Competition Act saga: Draft law ‘does not serve its purpose’
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Competition Act saga: Draft law ‘does not serve its purpose’

Warning by the Consumers' Associaton

Rather than help the competition watchdog to get its teeth back after three years in limbo, a recently-tabled draft law would only serve to make it ineffective, the consumers’ association warned.

The long-term solution should be to amend the Constitution so that public authorities could take remedial action while safeguarding the right to a fair hearing of anyone allegedly committing a breach, it said.

The association was commenting in a statement following the latest development in the Competition Office saga, which has been dragging on since May 2016. Then, a Court of Appeal had upheld a previous judgment ruling that certain provisions of the Competition Act were unconstitutional.

The case had been instituted by the Federation of Estate Agents, which had felt aggrieved by the decision of the Director for Competition to proceed against it over alleged breaches of the law. The federation argued that only a proper court could deliver a decision on the matter given that, in case of ‘guilt’, it could be fined up to €1.25 million.

Watchdog would resort to the courts in all cases

Subsequently, the director of competition within the Malta Competition and Consumer Affairs Authority refrained from imposing fines.

On its part, the government had initially tried to make amends by changing the Constitution but the Opposition would not play ball. Subsequently, it opted to change the Competition Act and the Bill outlining the proposed changes was only published last month and is due to be debated by Parliament at Second Reading stage in the coming weeks.

In its reaction, the association said the long-term solution would be to enforce decisions made by the competition watchdog only after the expiration of the period whereby the ‘guilty’ party could seek redress in court. Such arrangement would allow the regulator to take the action it deemed necessary while safeguarding the right of the individual or commercial entity to appeal before a court.

While acknowledging that such changes would require the Opposition’s support as they would need the backing of two thirds of MPs, the association noted that failure to do so would result in all issues related to competition and consumer law ending up in court straightaway.

In turn, this would cause more delays for action, to the detriment of consumers and commercial entities negatively affected by the issue.

This would render the competition and consumer affairs watchdog powerless and ineffective in fulfilling its duties to defend consumers’ and businesses’ rights.

The association also took issue to the fact that the amendments “differ substantially” from the proposals that had been issued for public consultation last summer.

The most important change was that the watchdog would resort to the courts in all cases regardless of the seriousness of the alleged breach, the association noted.

It expressed disappointment that its proposal to increase fines had not been taken on board by the government.

During the public consultation, the association had criticised the introduction of a new clause under which the regulator would have to wait for the legal representative of the business under investigation to be on site prior to conducting an inspection.

Such provision might render data seized by the Competition Office useless because it would have no power to stop the business from tampering or removing any incriminating evidence, the association said.

It also warned that the proposed changes could serve as a precedent for other public authorities to have to go to court to impose sanctions.

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