DECISION NOTICE - Contracts which include ‘Price Indexation Clauses’

In recent months, several providers have introduced clauses in subscriber contracts allowing them to adjust charges or fees based on an objective consumer price index compiled by a public institution. These clauses, referred to as 'price indexation clauses' restrict end-users from terminating contracts without penalties upon such adjustments. This matter was central to a ruling by the Court of Justice of the European Union, affirming that price adjustments resulting from operating a price indexation clause contained in a contract, do not constitute a contractual modification warranting the legal requirement to provide consumers the right to withdraw from their contract without penalties. The MCA is concerned that the inclusion of such clauses in contracts may have a negative impact on consumers, microenterprises, small enterprises or not-for-profit organisations, due to:

• Lack of end-user awareness about these clauses.

• Potential misunderstandings of their impact.

• Uncertainty about total costs throughout the contract period.

• End-User challenges with unpredictable or unexpected increases in fees and charges.

• Hindrance to end-users’ ability to compare tariff plans, distorting effective competition in the market.

On the 25th of August 2023, the MCA initiated a public consultation on proposed consumer protection measures. Submissions were received from six stakeholders, including Consumer Association Malta, Consumer Affairs Council, Office for Consumer Affairs within the Malta Competition and Consumer Affairs Authority, EPIC Communications Limited, GO plc, and Melita Ltd. After careful consideration of stakeholder feedback, the MCA published a Decision Notice on 7th December 2023, mandating requirements for providers of publicly available electronic communications services other than number independent interpersonal communications services and other than transmission services used for the provision of machine-to-machine services.