MCCAA publishes New Guidelines on the Method of Calculating Penalties for breaches of Competition Law

The Guidelines on the Method of Calculating Penalties issued by the Office for Competition (the “Office”) within the MCCAA constitute a key instrument for enhancing transparency and predictability in Maltese competition enforcement. Published on the 6 February 2026, the document outlines the Office’s methodology when proposing penalties before the Civil Court (Commercial Section) for alleged infringements of Articles 5 and 9 of the Competition Act and Articles 101 and 102 TFEU (i.e. anticompetitive agreements or concerted practices and abuse of dominant position

1. Purpose and Legal Framework

The Guidelines clarify how the Office interprets and applies the penalty provisions contained in national competition legislation, with their central aim being to ensure that penalties are effective, proportionate, and dissuasive, reflecting both the harm caused to competition and the conduct of the infringing undertakings. The Office’s Guidelines are closely modelled on the European Commission’s 2006 Guidelines on fines and relevant EU case law.

Under Article 12A of the Competition Act, the Director General’s sworn application instituting proceeding before the Civil Court (Commercial Section) shall, where appropriate, request the imposition of penalties when an infringement may have occurred, and Article 21 sets the statutory cap at 10% of an undertaking’s total worldwide turnover. These Guidelines do not bind the Court but represent the Office’s legal position and standard practice. They may be amended or revoked at any time and are published on the MCCAA website.

2. General Structure and Methodology

The Office utilises a structured six‑step approach when determining the proposed penalty.

Establishing the Basic Amount

The starting point is the value of the undertaking’s relevant sales, multiplied by a gravity percentage ranging from 0-30%. The seriousness of the infringement determines the rate, with cartel conduct and other very serious infringements positioned at the higher end of the scale. An additional 15-25% uplift may be applied for general deterrence in such serious cases (such as cartels);

Adjustment for Duration

The basic amount is multiplied by the number of years during which the undertaking participated in the infringement. Periods shorter than six months count as half a year; those exceeding six months count as a full year. This calculation may be departed from where the methodology over-estimates or under-estimates the penalty in question.

Aggravating and Mitigating Circumstances

The penalty may be increased or reduced depending on aggravating or mitigating conduct such as leadership in the infringement, coercion, recidivism, obstruction, limited involvement, cooperation, or duress of the parties in question. These considerations reflect Article 21(4) of the Competition Act.

Specific Deterrence Adjustment

The Office may further increase the penalty to ensure adequate deterrence, especially where an undertaking’s financial strength might otherwise render the penalty insufficient. This adjustment may also address situations where relevant sales do not accurately represent the harm or the undertaking’s involvement.

Proportionality Review and Maximum Cap

The Office evaluates whether the resulting penalty is proportionate in light of the infringement’s nature, market impact, the undertaking’s size, and any illicit profit gained. The final amount must not exceed 10% of total worldwide turnover as capped in the Competition Act.

Leniency, Settlement, and Inability to Pay

Undertakings may receive reductions if they enter into a leniency agreement or settle proceedings with the Office. Settlement may reduce the penalty by 10-35%. In exceptional cases, demonstrated long-term inability to pay may justify a further reduction. A reduction may be solely granted where the imposition of the penalty “would irretrievably jeopardise the economic viability of the undertaking concerned and cause its assets to lose all their value”

3. Final Observations

The Guidelines provide undertakings with a predictable and transparent framework, offering insight into how financial penalties are formulated while reaffirming the Office’s commitment to deterrence and robust competition enforcement. Although flexible and subject to case-specific adjustments, they serve as an essential reference point for businesses navigating potential exposure to competition penalties in Malta.

From a practical and systemic standpoint, it is recognised that competition investigations in Malta can extend over several years before reaching administrative closure. Following this stage, matters must be referred to the Civil Court (Commercial Section) for judicial confirmation and the possible imposition of penalties, introducing an additional procedural step that may lengthen the overall timeframe for final resolution.

Whether the current public enforcement framework will, in practice, deliver timely, efficient, and effective redress for affected parties remains to be seen. Nevertheless, the publication of these Guidelines constitutes a constructive development aimed at enhancing transparency, predictability, and the functioning of Malta’s public competition enforcement system.