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• Malta: Amendments to Competition Rules leading to increased Convergence with Regulation 1/2003The Competition Act (Chapter 379 of the Laws of Malta) in Malta has been amended on different occasions. In particular in 2004, following Malta’s accession to the EU, the individual exemption and negative clearance systems were repealed and a system based on self-assessment was adopted in line with Regulation 1/2003.

In 2011, significant amendments were introduced to the Competition Act with the coming into force of the Malta Competition and Consumer Affairs Authority Act (Chapter 510 of the Laws of Malta ), which established the Malta Competition and Consumer Affairs Authority (MCCAA), the latter amalgamating within it the previous Consumer and Competition Department and the Malta Standards Authority. One of the entities within MCCAA is the Office for Competition which is responsible for the application and enforcement of the Competition Act.

The 2011 amendments were aimed at making the Competition Act more effective in achieving its objective of regulating competition and providing for better functioning markets. Notably, they served to boost the rights and remedies available under Maltese competition law. Some of the amendments introduced also had the effect of aligning the procedures under the Competition Act with Regulation 1/2003. This article focuses on the most significant amendments which led to increased convergence with Regulation 1/2003.

The role of the Director General of the Office for Competition has evolved from a purely investigative role to a role involving both investigative and decision-making powers similar to the powers conferred by Regulation 1/2003 to the European Commission. The decisions of the Director General are subject to appeal on points of law and fact before the Competition and Consumer Appeals Tribunal (CCAT) presided by a judge who sits with two other members in every case, and the decision of the CCAT can be subject to further appeal on points of law to the Court of Appeal.

The Director General has wide investigatory powers under the Competition Act akin to those found under Regulation 1/2003. The Director General can request all necessary information and enter and inspect business and non-business premises. In order to strengthen the procedural safeguards of the undertakings concerned, the 2011 amendments clearly laid down the procedures relating to investigations, providing for more onerous obligations on the Director General and enhancing the right to be heard before the Office. These new provisions are largely based on Regulation 1/2003 and Commission Regulation (EC) No 773/2004. Before taking an infringement decision, the Director General must notify the undertakings concerned with a statement of objections. The amendments also specifically confer the right of access to the file to the undertakings concerned without prejudice to the non-disclosure of information which is deemed to be confidential. Undertakings may also request a separate and individual meeting with the Office to submit their views orally and may, on the initiative of the Director General, also be called to participate in an oral hearing, to which the complainant and third parties may also be invited, so that all those present are given the opportunity to develop their arguments and make counter submissions.

The procedure for the application of interim measures under Article 15 of the Competition Act has been significantly simplified and aligned with Article 8 of Regulation 1/2003 giving the Director General the power to order interim measures in cases of urgency due to the risk of serious and irreparable damage to competition.

Article 12C of the Competition Act is essentially based on Article 9 of Regulation 1/2003 which provides that in those cases where the Director General intends to adopt a decision requiring that an infringement is brought to an end, the undertaking concerned may offer commitments to the Director General to meet his or her concerns.

The 2011 amendments introduced the possibility for the Director General, in the framework

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of cartel investigations, to invite, prior to issuing a statement of objections, some or all of the undertakings concerned to indicate in writing whether they are willing to engage in settlement discussions with a view to introducing settlement submissions. The relevant article was modelled on Commission Regulation 662/2008 of 30 June 2008 amending Regulation (EC) No 773/2004 as regards the conduct of settlement procedures in cartel cases.

Following the 2011 amendments, the Competition Act, along the same lines as Article 17 of Regulation 1/2003, enables the Director General to carry out inquiries into any particular sector of the economy or into any particular type of agreements across various sectors where the trend of trade, the rigidity of prices or other circumstances suggest that competition may be restricted or distorted within the market in Malta. This is complemented by a provision in the Malta Competition and Consumer Affairs Authority Act enabling the Office to keep under review markets and commercial activities relating to the supply of goods and services and to collect information and evidence for the purpose of ascertaining whether such markets and activities may adversely affect the interests of consumers and to study markets and recommend action where required.

Prior to the amendments, infringements of the Competition Act were punishable as criminal offences. Following the 2011 amendments, criminal liability for infringements of the substantive rules and for breaches relating to the supply of information has been replaced by the possibility to impose administrative fines, as is the case under Regulation 1/2003. A prescription period for the imposition of administrative fines has also been introduced.

The amendments have also enhanced the position of complainants. In the current system, the complainant is entitled to be informed of the preliminary view of the Director General where he or she considers that the complaint should be rejected, thus giving the complainant the chance to be heard before the Director General issues a decision. The complainant has a right to appeal the decision of the Director General to reject the complaint to the CCAT. The rights of the complainant have also been improved with respect to hearings. In the course of an investigation, a complainant is entitled to a non confidential version of the statement of objections, provided that there is no settlement procedure in progress. The complainant may make written observations on the statement of objections and may also be given the opportunity to develop arguments orally if it has so requested in the written submissions.

The abovementioned amendments which are of a procedural nature, have strengthened the role of the Office for Competition, increased the deterrent effect of the law and enhanced the rights of the parties involved in the proceedings. The increased alignment of the Competition Act to Regulation 1/2003 puts the Office in a better position to refer to the judgments of the Court of Justice of the European Union and to decisions and interpretative notices of the European Commission on the application of the relevant procedural provisions.