SME Chamber

Il-GRTU tkompli tippressa mall-Kummissjoni Ewropeja dwar l-Ufficju tal-Kompetizzjoni Gusta ta’ Malta

Il-GRTU – L-Kamra Maltija tan-Negozji Zghar u Medji ma accettatx l-pozizzjoni li hadet l-Kummissjoni Ewropeja dwar l-kas li l-GRTU resqet quddiemha dwar l-Ufficcju tal-Kompetizzjoni Gusta ta’ Malta. Il-GRTU tablet lill-Commissioner Ms Nellie Kroes responsabbli mill-Kompetizzjoni biex tizgura lil l-gvern Malti josserva ahjar ir-regolamenti tal-EU dwar il-harsien tal-kompetizzjoni gusta f’pajjizna

Il-GRTU – L-Kamra Maltija tan-Negozji Zghar u Medji ma accettatx l-pozizzjoni li hadet l-Kummissjoni Ewropeja dwar l-kas li l-GRTU resqet quddiemha dwar l-Ufficcju tal-Kompetizzjoni Gusta ta’ Malta. Il-GRTU tablet lill-Commissioner Ms Nellie Kroes responsabbli mill-Kompetizzjoni biex tizgura lil l-gvern Malti josserva ahjar ir-regolamenti tal-EU dwar il-harsien tal-kompetizzjoni gusta f’pajjizna

Il-GRTU issostni li l-Ufficcju tal-Kompetizzjoni ta’ Malta mhux jahdem sewwa u huwa ta’ detriment ghan-negozji zghar u medji Maltin u Ghawdxin. Il-GRTU trid li dan l-Ufficcju jinqata mill-burokrazija generali tal-gvern u jkun, fil-fatt, u jidher li hu, indipendenti mill-gvern tal-gurnata. Il-GRTU trid ukoll li tinstab persuna adatta biex tmexxi dan l-Ufficcju u li fl-analizi tax-xoghol li jwettaq jinghata aktar enfazi lejn il-problemi ta’ kompetizjoni fis-suq. Mir-rapporti li ghandha l-GRTU jidher li hafna negozji zghar qed ibghatu b’effett ta’ kompetizzjoni ingusta u l-Ufficcju tal-Kompetizzjoni Gusta mhux qed jiehu l-passi li jista’ jiehu biex l-kompetizzjoni fis-suq lokali tkun gusta u sostnuta.

It-text tal-ittra tal-GRTU lill-Kummissjoni Ewropeja qed tintbghat ma din l-istqarrija flimkien mall-korrespondenza li ghaddiet bejn iz-zewg nahat:

7th March 2006
Commissioner Nellie Kroes
DG Competition
European Commission
B-1049 Brussels

Attn: Mr Philip Lowe

Dear Mr Lowe,

Re: Office for Fair Competition (Malta)

We thank you for your letter dated 26 January 2006 (D000388) relating to our concerns about the autonomy of Office for Fair Competition in Malta.

As you rightly pointed out, we acknowledge that it is up to the Member States to organize their administrative systems in their country and this obviously applies to Malta too. GRTU also recognises that as from the 1 May 2004, with the coming into force of Regulation 1/2003, the national competition authorities are part of a European Competition Network enforcing the provisions of Article 81 and 82 EC and the Commission’s modified role within that network.

However, GRTU’s concerns relate to the operational autonomy of the Malta’s Office for Fair Competition (OFC) as it affects its executive effectiveness and not its administrative autonomy. While its role and functions are essentially more critical to the national economy than those of other economic regulators, such as that of the Malta Resources Authority (for, inter alia, energy) and the Malta Communications Authority (for telecommunications), the latter regulators are operationally autonomous as required by sector specific EU law, while the OFC is not.

Currently there is what we consider a serious anomalous situation, where the Permanent Secretary of the Ministry for Competitiveness and Telecommunications is still acting as Director General Competition and Consumer Division (including OFC) after he was promoted more than five months ago leaving a vacant position which has not been filled to date. Since Government itself is still an economic operator with 100% or majority share holdings in a number of corporations, we maintain that it is even more essential that the OFC is separated from Government’s operative divisions.

