Competition Law

Competition law enables undertakings to conduct their business fairly by preventing cartels, anti-competitive agreements and large firms from abusing their dominant positions. Other areas of competition law, such as merger control, seek to ensure that undertakings’ growth by merging or acquiring other undertakings does not produce anti-competitive effects that may harm consumers and smaller undertakings.

The Maltese authority in charge of ensuring that competition law is properly applied is the Malta Competition and Consumer Affairs Authority (‘MCCAA’). The MCCAA is established by virtue of Article 3 of the Malta Competition and Consumer Affairs Act (Chapter 510 of the Laws of Malta).

The main objectives of the MCCAA are to promote, maintain and encourage competition, to safeguard the interests of consumers and enhance their welfare, to promote sound business practices, and to adopt and co-ordinate standards in relation to products or services.

In a merger by acquisition, the acquiring company steps into the shoes of the acquired company or companies and acquires all the assets, rights, liabilities and obligations of the company or companies being acquired. In turn the shareholders of the company being acquired become shareholders of the acquiring company, following which the company being acquired ceases to exist.

In a merger by formation of a new company two or more companies merge to create a new company. This new company will hold all the assets, rights, liabilities and obligations of the merging companies.

In some cases, mergers or acquisitions cannot go ahead unless the transaction is green-lighted by the MCCAA. Pursuant to the Competition Act (Chapter 379 of the Laws of Malta), agreements that may result in the establishment of ‘concentrations’ of certain size must be notified to the MCCAA and can only be implemented once they have been authorised by the Authority.

Gonzi & Associates, Advocates can assist you with identifying whether your proposed transaction falls within scope of the concentration notification requirements and if so, assist you with drafting and submitting the relevant notification.