Competition Protection and Anti-Monopolistic Practices

In the application of the provisions of these regulations, the following words and phrases shall have the meanings indicated next to each, unless the context requires otherwise.

The Ministry: The Ministry of Economy and Commerce.

The Minister: The Minister of Economy and Commerce.

The Committee: The Committee for the Protection of Competition and Prevention of Monopolistic Practices.

Persons: Natural or legal persons, or any other legal entity, regardless of the form it takes, that engages in an economic or commercial activity.

Products: Goods and services.

Control or Dominance: The ability of a person or a group of persons acting together to control the products market and effectively influence prices or the volume of supply therein without their competitors being able to limit such influence.

Relevant Market: Consists of two elements, namely the relevant products and the geographic scope. Relevant products mean all products that are considered substitutes for one another, or that may replace one another from the perspective of the recipient of the service or goods, including products offered by competitors in other markets that are accessible to consumers. The geographic scope means the market comprising the geographic area within which conditions of competition are sufficiently homogeneous and within which sellers and purchasers of the products interact for the purpose of determining prices.

Without prejudice to the provisions of the applicable international treaties and agreements, economic and commercial activities shall be conducted in a manner that does not lead to the prevention, restriction, or harm of competition, in accordance with the provisions of this Law.

It is prohibited to enter into agreements, conclude contracts, or engage in practices that may prejudice the rules of competition, particularly the following:

1. Manipulating the prices of products subject to transactions by increasing, decreasing, fixing their prices, or by any other means.

2. Restricting the free flow of products into or out of markets, whether wholly or partially, by concealing them, refraining from dealing in them despite their availability to their holder, or storing them without justification.

3. Creating an artificial sudden abundance of products resulting in their circulation at a price that affects the economics of other competitors.

4. Preventing or obstructing any person from carrying on their economic or commercial activity in the market.

5. Withholding products available in the market, wholly or partially, from a specified person without justification.

6. Restricting production, manufacturing, distribution, or marketing operations, or limiting the distribution of services, their type or volume, or imposing conditions or restrictions on their provision.

7. Dividing or allocating product markets on the basis of geographic regions, distribution centers, types of customers, seasonal basis, periods of time, or on the basis of goods.

8. Coordination or agreement among competitors with respect to the submission of, or refraining from submitting, bids in tenders, practices, auctions, and supply offers.

This shall not include joint bids whose parties disclose such arrangement from the outset, provided that their purpose is not, in any manner whatsoever, to prevent competition.

9. Publishing false information about products or their prices while being aware of its falsity.

It is prohibited for persons holding a controlling or dominant position to abuse such position by engaging in unlawful practices, particularly the following:

1. Refusing to deal in products through sale or purchase, or restricting or obstructing such dealing, in a manner that leads to the imposition of an artificial price therefor.

2. Decreasing or increasing the quantities of a product available in a manner that creates an artificial shortage or surplus thereof.

3. Refusing, without legitimate justification, to conclude transactions for the sale or purchase of a product with any person, or selling products subject to its dealings below their actual cost, or ceasing to deal with such person entirely, in a manner that restricts such person's freedom to enter or exit the market at any time.

4. Imposing an obligation not to manufacture, produce, or distribute a product for a specified period or periods.

5. Imposing an obligation to exclusively distribute or sell a particular good or service to the exclusion of others on the basis of geographic regions, distribution centers, customers, seasons, or periods of time between persons having a vertical relationship.

6. Making the conclusion of a contract or agreement for the sale or purchase of a product conditional upon the acceptance of obligations or products that, by their nature or according to commercial usage, are unrelated to the original subject matter of the transaction or agreement.

7. Undermining equality of opportunity among competitors by discriminating between them in the terms and conditions of sales or purchase transactions without legitimate justification.

8. Refusing to make a scarce product available where such availability is economically feasible.

9. Obligating a supplier not to deal with a competitor.

10. Selling products at a price below their marginal cost or average variable cost.

11. Requiring persons dealing with it not to permit a competitor to use facilities or services needed by such competitor, notwithstanding that making such use available is economically feasible.

The Minister may, by a decision issued by him and upon the request of the interested parties, exempt from the scope of the prohibition stipulated in the two preceding Articles those bids, agreements, and contracts that restrict competition, where the interests of consumers so require.

The provisions of this Law shall not apply to the sovereign acts of the State, or to the acts of institutions, authorities, companies, and entities subject to the direction and supervision of the State.

