Competition

Competition

A new competition law recently came into force, consolidating and enhancing the provisions of the original competition regime that dated from 2004. The General Authority for Competition (“GAC”) is an independent authority in charge of supervising the implementation of the competition law, and its responsibilities in the Kingdom of Saudi Arabia include protecting and encouraging fair competition and combatting monopolistic practices that affect lawful competition. The GAC is further devoted to implementing international best practices in antitrust matters in Saudi Arabia, as demonstrated by its membership in the International Competition Network, an organization that seeks to share competition principles on a global basis.

The recent Saudi competition law contains a number of key principles that the GAC enforces, including:

• a prohibition on agreements between establishments that are intended to or might restrict trading or fair competition in the market (the competition law specific eight areas of prohibited activities);
• a regime for GAC to formally permit otherwise anti-competitive behaviours if it considers such practices to enhance the performance of the market or establishments in terms of the quality of products, technical improvement, and creativity competence. The benefit to consumers of the relevant practice must be greater than the restriction on free competition; and
• requiring prior approval for “economic concentration” transactions where the total annual sales of the parties to the transaction exceed SR100 million.

The competition law establishes a judicial committee called the “Committee for the Review and Adjudication of Competition Law Violations” as the competent body to hear disputes relating to alleged violations of the law and its implementing regulations.