This article has been written by Dr Annalies Muscat and Dr Laura Spiteri
On 22 April 2020, the Malta Competition and Consumer Affairs Authority (the “MCCAA”) published a consultation regarding a Bill to amend the Consumer Affairs Act (Chapter 378 of the laws of Malta and hereinafter referred to as the “Act”) and other Laws, and to make ancillary and consequential provisions thereto (the “Bill”) in the light of Regulation 2017/2394 on cooperation between national authorities responsible for the enforcement of consumer protection laws (the “Regulation”).
The salient amendments being proposed in the Bill are the following:
- i. Introduction of a Commitments Procedure
A commitments procedure is being proposed in article 12A of the Consumer Affairs Act, in the light of what is provided for in article 9(4) of the Regulation. The Director General (Consumer Affairs) (the “Director General”) is being given the power to, at any stage of the investigation conducted by him or at any stage of the judicial proceedings instituted by him, obtain or accept commitments from the trader concerned to cease the alleged infringement. The Director General may also accept the trader’s additional remedial commitments for the benefit of consumers that may have been affected by the alleged infringement. Commitments are to be entered into by a joint demand made by the Director General and the trader that is considered to have committed the alleged misconduct. The commitments procedure will bring about the termination of the investigation or the judicial proceedings, as the case may be, against the imposition of a penalty on the trader by the Civil Court.
The proposed consultation procedure imposes on the trader the drawing up of a voluntary statement containing certain information, inter alia:
- -an admission that the trader committed the infringement,
- -a declaration that the trader accepts the maximum penalty requested by the Director General and that the trader was sufficiently informed regarding the main elements of the suspected infringement, and
- -the trader’s waiving of the right to obtain further information including full access to the file of the investigation.
While the proposed commitments procedure allows the Director General to decrease the amount of penalty requested by him to be imposed by the Civil Court by 10%-35%, the penalty for each infringement the trader admits to cannot be less than €4,650. The maximum penalty that may be imposed is that of €47,000. Furthermore, the entering into of commitments submissions does not prejudice the right of consumers to seek redress should the latter not have adequately benefitted from the remedies provided by the trader.
The Bill also states that should the trader and the Director General discontinue the commitments procedure, any information or document that would have been provided by the trader cannot then be used as evidence to establish infringement.
- ii. Adaption to the online environment
The Bill also proposes an amendment to article 12C(1)(c)(iv) of the Act, which concerns the contents of the sworn application to be made by the Director General to the Civil Court. According to the proposed amendment, the sworn application must contain a request by the Director General to the Civil Court for any other relevant order that may be necessary according to the circumstances of the case including, where appropriate:
- i. the removal of content or the restriction of access to an online interface or the ordering of an explicit display of a warning to consumers when they access an online interface;
- ii. ordering a hosting service provider to remove, disable, or restrict access to an online interface; or
- iii. ordering domain registries or registrars to delete a fully qualified domain name and to allow the competent authority concerned to register it.
With this new amendment, the Act is being adapted to tackle infringements that occur in the online environment. This amendment is mirrored in Article 12F of the Act, which grants the Civil Court the power to implement the above-mentioned requests where there are no effective means available to bring about the cessation or the prohibition of an infringement under the Act and to avoid the risk of serious harm to the collective interests of consumers.
- iii. Publication of judgments and decrees
An amendment to article 12H, which deals with the publication of judgments and decrees, is also being suggested. In deciding to publish judgments and decrees, the Civil Court must take into account any business secrets and confidential information, and may give the trader concerned the opportunity to specify the confidential parts of the judgment or decree to be excluded from publication. This notwithstanding, it is up to the Civil Court to decide which version of the judgment or decree will be published.
- iv. Jurisdiction of the Consumer Claims Tribunal
The jurisdiction of the Consumer Claims Tribunal will be increased to hearing and determining consumer claims where the value of such claims does not exceed €5,000. Currently, the Consumer Claims Tribunal can hear and determine claims of up to €3,500. This change is proposed to article 20 of the Act and would be reflected in the Consumer Claims Tribunal Rules (Legal Notice 8 of 1996 and as subsequently amended).
- v. Extension of Director General’s powers
The Bill also proposes an amendment to article 103 of the Act concerning the powers of the Director General with regards to inspections during investigations. The amendment aims to both extend and clarify the existing powers of the Director General in that the latter will be given the power to:
- i. enter and search any premises, land, or means of transport that the trader concerned uses for purposes related to his trade, in order to examine, seize, take, or obtain copies of information, data or documents, irrespective of their storage medium. This power may only be exercised when duly authorised by a warrant issued by a Magistrate and no entry and search may be effected between 7pm and 7am unless the Director General has reason to believe that a delay could cause the loss of necessary information;
- ii. make any inspection, conduct any test, or take any goods (on paying or making tender thereof);
- iii. seize any books, records, information, data, or documents for as long as, and to the extent, necessary for the inspection;
- iv. request any representative or member of staff of the trader to give explanations of books, records, information, data, or documents relating to subject matter of inspection;
- v. purchase goods or services as test purchases under cover of identity in order to detect infringements and to obtain evidence.
The consultation is open for feedback until 12 May 2020, and anyone who wishes to submit their contributions on the proposed Bill may do so by following this link.
This document does not purport to give legal, financial or tax advice. Should you require further information or legal assistance, please do not hesitate to contact Dr Annalies Muscat and Dr Laura Spiteri