Changes to M&A laws expected over coming months By David Lindsay
Competitiveness and Communications Minister Censu Galea expects changes to Malta's merger and acquisition laws to take place over the coming months as part and parcel of government's updating of the country's competition laws. Mr Galea was speaking at Monday's EuroMed seminar on competition policy. Extolling the benefits of effective competition law for traders and consumer alike, Mr Galea explains, “As Minister for Competitiveness, I certainly agree that genuine competition is the most effective way to induce companies to keep costs low, to be efficient and to innovate and hence to offer customers a good deal, the best product or service at the best price. The beneficiaries of effective competition are the traders themselves and the consumers.” He adds that competition law also promotes efficiency enhancing economic behaviour, “Competition law promotes certain behaviour on the market which is beneficial in terms of economic efficiency and which is beneficial for the consumer. This includes for instance, co-operation agreements between competitors on research and development. Moreover, I stress that competition law does not put any constraints on efficient undertakings which strive to maintain or increase their market share through legitimate strategies, such as by offering high quality or a better after-sales service or fair prices. “I believe that Competition law has added legal certainty in the market place because it defines the parameters within which firms may lawfully conduct their business.” Speaking about the work carried out by the Consumer and Competition division in the past year, Minister Galea said that 12 decisions were delivered by the Office which included those concerning restrictive practices cases, negative clearances and clearance of concentrations. “As a matter of fact, this Directorate was involved in investigations concerning anti-trust cases, concentrations (better known as mergers or acquisitions) notifications and consumer law infringement cases,” he explains. “This office also investigated a considerable number of cases which involved lengthy analysis both from the legal as well as the economic aspect. These investigations involved the tourism sector, maritime sector, supermarkets sector, the telecoms sector, and the beverage industry amongst others. A cease and desist order was issued in respect of a number of supermarkets, ordering them to desist from what was considered to be a restrictive practice by the Office.” On the Office's dealings with concentrations, Mr Galea explains how it had dealt with eight notifications concerning concentrations. One concerned a conglomerate merger by acquisition in the business solution market, while the other seven related to acquisitions in various sectors including the construction industry, food and beverages industry, and investment services. The Office has cleared all eight cases. Four cases were, meanwhile, referred to the Commission for Fair Trading over the past year. The first had involved an alleged restrictive practice in the maritime sector, two others involved an appeal against the Office's decision in the tourism and supermarket sectors, while a request for an interim measure in the telecoms sector was also submitted to the Commission and has been referred to the Office for its submissions. As far as complaints related to consumer law infringements, the Office dealt with 16 cases which concerned, for the most part, misleading advertising issues - two of which were considered inadmissible through lack of jurisdiction. The EuroMed seminar brought together representatives from Israel, the Palestinian Authority, Turkey and Malta as a former Mediterranean Partner and focused on furthering and updating the knowledge of those responsible of the current competition legislative framework. Speaking about the role of the Mediterranean region in the world Mr Galea reminded delegates how this year is the tenth anniversary of the establishment of the EuroMed partnership, when foreign Ministers of the EU and their colleagues of the Euro-Mediterranean partnership agreed to establish a new Mediterranean area of peace, stability and prosperity. As such, the seminar provided a new step in the development of the EuroMed Market Programme, aiming at deepening the knowledge and furthering the integration at sub-regional level of some of the areas covered by the EuroMed Programme. “I therefore believe that given the Mediterranean's enormous potential and its importance in international relations, encourages Malta even more to continue implementing the necessary strategies to enhance its competitiveness and to contribute further in the stability and prosperity of the Mediterranean. “With this in mind, sound competition policy is essential for this region to do business effectively where we must ensure that each competitor is competing on a level playing field in an environment which encourages entrepreneurship while safeguarding the basic rights of the consumer,” Mr Galea adds.