Lady in red
Malta is not a case study in competition – head of Commercial Law Department
Malta is not a case study in competition, but in limited competition, University of Malta Department of Commercial Law head and Malta Law Academy advisory board member David Fabri told The Malta Independent.
This newsroom was spoke to David Fabri about consumer law and the state of Malta in terms of competition.
The issue of monopolies was recently raised by Partit Demokratiku (PD) leader Anthony Buttigieg, who wrote to the European Commissioner for Competition Margrethe Vestager asking her to investigate “the almost absolute monopoly over fuel supplies that Enemed holds in Malta, and the detrimental effects this may have on fuel prices and consumers on the island.” PD MP Godfrey Farrugia had also questioned the freedom of Malta’s fuel market, highlighting that wherever one goes, fuel prices are the same.
Fabri was asked about the overall situation in Malta. “Malta is not a case study in competition, but is a study in very limited competition in banking, in petroleum products… there is no major competition. It is typical for small islands – not healthy, but typical. Middlesea Insurance used to, for example, control around 80% of the insurance market. It is not unusual for small countries – I’m not saying it’s good. Who will, for example, come to compete against Enemed here?”
“Obviously this has its downsides. Anybody who has a monopoly can be careless with their customers. We saw that with Enemalta, with Maltacom, with everyone who had a monopoly and bullied and disregarded their customers. That is the whole rationale behind having many competitors on the market, to have the ability to choose, where if you don’t like one, you can go to the other, and they will have an interest in providing a better product and in speaking with you politely over the phone.”
This newsroom asked about the size restrictions in Malta resulting in certain monopolistic situations due to there being no other option.
He said that in Malta factual circumstances militate against the presence of many competitors. “It is not even feasible; how can you divide the Malta-Gozo transport system between many operators?”
“We cannot blame everyone because there is no competition, but we just have to make sure that whoever is in a monopolistic situation gives as good a deal as if they were in competition. Unfortunately, it doesn’t happen like that as the authorities seem to be asleep.”
Asked how one does that when, for example, there is one public bus service operator around the island, he said: “If there is no competition, you need strong regulation through regulators to ensure monopolies do not abuse of their dominant position.”
“Regulation applies until competition arrives. Strong regulation is a whole skill, not just setting a few clerks and political appointees and pretending they are regulators. It’s a question of being autonomous, of being competent, of being brave, of being trained, of being articulate, showing leadership, showing business that the regulator is the boss. The regulators here in Malta are always reacting, sometimes too mildly.”
Asked how one can ensure that regulators in Malta are strong, he said that by now Malta should know what is a good and strong regulator and so on. “We just have to put everything we learnt into practice. It is a question of knowing what one is there for. If regulation is just a job for regulators, then there will be problems.”
“One must have brave regulators, not ones who always look at the minister to see if he or she is happy; ones who distance themselves from ministers, not ones who seek to create any excuse to be seen with the minister, with every press conference having the minister sitting in the middle. That sends the wrong signal. This has been happening for years and is not something recent. Instead of showing autonomy, they wish to show the opposite – that they are close to the minister.”
“Even the quality of ministers... there were ones who were interested in consumer protection and others who knew nothing about the subject and were not interested. That is a factor that has affected the development of consumer law. Some were interested in consumer protection and did something about it and others gave it a low priority.”
David Fabri will be chairing this year’s Consumer Law Conference, which will be held on the 15 March at the Chamber of Advocates Hall, between 2pm and 5.30pm. The conference will include a number of academics and professionals as speakers, including Godfrey Baldacchino, Pro-Rector and Professor of Sociology at the University of Malta, Dr David Zammit, Head of the Department of Civil Law whose talk will be titled ‘Compensating for Moral Damage in Civil and Consumer Law: a Case of Convergent Evolution?’, and Lawrence Zammit, economist and chairman of MISCO, who will give an economist’s perspective on consumer protection, and others. Registrations are open at €30, and €20 for students. To register, call 2124 8601, 7720 8601 or e-mail events@avukati.org.