A committee shall be established within the Ministry to be known as the “Committee for the Protection of Competition and Prevention of Monopolistic Practices”, which shall be affiliated with the Minister and shall comprise members possessing expertise in the economic, financial, and legal fields, as well as representatives of the ministries and concerned entities.

The Committee shall be constituted by a decision of the Prime Minister upon the proposal of the Minister.

The Secretariat of the Committee shall be undertaken by one or more employees of the Ministry, whose secondment, duties, and remuneration shall be determined by a decision of the Minister.

The Committee referred to in the preceding Article shall be responsible for the following:

1. Establishing an integrated database and information system on economic activity, and updating and developing it in a manner that serves the Committee's work in all fields related to the protection of competition and prevention of monopolistic practices, and conducting the studies and research necessary for that purpose.

2. Receiving reports concerning violations of the provisions of this Law, examining them, verifying their seriousness, and taking the appropriate measures in respect thereof.

3. Coordinating with counterpart bodies in other countries with regard to matters of common interest.

4. Issuing a periodic bulletin containing the decisions, recommendations, procedures, and measures adopted by the Committee, as well as other matters related to its affairs.

5. Preparing an annual report on the Committee's activities, future plan, and proposals, to be submitted to the Minister, with a copy thereof being submitted to the Council of Ministers.

6. Expressing its opinion on draft laws and regulations relating to competition and the prevention of monopolistic practices.

The Implementing Regulation of this Law shall determine the procedures to be followed by the Committee in investigating acts that involve or constitute a violation of the provisions of this Law.

The Chairperson, Vice-Chairperson, and members of the Committee, as well as the employees of the Ministry who are granted the status of judicial officers by a decision of the Attorney General in agreement with the Minister, shall have the authority to detect and establish offences committed in violation of the provisions of this Law. For that purpose, they shall have the right to enter and inspect the premises, shops, and establishments in which the violator conducts his activity, and to examine their documents and records.

Persons who intend to acquire assets, rights of ownership or usufruct, purchase shares, establish unions or mergers, or combine the management of two or more legal persons in a manner that results in control or dominance in the market shall notify the Committee. The Committee shall examine the notification and issue a decision thereon within a period not exceeding ninety days from the date of receipt of the notification. If such period expires without a decision being issued, the notification shall be deemed approved.

In all cases, the transactions that have been notified may not be completed until the Committee's decision is issued, or until the expiry of the aforementioned period without a decision being rendered on the application.

The provisions of the preceding Article shall not apply to mergers and acquisitions that the Committee determines contribute to economic progress in a manner that offsets any impairment of competition.

The Committee may revoke its decisions issued pursuant to Article (10) of this Law if it becomes apparent that the information submitted to it by the persons concerned was incorrect or was tainted by fraud or misrepresentation.

It shall be prohibited to disclose information or data relating to cases concerning the application of the provisions of this Law, or to use such information or data for purposes other than those for which they were provided.

Any person may report to the Committee any agreements, contracts, or practices that violate Articles (3) and (4) of this Law.

Where the Committee establishes a violation of any of the provisions set forth in Articles (3), (4), or (10) of this Law, it may require the violator to rectify its position and remove the violation immediately or within a specified period, without prejudice to the liability arising from such violations.

No criminal action may be instituted, nor may any procedures be taken in respect of the offences stipulated in this Law except upon the written authorization of the Minister or his delegate, based on the recommendation of the Committee.

The Minister or his delegate may settle any such offences before a final judgment is rendered therein, in return for the payment of an amount not less than twice the minimum fine and not exceeding twice the maximum fine.

The settlement shall result in the extinguishment of the criminal action.

Any person who violates the provisions of Articles (3), (4), or (10) of this Law shall be punished by a fine of not less than one hundred thousand Riyals and not exceeding five million Riyals.

In all cases, the court shall order the confiscation of the profits derived from the offending activity and any other gains obtained by the violator through unfair competition.

The person responsible for the actual management of the violating legal person shall be subject to the same penalties prescribed for acts committed in violation of the provisions of this Law, if it is established that he had knowledge thereof and that his breach of the duties imposed upon him by such management contributed to the commission of the offence.

The legal person shall be jointly liable for the payment of any financial penalties and compensation awarded, where the violations have been committed by any of its employees, in its name, or for its benefit.

The Minister shall issue the Implementing Regulation and the decisions necessary for the implementation of the provisions of this Law.

All competent authorities, each within its respective jurisdiction, shall implement this Law. This Law shall be published in the Official Gazette.