Obstacles to consumer rights
The protection of consumer rights is one of the most fundamental objectives of the EU. Both the European Parliament and the Commission work assiduously to ensure that European citizens get a fair deal from businesses and that genuine competition benefits consumers.
Government-appointed regulators are meant to be the gatekeepers that protect consumers from the abuse of business operators. It stands to reason such regulators are given the legal sanctioning tools to curb abuse. This protection is not happening in Malta where the Competition Office has been rendered toothless through legal anomalies the government has so far failed to address.
Nationalist MP Chris Said asked Justice Minister Owen Bonnici for an update on the government’s plan to make the necessary changes to the law giving the Competition Office the legal right to investigate alleged abuse of competition rules and impose fines when appropriate. The government intended to issue the Bill comprising the necessary legal changes “sometime this year”, the minister replied.
The legal conundrum was exposed through a landmark decision in May 2016 when the Court of Appeal decided that certain provisions of the Competition Act were unconstitutional. This anomaly is based on the argument that, according to the Constitution, any alleged criminal breaches of law could only be heard by a court of justice. This situation renders the Competition Office a redundant regulator that can do little to protect consumers’ rights.
The government seems to have made a half-hearted attempt in January 2017 to amend the Constitution to assert the authority of the competition watchdog to investigate and sanction abuse. The Opposition, fearing these constitutional changes would dilute the fight for a fair hearing, refused to back the proposals.
Things became more complicated when, last November, a judge ruled that the Competition Office was not empowered to hold its own proceedings to decided whether there was a breach of the law or not. The victims of this sad situation are, of course, ordinary people who depend on their elected representatives in Parliament to ensure they are not exploited.
Malta is a small market where the rules of competition do not always function in the way that economists expect them to do. Businesses in a dominant market position, either because of their size or because of their ability to provide unique essential goods or services, must be kept in check by regulators to ensure they do not resort to profiteering or other abusive practices that damage consumers’ interests. It is up to politicians to legislate in a way that consumers continue to benefit from competition even if they live in a small market.
The government has the primary responsibility to do what it takes to follow the EU primary objective to protect its citizens from abuse of competition laws. If necessary, the Constitution should be changed after proper consultation and discussion with the Opposition.
The business community should also refrain from exploiting any legal anomalies that may exist to perpetuate trade practices that are detrimental to consumers. Businesses that persist in such abusive practices should be named and shamed until the Competition Office is given the effective right to investigate and sanction abuse.
Commitment to EU values entails a steely determination of the executive and legislative arms of the government to act promptly to protect consumers’ rights.
This is a Times of Malta print editorial