Anti-Trust law No.3 of 2005

All companies continuously aim to enhance their competitiveness, and ultimately gain a prominent position in the market, allowing them to maintain their customers and maximize their profits. Competition drives companies to improve the quality of services and products that they provide to the local and global market, consequently, competition is crucial for companies as it incentivizes them to increase their investments, improve their services, and ultimately to cater to increased demand from the consumer, all whilst maintaining competitive pricing. 

The above however does sometimes lead to market monopoly, which has long been an obstacle faced by both companies and consumers. The legal definition for a monopoly in this context being 'a company which has a minimum market share of 25% (in their industry) as a result of it controlling a specific stock or a specific commodity. Monopolies enable companies to dictate their prices since there is no alternative for these goods/services, thus impeding the ability of companies to compete fairly and eventually leading to raised prices for consumers.

To combat the above, Law No.3 of 2005 was issued as Egypt's Law on Competition Protection & Prohibition of Monopolistic practices, which is implemented through the Egyptian Competition Authority ("ECA"). This Law is keen to encourage diversification of the Egyptian market, and increased economic activity, in a manner that does not lead to the prevention or restriction of commercial competition.

 According to article 5, the provisions of this Law shall also apply to acts committed abroad if they are likely to impede or damage competition in Egypt since this is now criminalized.

Specially, The Competition Protection Law  prohibits the following acts/agreements:

1- Agreements between competitors in the same market

2- Agreements between a person & his suppliers or clients

3. Practices of the dominant person in the relevant market

The provisions of this law do not apply to public utilities managed by the state, or to agreements concluded by the government to determine the price of one or more basic commodities, based on a decree from the Council of Ministers. The ECA may remove from the ban some companies subject to the provisions of the Private Law if such removal is in the interest of the public or if benefits to the consumer outweigh the effects of limiting freedom of competition in accordance with the regulations and procedures specified by the Executive Regulations of this law.

In conclusion, the state is taking steps to promote a diverse economic climate, based on fair competition and the principles of a free market, since encouragement of competition in the market ultimately leads to an increase in investments, economic efficiency, and sustainable goals for economic development.

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.