Describes how widely e-Commerce is used, the primary sectors that sell through e-commerce, and how much product/service in each sector is sold through e-commerce versus brick-and-mortar retail. Includes what a company needs to know to take advantage of e-commerce in the local market and , reputable, prominent B2B websites.
Last Published: 2/13/2019

Overview
One of the ten priorities of the European Commission (EC) is to create a Digital Single Market (DSM).  The overall objective is to bring down barriers 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 has been followed by a number of concrete legislative proposals and policy actions.  They are broad reaching and include reforming e-commerce sector, VAT, copyright, audio-visual media services, consumer protection and telecommunications laws.  The EC has finalized new legislation on portability of online content and geo-blocking.  However, many DSM proposals are still going through the legislative process.  DSM-related legislation will have a broad impact on U.S. companies doing business in Europe.  In addition, new data protection legislation, the General Data Protection Regulation (GDPR) enters into force on 25 May 2018 (see separate section in this report).

The three main pillars of the DSM Strategy are:

Pillar I:  Better access for consumers and businesses to digital goods and services across Europe. 
•    Provide better access across Europe to online goods and services for consumers and businesses.
•    Remove key differences between the online and offline worlds to break down barriers to cross-border online activity.

Pillar II: Shaping the right environment for digital networks and services to flourish 
•    Achieve high-speed, secure and trustworthy infrastructures and content services.
•    Set the right regulatory conditions for innovation, investment, fair competition and a level playing field. 

Pillar III: Creating a European Digital Economy and society with growth potential
•    Invest in technologies, such as cloud computing and Big Data, and in research and innovation to boost industrial competitiveness and skills.
•    Increase interoperability and standardization.

Further information is available at ec.europa.eu/priorities/digital-single-market/index_en.htm.

DSM Strategy 
The Electronic Commerce Directive (2000/31/EC) provides rules for online services in the EU.  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
More than three-quarters of Maltese individuals now use the Internet. E-commerce, whether business to consumer (B2C) or business to business (B2B), has evolved rapidly since 2006 when the government published the Electronic Commerce Act regulations, which require information service providers to furnish basic identifying information to customers.

The regulations also established obligations ensuring appropriate levels of transparency with respect to online commercial communications.  As a result, E-commerce in Malta experienced an exceptional boost over the past ten years, with consumers, businesses, and the government realizing the potential opportunities and advantages of E-commerce.
The government’s E-commerce Digital Strategy, which covers a seven-year period from 2014-2020,  ensures that businesses have the necessary means and skills to capitalize on opportunities brought about by E-commerce.  The strategy set out four different pillars to achieve its objectives: 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, 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 government continues to promote E-commerce, digital services, and investment in

ICT and blockchain technology.
Despite a marked uptick in E-commerce over the past decade, almost three quarters of brick and mortar operations are skeptical that their product or service is suitable for transactions over the Internet.  In addition, local businesses demonstrate a lack of knowledge and low uptake of cloud services. 

Domestic e-Commerce (B2C)
While Maltese customers still prefer shopping at brick-and-mortar locations, microenterprises, SMEs, and large businesses are realizing the potential benefits of digital technologies in expanding their base of customers and as an advertising platform.  Businesses often use the Internet to engage with their customers, though they do not necessarily conclude the transactions online.  The Malta Communication Authority has carried out studies that show a potential correlation in Malta between the size of a business and the use of digital tools, with SMEs and large enterprises embracing technology more aggressively than microenterprises.   
The Malta Communications Authority study also shows that consumers use the Internet as the first resource to gather pre-purchase information, regardless of whether the consumer completes the  purchase in-store or online.  Of EU Member States, Malta performs second best for sales via electronic data interchange.  However, only slightly less than a third of digital buyers purchase from domestic websites.  The latter purchases related to event tickets, flights, and accommodation.  In contrast, consumers of many EU countries make bulk online purchases within one’s own country.  Nonetheless, Internet and E-commerce uptake in Malta compares well with EU averages. 

Cross-Border E-commerce
More than 60 percent of Internet users in 2017 claimed to have purchased goods or services online, with clothing and sporting goods, holiday accommodation and other travel arrangements the most commonly acquired cross border items and services.

E-Commerce Services
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 Information and Communication Technology (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 damages to an injured party.  This provision is also one of the few instances under Maltese law where a court awarding damages may also consider moral prejudice suffered.  To ensure that an injured IP rights holder has a sufficient remedy when its rights have been infringed, a court may also apply an alternative method for the calculation of damages, payable as it considers appropriate.  The court may also employ other corrective measures, including recalling the product from circulation within all channels of commerce (whether online or physical) and destruction of seized items.
Online Payment

The following are the major payment gateways supported in Malta:
•    2Checkout 
•    Alipay Global 
•    Authorize.net 
•    BitPay 
•    Checkout.com 
•    Coinbase 
•    ComproPago (Efectivo) 
•    ePay / Payment Solutions 
•    GoCoin 
•    LAY-BUY Powered by PayPal 
•    Mondido Payments 
•    MultiSafepay 
•    NETbilling 
•    PAYMILL 
•    PayPal Express Checkout 
•    QuickPay 
•    Realex Payments (Offsite) 
•    WorldPay (Direct) 
•    WorldPay (Offsite) 

Mobile E-Commerce
Businesses in Malta still exhibit a degree of resistance towards online business operations, despite the upward trends, both in the number of data-enabled mobile subscriptions, as well as online purchasing.  Only slightly more than half of businesses with a website have a mobile-optimized site, while a mere 12 percent of digitally-enabled businesses sell through E-commerce channels.  

Digital Marketing and Social Media
The local trading sector acknowledges the benefits and effectiveness of digital marketing both as a tool to become more competitive and as a means to broaden its market opportunities.  Facebook occupies the top spot as the preferred platform of choice.  Indeed, Eurostat data places Malta at the forefront in the use of social networks like Facebook and LinkedIn for branding and promotional purposes.

Major Buying Holidays
Christmas is 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.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.