Saudi Arabia’s New Competition Law
Saudi Council of Minister approved the draft Competition Law thereby replacing Competition Law enacted via Royal Decree No. (M/25) of 2004. The implementing regulations shall be issued by Board of the General Authority for Competition (BGAC) within 180 days from the publication of the new Competition Law (new law) in the Official Gazette.
The applicability of the new law shall be firstly, on natural or juristic person conducting economic activity i.e. agricultural, commercial, industrial or service. Also, involved in sale and purchase of commodities and services in Saudi Arabia. Additionally, to economic conduct outside Saudi Arabia which may damage fair competition in the country shall fall under the purview of the new law. But noteworthy point is that government/state owned entities are excluded from the operation of the new law.
The main objectives of the new law are promotion and protection of fair competition in the country. Secondly, protect medium and small business to ensure their profitability and continuance. Thirdly, maintain fair price and quality of commodities and services and thereby protect consumers’ rights. Finally, regulate any anti-competitive practice in the investment area of the Saudi Arabia.
The new law explicitly include under its fold anti-competitive practices such as dominant position by company thereby exerting monopoly effect on the relevant market or indulging in predatory pricing to retard the competition or construct barrier of new players in the market. Second, anti-competitive practice is economic concentration i.e merger, acquisition or de-merger thereby influencing the relevant commodity and geographical market through appreciable adverse effect. Lastly, cartel whether vertical or horizontal or conglomerate are brought under the purview of the BGAC which has anti-competitive effect.
The new law lays down provision with regarding to establishment of a specialized committee to settle the disputes under the new Competition Law as well as enforce penalties under the new Law. Also, the Board shall impose financial fines as per the breach committed by the entity.
With new law in force, the entities in Saudi Arabia have already started taking into cognizance that they may need to structure their operations in tandem with compliance required under the new law.