Malta - eCommerceMalta - eCommerce
Creating a Digital Single Market (DSM) is one of the ten priorities of the European Commission (EC). The overall objective is to bring down barriers – regulatory or otherwise – to unlock online opportunities in Europe, from e-commerce to e-government. By doing so, the EU hopes to do away with the current 28 fragmented markets and create one borderless market with harmonized legislation and rules for the benefit of businesses and consumers alike throughout Europe.
The EC set out a high-level vision in its May 6, 2015 DSM Strategy, which outlined three main pillars: e-commerce, digital networks and services, and growth potential of the European digital economy. The strategy will be followed by a number of specific and concrete legislative proposals and policy actions to be developed in 2015 and 2016. They are broad reaching and include reforming e-commerce sector, VAT, copyright, consumer protection and data privacy laws. DSM-related legislation will have a broad impact on U.S. companies doing business in Europe.
The previously mentioned e-Commerce Directive also provides rules for online services in the EU. It requires providers to abide by rules in the country where they are established (country of origin). Online providers must respect consumer protection rules such as indicating contact details on their website, clearly identifying advertising and protecting against spam. The Directive also grants exemptions to liability for intermediaries that transmit illegal content by third parties and for unknowingly hosting content.
Comprehensive market research on e-commerce in the EU is available upon request from the U.S. Mission to the EU.
Current Market Trends
E-commerce, (whether B2C or Business-to-Business [B2B]), was slow to develop in Malta; however, it has evolved rapidly. In October 2006, the government published the Electronic Commerce Act regulations, which requires information service providers to furnish basic identifying information to customers. The regulations also established obligations to ensure appropriate levels of transparency with respect to online commercial communications. As a result, e-Commerce in Malta experienced an exceptional boost over the past five years, with consumers, businesses, and the government realizing the potential opportunities and advantages of e-Commerce.
In 2014, the Government of Malta launched the Malta e-Commerce Digital Strategy, covering a seven-year period from 2014-2020 and aimed at ensuring that businesses have the necessary means and skills to capitalize on opportunities brought about by e-Commerce. In order to achieve its objectives, the strategy set out four different pillars: engendering trust in e-Commerce, transforming micro-enterprises, taking SMEs and industry to the next level, and making Malta a global e-Commerce player.
Relevant Maltese legislation aims to be technology-neutral, compliant with EU legislation, harmonized with other Member States’ regimes, and broadly seeks to attract business and investment and foster competition in the market. Moreover, Malta’s government leads the e-government initiative, increasingly making more government service accessible to Maltese citizens via electronic channels, including by means of an electronic ID available to every adult citizen. The current government is continuing previous efforts to promote e-commerce, digital services, and investment in ICT.
Domestic e-Commerce (B2C)
While Maltese customers still largely prefer shopping at brick-and-mortar locations, microenterprises, SMEs, and large businesses have realized the potential benefits of digital technologies in expanding their base of customers and as an advertising platform. Businesses claim that they make use of the Internet to engage with their customers, though they do not necessarily conclude the transactions online. Studies carried out by the Malta Communication Authority show that, in Malta, there is a potential correlation between the size of a business and the use of digital tools, with SMEs and large enterprises embracing technology more aggressively than microenterprises. The use of ICT is evident by the number of businesses having a website, where larger businesses are more likely to have a corporate website. Recent national statistics indicate an upward trend of computer use throughout all enterprise size classes and economic activities.
Maltese consumers’ use of the Internet continues to grow, with more than three-quarters of the Maltese now using the Internet. A study carried out by the Malta Communications Authority shows that the Internet is often the first resource for customers wishing to gather information before making a purchase, regardless of whether or not the purchase is completed in-store or online. This is further substantiated by the growth in online purchasing; more than half of the population now engages in such activity, with steady year on year increases. Malta is the second best performing EU Member State for sales via electronic data interchange. However, only slightly less than a third of digital buyers purchase from domestic websites. The latter purchases are mainly related to event tickets, flights, and accommodation. This contrasts to many EU countries, where the bulk of online purchases are carried out within one’s own country. Nonetheless, Internet and e-Commerce uptake in Malta compares well with EU averages, though there is still room for continued growth.
In 2016, over 60 percent of individuals who were internet users claimed to have purchased goods or services online, withclothing and sporting goods the most commonly acquired cross border items.
The Malta e-Commerce Digital Strategy is a product of the country’s desire to harness the digital industry to increase national prosperity. Malta’s legal framework and economic policy support ICT operations, and the country has invested heavily in state-of-the–art telecommunications infrastructure. There are a number of Internet Service Providers in Malta with a clear interest in off-shore e-Commerce development.
e-Commerce Intellectual Property Rights
Maltese law provides civil remedies options to intellectual property rights holders. The Enforcement of Intellectual Property Rights (Regulation) Act, which came into effect at the end of 2006, fully implements the provisions of Directive 2004/48/EC of the European Parliament and of the Council of April 29, 2004 on the enforcement of intellectual property rights (the Directive).
The relevant provision of the Act (Article 12) deals with damages with regard to the infringement of intellectual property rights as regulated by Maltese law. A court may order the payment of an amount of damages to an injured party, which will take into account all relevant aspects, including the negative economic consequences that may have been suffered as well as unfair profits made by the infringer. This provision is also one of the few instances under Maltese law where a court awarding damages may also have regard to moral prejudice suffered. To best ensure that an injured IP rights holder is provided with a sufficient remedy where its rights have been infringed, the Court is also allowed to apply an alternative method of calculation of damages, payable as it considers appropriate. Other corrective measures which may be applied where the Court has found a breach of an IP right include recall from circulation within all channels of commerce (whether online or physical) and destruction of seized items.
The following are the major payment gateways supported in Malta:
ePay / Payment Solutions
LAY-BUY Powered by PayPal
PayPal Express Checkout
Realex Payments (Offsite)
Despite the upward trends, both in the number of data-enabled mobile subscriptions, as well as online purchasing, businesses in Malta still exhibit a degree of resistance towards online business operations. Only slightly more than half of businesses with a website have a mobile-optimized site, while a mere 12 percent of digitally-enabled businesses are selling through e-Commerce channels. Almost three quarters of non-e-Commerce companies are not convinced that their product or service is suitable for transactions over the Internet. In addition, there is also a lack of knowledge and low uptake of cloud services by local businesses, which still hesitate to use these and other ancillary services that are challenging the operations of SMEs and microenterprises in the digital era.
Digital Marketing and Social Media
The local trading sector acknowledges the benefits and effectiveness of digital marketing both as a tool to be more competitive and as a means to broaden its market opportunities. Facebook occupies the top spot as the preferred platform of choice. Eurostat data places Malta at the forefront in the use of social networks like Facebook and LinkedIn, amongst others, for branding and promotional purposes.
Major Buying Holidays
Christmas is typically the largest gift-giving holiday in Malta. Popular American holidays, such as Halloween, are also gaining momentum in Malta. Other celebrated holidays are Easter, Carnival, Valentine’s Day, Mother’s Day, and Father’s Day.
Malta eCommerce Industry Trade Development and Promotion eCommerce