This year is the 10th anniversary of the establishment of the European Mediterranean partnership when foreign ministers of the European Union, in joint collaboration with their colleagues of the Euro-Mediterranean partnership, agreed to work to establish a new Mediterranean of peace, stability and prosperity.

In a bid to further underline this political, social, economic and cultural initiative, the foreign ministers of this EuroMed partnership have last November dubbed 2005 as the Year of the Mediterranean. Malta lies at its core.

I believe that the Mediterranean’s vast potentials and its importance within international relations encourages Malta even more to maintain the implementation of the necessary strategies in order to enhance its competitiveness and to contribute further in the stability, security and prosperity of the Mediterranean. I consider this to be a paramount role, which

has become even more important after our accession to the European Union last year. Both Europe and the Mediterranean exist in a mutual symbiosis to each other.

Within this context, a sound competition policy is essential when carrying out business effectively. We must ensure that each competitor is competing on a level playing field, and within an environment which encourages entrepreneurship, while safeguarding the basic and fundamental rights of the consumer.

Competition Law and policies aim to safeguard and enhance competition in the market-place within a free market economy. As Competitiveness Minister I certainly agree that genuine competition is the most effective way to induce companies to maintain operational costs low, to be efficient and to innovate, and hence to offer customers the best product or service at the best possible prices. This is our mission statement, and the significance of ‘competitiveness’. The beneficiaries of such an effective competition are after all the traders themselves, and ultimately the consumers, who lie at the end of the line.

It follows that competition law provides a legal order within which the interests of traders and consumers are protected. Thus, we find that competition law prohibits:

· Cartels, that is agreements or concerted practices between competitors whereby a common strategy is adopted, for instance on price, in order to eliminate the risks of competition. Such agreements put other traders not party to the agreement at a significant disadvantage and they deprive consumers of the benefit of competition;

· Abuse of dominance, whereby smaller traders and consumers find themselves at the mercy of powerful companies abusing of their strong position on the market, as in charging excessive prices.

On the other hand, the Competition Law promotes a market behaviour which is beneficial in terms of economic efficiency and which is beneficial for the consumer. This includes for instance, cooperation 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, by offering among others, high quality or better after-sales service and 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.

The domestic Consumer and Competition Office have over the past years used its powers to shield smaller competitors against abuse by more powerful rivals. It has acted as a consumer guardian by detecting and prohibiting restrictive commercial practices and has served as a guide for businesses to turn on to a legitimate track when adopting their business strategies.

On the other hand the Commission for Fair Trading has over the years pronounced some very important decisions and thus established case law in the local field, thereby enabling the local businessmen to become more familiar with law provisions and steer away from restrictive agreements or abuse of dominant position.

With Malta’s EU accession, our responsibilities have increased considerably. Subsequently the Office of Fair Competition has been designated as the local National Competition Authority.

Over the years we have amended this legislation in the light of gained experience, recently amending it again to enable the office to assume its new important responsibilities as a national competent authority. I am conscious of the importance of this Office since it is responsible for enforcing five different sectors of legislation, four of which are consumer related while the other concerns competition.

The Consumer and Competition division over the past year has dealt with 12 decisions 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 and acquisitions) notifications and consumer law infringement cases.

In spite of the limited human resources available this office 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, maritime, supermarkets and telecoms sectors, 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. Moreover the office dealt with eight notifications concerning concentrations. One of these concentrations concerned a conglomerate merger by acquisition in the business solution market while the other seven were in respect of acquisitions in various sectors including the construction industry, food and beverages industry, and investment services. These concentrations were all cleared by the office.

Four cases were referred to the Commission for Fair Trading during the past year. The first case involved an alleged restrictive practice in the maritime sector, two others involved an appeal against the office’s decision in the tourism and supermarkets sectors.

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 thereon.

As far as complaints related to consumer law infringements go the office dealt with 16 cases which concerned mainly misleading advertising issues – two of them were considered inadmissible in view of lack of jurisdiction.

Updating legislation in this field is a continuous process. With this in mind the Consumer and Competition Division is currently in the process of updating current laws regarding mergers or acquisitions so as to reduce regulatory burdens for mergers or acquisitions between foreign companies generating sales in Malta but which do not affect the local market directly.

An effective competition policy has a direct impact on the daily life of consumers and this government is determined that consumers will continue to be vested with all pertinent rights and obligations. There is a two way process, which as happened in the past few years, will be consolidating even further.