Sea Malta has been found guilty of abusing its dominant position and of engaging in a cartel to limit and impede competition in Malta, fix prices and control the market.
It has also been found guilty of having imposed discriminatory tariffs on those operators who chose the competition’s services.
This judgement has been handed down by the Fair Trade Commission in a complaint registered by WJ Parnis England Ltd against Sea Malta and Gollcher Company Ltd as agents of Grimaldi (Genoa) Line.
It must be emphasised right at the outset that Grimaldi (Genoa) has nothing to do with Grimaldi Napoli, which is negotiating the purchase of Sea Malta.
In this complaint, Parnis England are acting on behalf of Navigation Maritime Bulgare (Bulcon).
The case dates back to October 2003. Earlier that year Bulcon had launched a trailer Ro-Ro service Genoa-Malta-Tunis-Genoa with very competitive rates.
A number of local operators opted to choose the new sea route and the joint service of Sea Malta and Grimaldi (Genoa) was thus affected. In just a few months, the new service had seized 30 per cent of the market share, that is between 30 and 35 trailers a week.
Bulcon alleged, and proved, that Sea Malta and Grimaldi (Genoa) had retaliated by writing to and calling the clients who had left them, threatening them that if they went over to the competition, they would face higher charges on all routes operated by Sea Malta and Grimaldi (Genoa). As a result, Bulcon stopped the service.
Both Sea Malta and Grimaldi (Genoa) have denied the charges. Sea Malta said it is the national line but it does not have a dominant position in the market, that its rates reflect commercial reality and that the Bulgarian company enjoys a government subsidy.
During the proceedings, it also resulted that the trailer operators’ association (ATTO) was asked to intervene, as it did, but with no effect. The president of the association testified that when he personally phoned on behalf of his own company, Express Trailers, Sea Malta threatened him with increased rates on the other routes served by it.
In the first instance, the Director of Fair Trade found the two companies to be enjoying a dominant position and seriously abusing their position and having impeded the market penetration of competitors.
In its judgement, the commission said that the threat to charge customers who use the competition higher prices “amounts to commercial vengeance which is to be condemned and which is almost a criminal act”.