Huge changes are coming to Malta’s competition laws which are set to give the authorities more powers than ever to weed out cartels.
Under the terms of the EU’s ECN+ directive, the Competition Office will be empowered to offer immunity and reduced penalties in return for information on cartels or other infringements of competition law.
Fines for companies found in breach of competition rules will also be increased to a maximum of 10% of its global turnover, up from the current 10% of its Malta-generated turnover.
Due to a 2015 constitutional judgment, following a complaint by the Federation of Estate Agents, the Competition Office won’t be able to issue any fines itself but will have to refer potential breaches to the courts.
Resources at the competition office will also be increased, and its officers will be allowed to conduct unannounced inspections to sniff out cartels – both at company premises and at the personal homes of current and former staff and management.
Their power to access technological devices to seize evidence of competition infringements will be extended to external servers and cloud services.
And the Competition Office itself will be granted financial autonomy to spend its budget as it sees fit, without any interference from the central government.
The EU issued this directive with the intention of ensuring minimum standards with regards to the enforcement of competition law among member states.
Competition lawyer Gayle Kimberley said the culture change it will require among Maltese businesses will be similar to the one which followed the implementation of GDPR data protection rules.
Writing in a report published by consultancy firm SEED last January, Kimberley warned that businesses will have to realise that discussions on prices and business plans with a competitor, even if informally at a trade fair, can well be seen as an anti-competitive practice.
“It is important to note that any discussion amongst these salespeople of prices or business plans, for example, no matter how well-intended, could land the company in trouble,” she said.
Exclusivity arrangements, joint selling, sharing sensitive information, and resale restrictions could be problematic too.
Despite the cultural changes it will entail, this new law has completely slipped under the radar in Malta, with only a single person issuing feedback as part of a public consultation process launched by the government last October.
It was supposed to be transposed into Maltese law last February but the process has been delayed.