The Office for Competition within the Malta Competition and Consumer Affairs Authority has set out how its work supports open, fair and competitive markets in Malta, with a focus on merger control, antitrust enforcement, sector enquiries and advocacy.
In a recent interview, Dr Melchior Vella, Director General of the Office for Competition, said the Office’s work affects both consumers and businesses, even when competition law may appear technical or remote from everyday life.
“Our mandate is there to safeguard competition, to ensure that our markets remain open, fair and ultimately competitive,” Vella said.
He said the impact of competition can be seen in ordinary purchasing decisions, including the price people pay, the range of products available and the quality of service they receive.
“We are not there to micromanage businesses,” he said. “We are there to ensure that competition is there and that we safeguard that competition. We only come in when we see that there is a risk to competition.”
Malta’s competition landscape explained – YouTube
Four areas of work
Vella said the Office’s work is built around four core areas set out in law.
The first is merger control. Where companies join forces, and the transaction meets the applicable turnover threshold, the Office assesses, on an ex ante and forward-looking basis, whether the concentration could lead to a substantial lessening of competition.
The second area is antitrust enforcement. Vella said this may involve situations where firms do not compete as they should.
“You can have two firms that, instead of competing, are fixing prices or sharing markets,” he said. “You can also have a dominant firm that abuses its position.”
The third area is sector enquiries, where the Office examines a whole sector or particular market. These enquiries do not necessarily begin from a suspected
infringement, but may look at broader competition concerns such as inefficiencies, structural issues or barriers to entry.
“We study the markets, and we determine whether there are structural issues or barriers to entry, and we come up with a number of policy recommendations,” Vella said.
The fourth area is advocacy. The Office advises public authorities on competition matters and carries out outreach initiatives to help the public and businesses better understand competition law.
Supporting businesses as well as consumers
Vella said competition law is often associated with consumer protection, but its role in supporting businesses is just as important.
“Competition law is there to safeguard businesses as well, to encourage businesses to invest,” he said. “It gives them certainty, so that their investments can reap the benefits of that investment and ultimately they can compete on the merits.”
He said competition gives undertakings the opportunity to enter markets, expand and grow, and is associated with better economic outcomes.
This is particularly important in a small economy such as Malta, where market structure can make the effects of mergers or abuse of dominance more significant.
“When you have a small economy, you tend to find that there is a higher level of concentration and fewer players,” Vella said. “Whenever there is a proposed transaction, or a company abuses its position, the effect is likely to be much more substantial.”
He added that competition helps maintain a level playing field between market players and supports Malta’s ability to compete internationally.
Market power and enforcement priorities
During the interview, Dr Melchior Vella told SiGMA News that holding a strong market position is not unlawful in itself. The concern arises when conduct by a dominant undertaking harms competition.
Possessing strong market power is not, in itself, unlawful, he said. However, the Office may intervene where that market power is abused through anti-competitive conduct.
He cited predatory pricing as one example, where a dominant firm deliberately “sets a price below its cost with the intention to shut other firms out of the market”. Other possible concerns include excessive pricing, discriminatory pricing and certain vertical agreements, such as resale price maintenance.
Looking ahead, Vella said the Office will continue to handle antitrust and merger cases in a timely, efficient and transparent manner.
He said the Office is also working with the European Commission and European peers to strengthen its capabilities in data analysis and digital markets, an area he described as important, “especially when you have such a dynamic market”.
The Office will also continue outreach with stakeholders and businesses to encourage compliance and improve understanding of competition law.
