Long-awaited changes to the competition law meant to restore the watchdog’s teeth fall short of expectations amid concerns they will result in long-drawn out court proceedings even in minor cases.
The criticism was made by the Consumers’ Association and an expert in competition law when the Times of Malta sought their views on the amendments approved by Parliament at the end of last month.
The changes had been in the pipeline for three years, following two landmark judgments involving the Federation of Estate Agents against the director for competition in 2016 and a recent decision in the case the Nationalist Party instituted against the Electoral Commission.
In both cases, the Constitutional Court concluded that the imposition of fines was a matter of criminal nature and, consequently, could only be handed down by a proper court.
Over the past three years, the Office for Competition within the Malta Competition and Consumer Affairs Authority could not impose any fine, thus becoming effectively toothless.
In its reaction, the Consumers’ Association said its main worry would be that practically all cases would have to go to court, regardless of whether to have a fine imposed or an order to stop a malpractice.
The Constitutional Court concluded that the imposition of fines was a matter of criminal nature
“The main effect is that whereas previously we used to wait months if not years to get a decision from MCCAA [through its respective DGs], now we have to wait much longer to get the decision, since these DGs need to institute proceedings before the court, defend their case and then wait for a judgment, which, incidentally, is subject to appeal before the Court of Appeal,” it noted.
It remarked that this model did not bode well for effective regulatory intervention whether for consumers or businesses.
“The effects of malpractice - for example, misleading advertising - are felt immediately and having a decision prohibiting such a practice years later doesn’t make sense,” the association commented.
It pointed out that, apart from Austria, whose model was like Malta, EU countries had a much more practical way to come to a decision while still fully respecting fundamental human rights.
“The legislator should have tried to find a better balance between, on the one hand, the public’s interest, notably that of consumers in general, to curb in good time malpractices – some of which can be pretty serious - and, on the other hand, the protection of the rights of the person under investigation,” it said.
“The law as amended fails to achieve such a balance and, in our opinion, actually aggravates matters insofar as the protection of consumer rights is concerned,” it added.
A competition lawyer, who preferred to remain anonymous, said the amendments did not provide for any measures impacting the powers of entities like the Electoral Commission. Consequently, he expressed concern that other lawsuits would be made to contest the powers enjoyed by other public authorities to impose fines.
“The government should have considered addressing matters in a holistic manner. However, for reasons which have not been explained, this was not done,” he said.
Furthermore, the lawyer pointed out that one of the points made by the Constitutional Court in determining that ‘administrative fines’ were of a criminal nature was the substantial amount of the fines.
“Yet under the new procedure, all cases, irrespective of the quantum of the fine, must be referred to court,” he noted.
The changes appeared to have gone beyond what was required by the Constitutional Court in the Federation of Estate Agents’ judgment, the lawyer pointed out.
The director for competition was forthwith required to apply to court, not only for the imposition of a fine in case of a breach of competition law but also to issue compliance orders, he said.