On the 6th of February 2026, the Office for Competition within the Malta Competition and Consumer Affairs Authority (MCCAA) issued Guidelines on the Method of Calculating Penalties. These Guidelines are intended to enhance legal certainty, predictability, and transparency by clarifying how the Office interprets and applies the Competition Act (Chapter 379 of the Laws of Malta) and Articles 101 and 102 of the Treaty on the Functioning of the European Union.
The Guidelines set out the methodology employed by the Office for Competition (the ‘Office’) when determining the level of financial penalties to be proposed to the Civil Court (Commercial Section) in cases where undertakings or associations of undertakings are found to have infringed competition law.
As a preliminary matter, Article 12A of the Competition Act provides that the Director General’s sworn application instituting proceedings before the Civil Court (Commercial Section) shall, where appropriate, include a request for the imposition of penalties. Article 21 of the Act further establishes a statutory ceiling, stipulating that any penalty imposed may not exceed 10% of the undertaking’s total worldwide turnover in the preceding business year.
The Six-Step Approach
To determine the amount of the penalty to be requested from the Court, the Office applies a structured six-step methodology:
1. Establishing the Basic Amount
The starting point is the value of the undertaking’s relevant sales connected to the infringement. This figure is multiplied by a gravity factor ranging from 0% to 30%, reflecting the nature, scope, and seriousness of the infringement. In particularly serious cases, an additional uplift of between 15% and 25% may be applied in more serious cases.
2. Adjustment for Duration
The basic amount is then multiplied by the number of years during which the undertaking participated in the infringement. Periods of less than six months are treated as half a year, whereas periods exceeding six months are counted as a full year.
3. Aggravating and Mitigating Factors
The penalty may subsequently be adjusted to reflect case-specific factors in accordance with Article 21(4) of the Competition Act. Aggravating circumstances such as recidivism, a leading role, or obstruction may justify an increase. Conversely, mitigating circumstances including limited involvement, effective cooperation, or conduct under duress may warrant a reduction.
4. Adjustment for Specific Deterrence
The Office may increase the penalty if the current amount is too low to effectively deter a very large company with great financial strength.
5. Proportionality and Maximum Caps
The Office then assesses whether the resulting figure is proportionate in light of the undertaking’s size and financial capacity. In all cases, the final proposed penalty must comply with the statutory maximum of 10% of the undertaking’s total worldwide turnover for the preceding financial year.
6. Leniency and Settlement Discounts
Reductions can be applied if a company cooperates through a leniency or settlement agreement, which can result in a 10% to 35% reduction in the fine.
It is important to note that while these guidelines represent the Office for Competition’s official position and practice, they are not binding on Maltese Court. The methodology closely reflects the approach adopted by the European Commission in its 2006 Guidelines on fines, as well as relevant caselaw of the EU courts, thereby aligning Maltese practice with established European competition law principles.
