News & Events
On The Competition Amendment Act Of 2017
Tuesday 04th September 2018
Cartel enforcement appeals and damages actions in the Maltese islands are being overhauled, and recent case law has been the trigger that necessitated this change. Notable amongst these is the judgment of Federation of Estate Agents v Director General (Competition) et, delivered by the Constitutional Court on 3rd May 2016. The Court objected to the current procedure of imposing fines to commercial entities found to be in breach of competition law as going against the Constitution’s fair hearing provisions.
Another relevant judgment is Hompesch Station Limited v Enemalta Corporation et, decided by the Civil Court, First Hall on 23rd November 2015. The case concerned an action for damages by the plaintiff against the GRTU (General Retailers and Traders Union) and Enemalta Corporation, that reached an agreement found to be anti-competitive. There again, the judgment Office for Competition vs Enemalta Corporation et, decided by the Consumer Appeals Tribunal on the 4th October 2016 delved into the issue of a cartel involving the various liquid petroleum gas (LPG) distributors, between the GRTU and Enemalta plc that divided the Maltese Islands into various ‘territories’. This was found to be in breach of Article 5(1) of the Competition Act (Chapter 379 of the Laws of Malta) and Article 101(1) TFEU (Treaty on the Functioning of the European Union).
The Federation of Estate Agents sentence created a stalemate for the Office for Competition in that it was divested of the authority to impose fines for breaches to competition law. The government’s initial reaction was to consider amendments to Article 39 of the Constitution. However, this did not elicit the support of the Opposition, which is indispensable for an amendment of the sort. The argument of the Nationalist Party was that altering the provision of a right to a fair hearing could lead to the possibility of having tribunals rather than courts deciding criminal cases. The government reiterated that the decision had been based on a recommendation of the Attorney General.
The underlying principle is to extend the competence of the Civil Court (Commercial Section) to incorporate issues that were covered by the Competition and Consumer Appeals Tribunal. As things stand, the Civil Court is handling matters arising out of the Companies Act. With the proposed extended competence, all issues arising from the Competition Act, the Consumer Affairs Act, the Malta Competition and Consumer Affairs Authority Act, and any subsidiary legislation therefrom, are to be included. A commercial person or entity will be able to file a sworn application before the Civil Court seeking review of points both of law and of fact in relation to an infringement decision; cease and desist or compliance order; interim measure; administrative fine and/or daily penalty payment, or daily administrative fine issued by the Director General (Competition) falling under the realm of the Competition Act or issued by the Director General (Consumer Affairs) falling under the realm of the Consumer Affairs Act. An appeal from the Competition and Consumer Appeals Tribunal was only permitted if the matter under review was on a point of law.
As proposed, both points of law and of fact will be subject to appeal by an aggrieved party that files an application within twenty days from the appealed judgment in the registry of the Court of Appeal. Filing a sworn application before the Civil Court (Commercial Section) shall have a suspensory effect on any administrative fine the Director General may have imposed on the aggrieved until the issue under review is finalised. The right of a commercial person or entity against self-incrimination is to be explicitly provided for by the forthcoming amendments. Thus, although commercial persons or entities were already protected from self-incrimination in relation to investigations by the Office for Competition, particularly in light of the European Union case-law, this will help eliminate ambiguity.
The proposed solution to the Federation of Estate Agents impasse seems sturdier than that which was offered by the Attorney General and actually it seems out of place that he would suggest a quick-fix solution that involves compromising the Constitution itself. As a matter of fact, Article 39 of the Constitution is entrenched meaning it requires a two-thirds majority of the House of Representatives in order to get the necessary approval, which was out of question ab initio.
|JAMES CAMILLERILegal Officer, PKF Malta|
|James Camilleri is a Legal Officer at PKF Malta|