MCCAA - upgrading the path to fair competition

A healthy market is one where competition thrives, innovation flourishes and consumers benefit from greater choice and better prices. A new guidebook on influencer marketing and consumer rights, was drawn up by MCCAA to promote transparency in digital advertising and ensure that sponsored content is clearly identifiable by consumers. Its decisions may be subject to judicial review or appeal before Malta’s courts, so the process often involves legal challenges. Sanctions typically include fines proportionate to turnover and the gravity and duration of the breach, behavioural or structural remedies, corrective measures for consumers, and the acceptance of compliance programmes or leniency in cartel cases.

The Digital Investigations Unit within the Office for Consumer Affairs actively supports this initiative by monitoring influencers’ posts both before and after the publication of the guidelines, assessing levels of compliance and identifying misleading practices such as undisclosed advertising. The Office conducted informal investigations across various sectors of the economy, including communications, food and retail, transport, insurance, health, and pharmaceuticals. In 2024, the competition watchdog blocked Lidl’s planned purchase of a Scotts supermarket in Żabbar, warning that this would result in the German supermarket giant becoming too dominant in Malta’s southern area. The purchase by Lidl of the existing Scotts supermarket would have allowed Lidl to strengthen its position in the grocery retail market within a 15-minute drive radius, thereby limiting market competition in the area. 

The Office of Competition completed a comprehensive analysis to classify grocery stores with a sales area of 200 square meters or more, based on their ability to impose competitive constraints in the market. This evaluation considered price, range, service, and quality, and determined that 53 out of 87 stores met the competitive criteria in at least two of these categories, thus classifying them within the relevant product market.

Under current rules, MCCAA must be notified of a potential market concentration if the companies merging have a combined turnover of over €2.3 million, with each of them registering a turnover of at least 10% of that figure locally. This threshold would rise to €4.5 million, with a local turnover of at least €800,000. What are the advantages for commerce when MCCAA is bestowed with new “call-in” powers, allowing it to request information on planned mergers that fall below this threshold but may nonetheless distort competition in a sector. One typical service proposed by MCCAA is the maximum fine of €50,000 for providing false or misleading information or 1% of the firm’s global turnover, while a firm can be fined up to 10% of its total turnover if it fails to notify the regulator of a concentration, including mergers, acquisitions and full-function joint ventures, to ensure compliance with competition laws and maintain fair market dynamics.

Notably, MCCAA achieved a significant milestone by issuing its first ever prohibition of a concentration. Hereunder, are examples of cases given consideration by MCCAA.

To start with let us discuss a cartel in public procurement where several construction firms repeatedly submitted pre‑arranged bids for local procurement contracts. Meetings between competitors allocated tenders and produced “cover” bids to make outcomes appear competitive. A complainant alerted the Authority, prompting dawn raids.

Another example is price-fixing and bid-rigging. The Authority identified infringements, imposed administrative fines based on turnover and duration, and granted leniency to applicants in exchange for immunity or reduced fines. Firms were ordered to cease cartel conduct and implement compliance programs.

A second classification involves abuse of dominance in telecoms, where a large incumbent telecom operator supplied wholesale access to rival retail providers but set wholesale prices and conditions that made it impossible for rivals to compete profitably (inducing a margin squeeze). Rival telecom operators, resorted to a complaint with the Authority complaining that access was slow and discriminatory.

The next instance is that concerning abuse of a dominant position by exclusionary pricing/conditions and discriminatory treatment. The Authority decided to impose a fine for past conduct; the operator is required to report compliance and may be subject to monitoring for a set period.

The fourth example is Consumer‑protection generated by misleading online promotions. An online retailer ran a “50% off” campaign using a “was/now” price comparison where the “was” price had been briefly used only to create the impression of a discount. Post‑sale terms (returns/refunds) were not clearly disclosed. Multiple consumer complaints triggered an investigation. These acts constituted, misleading advertising and unfair commercial practices under consumer protection powers. In its decision, the Authority orders withdrawal of such misleading ads, requires corrective advertising and refunds/compensation for affected consumers, and imposes an administrative penalty. The lesson to be learned here, is that advertised discounts on products are genuine and substantiated by prior pricing history; by making all fees and return policies prominent and clear; parties must retain records evidencing pricing and promotion mechanics.

The interesting case is that of vertical constraints in pharmaceutical distribution. This case involves a national wholesaler which imposed contractual clauses on pharmacies, restricting their ability to source from alternative suppliers and fixed recommended resale prices. Smaller pharmacies complained of restricted supply and reduced ability to compete. Such vertical restraints (resale price maintenance, restriction of passive/active sales and supply restrictions), may restrict competition downstream. In such cases, the Authority finds the vertical restraints to be anti‑competitive and orders their removal; imposes fines for RPM; requires contract amendments and compliance reporting.

The perfect solution is to avoid resale price maintenance and unjustified exclusive or restriction clauses, thus ensuring distribution agreements allow downstream freedom to source and set resale prices unless objective justifications exist and are proportionate.

A final case involves price signalling among fuel retailers. Here, one notices how local fuel retailers exchanged future pricing intentions at trade‑association meetings and via intermediaries; prices on forecourts moved in parallel shortly after such exchanges. In such cases, the Authority concludes there was collusion/coordination, issues fines and requires participants to cease meetings involving pricing discussions, adopt competition‑compliance measures and report compliance. In some cases, it ordered corrective communications to consumers or monitoring.

In conclusion, the MCCAA is entering a renaissance period with enhanced surveillance powers and stronger enforcement tools, including dawn raids, information requests, sector inquiries, and follow-up monitoring of remedies. According to Times of Malta, lawyer Clement Mifsud-Bonnici described the proposed amendments as “welcome and long-awaited,” noting that the law had remained virtually unchanged since 2007. These reforms are expected to deliver stronger consumer protection in 2026.