Office For Competition

Agreements, Decisions of Associations and Concerted Practices

Article 5(1) prohibits any agreement between undertakings, any decision by an association of undertakings and any concerted practice between undertakings having the object or effect of preventing, restricting or distorting competition within Malta. Article 5 provides a non-exhaustive list of agreements, decisions or practices which are prohibited under the Competition Act and which are consequently ipso jure null and unenforceable. This list covers agreements, decisions or practices which:

  • directly or indirectly fix the purchase or selling price or other trading conditions;
  • limit or control production, markets, technical development or investment;
  • share markets or sources of supply;
  • impose the application of dissimilar conditions to equivalent transactions with other parties outside such agreement, thereby placing them at a competitive disadvantage; and
  • make the conclusion of contracts subject to the acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

In terms of Article 5(3), the provisions of Article 5(1) do not apply in the case of any agreement between undertakings, any decision by an association of undertakings or any concerted practice which satisfies the following four cumulative conditions:

  • it contributes towards the objective of improving production or distribution of goods or services or promoting technical or economic progress;
  • it allows consumers a fair share of the resultant benefit;
  • it does not impose on undertakings concerned any restriction which is not indispensable to the attainment of the said objective; and
  • it does not give the undertakings concerned the possibility of eliminating or significantly reducing competition in respect of a substantial part of the products to which the agreement, decision or concerted practice refers.

Article 101 of the TFEU also applies where any agreement between undertakings, any decision by an association of undertakings or any concerted practice may appreciably affect trade between Malta and any one more Member states.