The lack of autonomy affects the operations of the OFC in more than one way. Malta is a small country and we are noting that the possibility of capture, including political, is not a
remote possibility but a real and tangible risk. Moreover, the personnel employed by the OFC, including those in the most senior decision-making positions, are civil servants with civil service salaries due to their forming part of same public service. Since these are significantly less than those of the other regulatory authorities and the entities they regulate, they affect the recruitment potential of the OFC and its attractiveness for qualified personnel, leaving it under-resourced of the required expertise. The OFC is also the only economic regulator in Malta who does not employ the services of qualified economists on its investigative teams despite the increased importance given to economic efficiency tests in EC competition rules. In our view this situation is further compounded by the lack of transparent guidelines on the OFC’s application of competition rules. All of these factors dampen both the thrust and the effectiveness of the OFC’s enforcement of competition rules in Malta and are of great concern to us and the SME population in Malta.

GRTU is also aware of instances where the Competition Commission (Malta) itself has criticised the conduct of the OFC; such as when the latter suspended their legitimate investigation of a dominant company because the latter complained. We also note that a number of OFC decisions are appealed which has dented the credibility of this Office with the business and customer communities in Malta.

Therefore, while GRTU respects “the wide variation which exists in the public enforcement systems of the Member States”, and the Member States’ legitimate right to decide ‘which’ authority they entrust with applying Articles 81 and 82 of the EC Treaty, we maintain that the EC Commission still has a duty to ensure that these Treaty provisions are operated and applied effectively and correctly, irrespective of ‘which authority’. In this regard, the GRTU is kindly requesting your guidance and possible intervention in ensuring that the OFC in Malta is sufficiently and adequately resourced and detached in order to fulfil its role in Malta and the EU as required by Regulation 1/2003.

Yours sincerely,

Vincent Farrugia
Director General

21st December 2005

Ms Joanne Drake
Head of Representation
EC Delegation
Villa The Vines
Ta’ Xbiex Seafront
Ta’ Xbiex

Dear Dr Drake,

Malta Office for Fair Competition

On behalf of the National Executive Council we request you to forward the following official complaint to the EU Commissioner for Competition, Ms Neelie Kroes.

Notwithstanding promises made to the representatives of the commercial and industrial sectors: GRTU Malta Chamber of SME’s – National Association of General Retailers and Traders; Malta Chamber of Commerce and Enterprise and Malta Federation of Industry, that the Malta Office for Fair Competition will no longer form part of the general public service structure but be established as a semi-autonomous Public Regulatory Office not falling under the direct responsibility of the Permanent Secretary of any government Ministry, the Government of Malta continues not to implement this commitment and retains the Office for Fair Competition as an integrated part of the civil service.

This situation has now further deteriorated as the previous Head of the Office for Fair Competition has recently been promoted to the post of Permanent Secretary of the Ministry responsible for Competitiveness, and the Permanent Secretary himself is today effectively the Head of the Office for Fair Competition as no Head of OFC has been specifically appointed.

GRTU, on behalf of Maltese Traders and Retailers, furthermore complains, as has been done regularly, against the present structure whereby the Office for Fair Competition rather than retained as a separate entity with specific responsibility for Competition, merger and anti-trust rules, is retained as a sub- section of the Division for Competition and Consumer Affairs within the Ministry for Competitiveness.

The effective result of this merged Civil Service structure has been that the Office for Fair Competition has lost its significance and its independent and autonomous authority.

GRTU is hereby officially requesting the Commissioner to investigate with urgency this situation as it is detrimental to the vast majority of our members who are independent private businesses heavily reliant on a competitive market under the guidance of a neutral and independent Office for Fair Competition.

GRTU furthermore, on behalf of Maltese Traders, Wholesalers and Retailers, request the Commissioner to issue directives to the Maltese government to take immediate remedial action to establish the Office for Fair Competition as an independent autonomous public regulatory authority with responsibility only for the monitoring and implementation of EU Competition, merger and anti-trust rules.

Kindly give this matter your most urgent attention.

Yours sincerely,

Vincent Farrugia
Director General

c.c – Xavier R. Durieu, Secretary General EuroCommerce

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