental right to a fair hearing and that they had not been informed that an investigation against them had been launched.

Furthermore, they said that the decision not to impose any fine did not change the nature of the investigation itself, which was of a criminal nature.

This argument was upheld by the court, which also pointed out that a guilty verdict by the Competition Office could result in further sanctions such as the companies being blacklisted by the director of contracts.

Such a scenario could have serious repercussions for the companies in question, even if they were not fined, the court held.

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