Abuse of a dominant position

Let’s run a simple experiment whereby political parties are treated like commercial entities operating on the market, taking it that we agree that the dominant players are the PN and the newly-branded PL.

The potential competitors are the small parties. The geographical market is, of course, the Maltese islands. The relevant market is tricky to define: perhaps a mix of promises, pledges and – in this day and age where image makeovers are king – style. The price you pay is your ballot and, for the more generous souls among us, the more or less compromising donations granted to the big two.  

Before someone accuses me of being cynical by seemingly reducing democracy to a mere market, I should point out that Maltese political parties do, in fact, increasingly resemble commercial entities in a variety of ways: in terms of structure (Labour even appointed its own CEO); their ownership of profit-making entities (most recently, telecom providers PING and RED); their control over formidable marketing machines (newspapers, radios and television stations) and their overt and covert influence over a host of media players.

Here, perhaps more than anywhere else in Europe, clients demonstrate astonishing brand loyalty and at least one of our dominant undertakings is currently undergoing veritable image surgery: from brand-name to logo via actual physical makeovers.

Finally, the central political ethos projected over the past decade has, arguably, become predominantly market-oriented with concepts such as efficiency, investment, wealth-generation and development entirely overshadowing the less-fashionable fairness, justice and civil rights.

Because this article does not purport to be a comprehensive treatise on competition law, I’d like to focus on one particular element linked to the determination of dominance in a relevant market. And this is whether the entry barriers imposed on potential competitors to start competing with the dominant undertakings are prohibitively high.

The interesting thing about the debate surrounding entry barriers is that some experts warn that factors which may appear to be objectionable entry barriers are simply indicative of the superior efficiency of the incumbent firm in terms of resources, skill, capital and the like, an argument which can be readily transposed to our political debate.

These justified indicators of superior efficiency are contrasted with artificial entry barriers which operate as exclusionary practices. And the questions which one should ask are: Is entry to the field possible in the first place? Have artificial entry barriersbeen erected which make it impossible or prohibitive for new entrants to penetrate the given market? Do legal provisions exist which render it considerably more difficult for potential competitors to break into that market?

Of course, transposing competition law theory into the political sphere will raise a few eyebrows. But I invite you to consider the cumulative effect of the factors I have raised: two dominant political players which increasingly behave like commercial entities, own their own media houses while maintaining a considerable presence in others and which have absolute discretion over the rules governing entry into their market.

My suggestion is that this situation – more than any other factor - is hindering democratic development in this country.

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