A consumers’ Agenda (ii)

During the first part of this article, I pointed out a very high priority that would ensure consumer rights. This priority is to ensure increase in competition in the local markets. I focused on e-commerce as one very important way to induce competition into the local markets and to ensure that the benefits of competition are transferred to the consumers.

Throughout this article, I shall focus on a local structure which is supposed to ensure fair competition, and also address the issue of consumer redress. I shall concentrate on the Fair Competition and Consumers’ Affairs Division however, and discuss how this Division can be improved. If there is one thing that both political parties seem to agree on, it is that we need a new Consumers’ Agency.

Should this be a government department or should it be an authority? If we look at the experience we had with other authorities, I seriously doubt that we need another such authority as the large majority of these act just like any other government department. The only difference is that we are paying much more for such authorities and are still getting the same result.

But should it be this way? I believe that things can be very different with a little bit of political will and professionalism.

I believe that such an agency should operate as an authority, i.e. operate within the framework of government policy but independent of government. It should also be proactive. By its very nature it should be a regulatory structure to ensure that markets open up and competition is for the benefit of consumers.

To ensure this, the legislation should give more independence to this Agency than it is presently giving to many authorities. If we merely give such an Agency similar legislation to what is, for example, given to MRA, we only get another MRA, i.e., another government rubberstamp.

Though legislation is necessary, it is not sufficient. There are certain other requirements which are necessary for such an Agency to be able to meet the objectives stated above. One such requisite is the orientation of the person leading such an Agency. Let me make myself clear. I do not mean political orientation, as I am sure that the government will ensure that the person leading such an Agency will be sympathetic, to say the least, with the government of the day. But this does not necessarily mean that this Agency will be a rubber stamp. If the person has enough political clout, is professional in his/her duties, and is committed to ensure greater competition which will benefit the consumer, then I am sure that such a person will deliver.

I am speaking from experience. During the time I was representing the local consumer association, I met a small number of such persons, one of whom was Mr Joseph Tabone, who was Chairman of the Malta Communications Authority. During my contacts with him as Chairman, I could see that though he was operating within government policy, he was also ensuring that the local consumer would benefit. One such benefit that emerged from our encounters, was that when we discussed the introduction of itemized telephone billing, he agreed and, in spite of the obstinate opposition of the then Telemalta, his determination and professionalism succeeded in winning the day for consumers.

When I mentioned orientation above, I was referring to the mindset that those leading such an authority should have. Going through the websites of both the local Division and the Office of Fair Trading, I was struck by the difference relating to the objectives of these two institutions. The objective looks similar, but I believe that fundamentally it is different. Whereas the local objective was “Protecting the proper functioning of the market for consumers and traders alike”, the OFT’s objective was “Making markets work well for consumers”. The fundamental difference is that whereas the Division’s objectives is to ensure the proper functioning of the market, implying that the main objective is to see that the market is a level playing field for business, the OFT’s objective is to see that the benefits of the market are transferred to consumers. This is a marked difference, as the objective is not only to have competition, but to ensure that the benefits end up in consumers’ pockets.

As I already mentioned, autonomy from the government is essential. There are two reasons. First, in Malta the basic utility markets depend on the government. Observe the inertia and the resistance of the Division to get involved in the present and past water and electricity tariff saga. Second, this Agency needs to be independent of any political influence especially one in favour of the local business. We all know the great connections that exist between business and the local political class. A case in point was when some time ago the Division believed that an advert was not within the limits of the present legislation. It issued a statement. The firm - a communications one - rebutted the allegations. Suddenly there was complete silence. Why? I very much doubt that the Division’s stand was incorrect as I am sure that before issuing their statement they did their homework well. One can imagine what happened.

I believe that in order to secure such autonomy it would be very helpful if such an Agency be transparent and accountable not to a particular Minister but directly to Parliament. To ensure both transparency and accountability, such an Agency must be reviewed by a Parliamentary Committee so that Parliament would be able to devote as much time as is necessary, thereby, ensuring that this Agency would be achieving its aims.

One last point. One also needs to look at other complementary structures. We simply cannot have the Agency and the Consumer Affairs Council having nearly the same functions. We need to decide what function the latter should have. Once we decide about these functions, we need to ensure that it has the resources to achieve such functions and also be transparent and accountable, not to the Minister but to the local consumers.

Published on Maltastar 26th February 2010
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