Latest Executive Rules on Competition Law from Oman

Latest Executive Rules on Competition Law from Oman

Ministerial Resolution Number 18 of 2021, the executive regulations of the Law on the Protection of Competition and Prevention of Monopoly ('Regulations'), supplementing Royal Decree Number 67 of 2014 ('Competition Law'), has been issued by the Oman Ministry of Commerce, Industry and Investment Promotion. The Rules, which were placed into force on 25 January 2021, describe the meaning of the Oman Competition Legislation.

The Regulations would be of concern and significance to investors acquiring goals with a physical existence in Oman and to major consumer-oriented undertakings supplying goods and services to the Omani industry.

Economic Basis:

Legal practitioners in Oman have been accustomed to the document demands requested by the Competition Authority in Oman when advising on the competition law aspects of major M&A transactions affecting an Omani subject. The Regulations now explain the information and materials required if an application for the establishment of an economic concentration pursuant to Article 11 of the Competition Law is made.

Relevant statistics, including information about main rivals, the impact of the economic concentration on the sector involved and the rationale for the economic concentration, such as whether the national workforce is likely to be impacted by the deal, would be sought in addition to the general market share details. Information of permits or clearances received in other countries from antitrust authorities may also be sought. The Ministry of Commerce, Industry and Investment Promotion will regard the following considerations as part of its decision-making process:

• The effect on competitiveness within the related sector of an economic concentration;
• Competitiveness in the related industry, whether real or possible;
• Facility of entry to the specific sector / unique barriers;
• Influence on costs, competition and technical competence in the business concerned;
• Contributions to the promotion of trade, exports and domestic added value (including job creation); and
• Consumers' interests.

The Regulations reaffirm the stance taken under the Competition Law, which is that the decision-making process requires up to 90 days after all the documentation and evidence submitted have been filed. It is necessary to acknowledge that if records have been sought but not issued, this 90 day duration will be 'frozen,' meaning that the final decision-making process is likely to extend 90 days. Appeals can be filed against a judgment taken according to the Regulations and the Law of Competition within 60 days of the decision being given.

Market factors: Geographical and product:

From the point of view of the consumer, the Competition Law aims to prohibit the introduction of such actions that would have a detrimental impact on the Omani economy, either by the execution of deals or through one or more dominant market actors. Clearly recognizable actions, such as price collusion, predatory selling and re-sale price fixing, are examples of such behaviour.

In order to decide if such action falls beyond the scope of the Competition Legislation, it has always been important to determine the relevant market when determining the impact of the offending actions, and the Regulations include guidelines on how the relevant market, comprising the geographical market and the commodity market, is determined:

1. Factors such as the ease with which new entrants will enter the market and the preference of consumers for those goods can decide the geographical market; and
2. Factors such as the speed with which a customer can be redirected from one commodity to another due to price fluctuations and changes encountered by the consumer that disclose substitute goods can decide the relevant product market.

It is noteworthy that the Regulations specify that input from consumers and rivals will be weighed when assessing whether the applicable regional market or the relevant commodity market.