MPs preparing laws criminalising market collusion and unfair terms of contract

The House Energy, Commerce, Industry and Tourism Committee is discussing proposals for laws to criminalise the violation of competition, as well as unfair terms of contract.

The rapporteur of the first bill, DISY MP and Chairman of the Committee Kyriakos Hadjiyiannis, said he submitted a bill that criminalises any prior agreements made in the market.

As Hadjiyiannis said, due to the fact that the Commission for the Protection of Competition (CPC) in Cyprus is what he described as “decorative” and “ineffective” in ensuring absolute and complete competition, the criminalisation of collusion or similar behaviors is the only way out.

Hadjiyiannis said that the discussion on this specific bill has been completed in the Committee and the issue will be put forward for final consideration at its next meeting.

"The situation in the country with the non-functioning of real competition is particularly worrying. Unfortunately, when there is an absence of competition policy, when there is inefficiency in the operation of that supervisory institution, we have in Cyprus, where there are cartels, where there are collusions, where things are done in unjustified ways," he said.

Hadjiyiannis added that these result in inaccuracies, the exploitation of consumers, and also harms the country's business sector as a whole.

He cited as examples high electricity prices, prices in public transport, banking systems, insurance and elsewhere. He added that competition is the supreme principle of the free market, as is the control and supervision of the proper functioning of competition.

When asked more about this, Hadjiyiannis stated that from the Legal Service's perspective, there are three-four observations that will be examined, not with the aim of preventing the proposed law from moving forward, but on the contrary, to improve it and make it more efficient.

Based on the proposed law, Hadjiyianis said, anyone will be able to report a competition violation to the police to investigate it, and if the CPC wants to conduct this investigation as well, it will be able to.

The penalties, he said, will be determined later.

Proposal for a law on unfair terms of contract

The Energy Committee also discussed a bill proposed by Movement of Ecologists – Citizens' Cooperation MP Stavros Papadouris regarding unfair clauses and terms in contracts.

Speaking after the end of the Committee meeting, Papadouris said that the discussion was completed, however, a small investigation by the Legal Service remains to be finished.

Papadouris noted that in his view, European Directive 93/13 is the beginning and end when it comes to unfair terms of contract.

"When we declare that we are fully harmonised, I think we are either blinding ourselves or misinforming some European institutions. That is why this proposed law was created," he said.

Papadouris noted that it is unacceptable that there are contracts active outside the market that contain abusive clauses and are exempt from scrutiny because they fall within certain time frames.

He added that Directive 93/13 clearly states that if any contract is identified that contains unfair clauses, there are two options: either these clauses are removed and the contract continues to exist with the same rights and obligations after the removal of these clauses, or these clauses are removed and if ultimately it cannot stand, any contract is simply terminated.

Papadouris also said that it is paradoxical that on the one hand there are decisions from the Consumer Protection Service that say that due to national legislation and time frame restrictions, these contracts cannot be examined and that it ends the complaints.

On the other hand, he added, decisions are issued by the Office of the Financial Ombudsman regarding abusive clauses, but creditors do not accept them and force complainants to go to court.

Papadouris referred to a decision of the Court of Appeal in December 2024, which overturned the decision of the District Court based on Directive 93/13 which overrides national legislation. This now constitutes a precedent for other cases, he said.

(Source: InBusinessNews)