Jordan: Economic Concentration – Jordanian Competition Law

Last Updated: 13 March 2009
Article by Firas Malhas

On August 2002, Jordan has adopted the first Competition Law, which was issued as a provisional law under the number 49/2002 and replaced by the current law number 33 for the year 2004. The Competition Law identified the relevant competition bodies in Jordan and tackled several issues related to competition. The main segments of the law cover anticompetitive collusions, abuse of dominant position, regulating mergers and acquisitions, and ensuring fairness of economic transactions.

The Competition Directorate at the Ministry of Industry & Trade was established in 2002 and entrusted with certain powers to execute and enforce the competition in. In addition to its role in the general competition plans and legislations, the Competition Directorate plays major role in promoting, protecting and encouraging free competition as well as issuing opinions on matters related to its activities. It is also empowered to gather information to uncover practices that restrict and distort competition and to conduct investigations into such practices as well as receiving and following up applications related to economic concentration, and prepare reports, recommendations and draft decisions in respect of such applications.

Economic Concentration is defined in the Competition Law as (Any activity resulting in the full or partial transfer of ownership of or interest in property or rights or shares or obligations of an Enterprise to another, and which may enable an Enterprise or a group of Enterprises to control, directly or indirectly, another Enterprise or group of Enterprises is considered an economic concentration operation).

The economic concentration transaction would require the approval of the Minister of Industry & Trade ("Minister") if it has impact on the level of competition in the market that exceeds 40% or more of the total local market transaction.

The Competition Law identified the filing requirements and procedures to obtain the approval of the Minister on the economic concentration transaction. The application for approving the economic concentration transaction ("Application") must be made by the relevant enterprises on the form adopted by the Ministry of Industry & Trade ("Ministry") within 30 days of the execution of an economic concentration transaction agreement or the execution of a preliminary economic concentration transaction agreement.

The Application must be accompanied with the following:

  1. Copy of the articles and memorandum of association of the relevant enterprises.
  2. draft of the agreement(s) related to the concentration.
  3. list of products and services supplied by the concerned enterprises and their shares thereof.
  4. report on the consequences of the operation and its positive impact on the market.
  5. financial statements of the concerned enterprises and their branches, if any.
  6. list of the shareholders of the concerned enterprises and their share.
  7. list of officers, manager and board members of each concerned enterprise.
  8. list of the branches of each enterprise.

If the concerned enterprises believe that negative impact will exist as a result of the economic concentration transaction, then they can identify the same in the Application.

Upon receiving the Application, the Competition Directorate shall issue a notice indicating the completion of file and documents ("Completion Notice"), and shall publish, in two daily newspapers, at the expense of the applicant, an announcement regarding the Application, upon which the Directorate invites the interested parties to express their opinion on the Application, provided that such opinions must be made within 15 days from the date of the announcement.

The Competition Directorate shall make its recommendations to the Minister in respect of the Application, and the Minister shall issue the decision in respect thereto within (100) days from date of the Completion Notice.

The Competition Law prohibited the enterprises involved in the economic concentration from conducting any actions or practices that may lead to rendering the economic concentration operation irreversible, or may alter the market structure. In case the relevant enterprises acts in a manner that violates the law, then their actions and practices can be annulled through a court decision.

The Minister may approve or reject the Application depending on its impact on competition. Also, the Minister may approve the Application on provisional basis, whereby the Minister will request from the relevant enterprises to comply with certain terms and conditions, which will be identified in his decision. In all cases, the decision issued by the Minister can be challenged before the Higher Court of Justice.

The approval of the Minister may be cancelled in case the concerned enterprises violate any of the obligations provided for in the Minister's approval or in case the information related to the Application is false.

If any entity or commission is aware of any economic concentration transaction that is subject to the Competition Law (i.e. has impact on the level of competition in the market that exceeds 40% or more of the total local market transaction), then such entity or commission must inform the Ministry with such transaction.

Although the umbrella of the Competition Law does not include the practices covered in other applicable laws (e.g. Telecommunications Law, Transport Law ...etc.), however the Competition Law provided for certain cooperation between the Ministry / Competition Directorate and the sectoral regulatory bodies as the case with the telecommunications sectors, transport sector and energy sector.

Article 12 of the Competition Law provides that (For the purpose of guaranteeing the freedom of competition by virtue of the provisions of the Competition Law, government authorities and sectoral regulatory bodies vested with monitoring any economic concentration operations by virtue of specific legislation thereto shall obtain the opinion of the Ministry of Industry & Trade within the limits of its jurisdiction stipulated in the Competition Law). To that effect the "Instructions on Competition Safeguards in the Telecommunications Sector" issued by the Board of the Telecommunications Regulatory Commission ("TRC") provides that (In all cases, the TRC shall act in accordance with Articles 9 (B, C, D) of the Competition Law).

In addition to the role of the Ministry/ Competition Directorate in the competition affairs, the Competition Law empowered the court of first instance to hear any case related to any violation of the Competition Law including the non-compliance of the concerned enterprises with the decision of the Minister in respect of the economic concentration transaction.

The Ministry of Justice nominated a public prosecutor from Amman Court of First Instance, who is specialized in the competition law and cases, to handle the competition cases and implement the provisions of the Competition Law. In all cases the Ministry shall be a party in all competition cases and it may submit any studies or comments to the court and request to continue hearing such cases.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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