The new Competition Law (the "Competition Law") of the Kingdom of Saudi Arabia (the "Kingdom") was enacted by Royal Decree M/75 on 29/06/1440 Hijri (corresponding to 6 March 2019) and came into force on 24/01/1441 Hijri (corresponding to 23 September 2019). The Implementing Regulations of the Competition Law (the "Implementing Regulations") were issued by the Board of Directors (the "GAC Board") of the General Authority for Competition ("GAC") and came into force on 25/01/1441 Hijri (corresponding to 24 September 2019). The Competition Law replaced the previous Competition Law enacted by Royal Decree M/25 dated 4/05/1425 Hijri (corresponding to 22 June 2004).
This article provides a brief overview of some of the key provisions of the Competition Law and the Implementing Regulations.
Jurisdiction and Scope
The Competition Law and the Implementing Regulations apply1 to:
- all entities within the Kingdom, including:
- establishments and companies engaged in an economic activity in the Kingdom, whatever their legal forms, nationalities, sizes, and ownership; whether their license to practice the activity is still valid or otherwise; and whether they practice the licensed activity or a different one;
- an individual engaged in an economic activity whether or not he has obtained a license to practice his activity;
- all forms of entities and groupings when engaged in economic activities; and
- e-platforms, whether or not they are licensed to practice their activity; and
- practices occurring outside the Kingdom that have an adverse effect on fair competition within the Kingdom.
The Competition Law and the Implementing Regulations will not apply2 to a public establishment or state-owned company if it is solely authorized by the Saudi Government to provide goods or services in a particular field. Such exemption must be granted by a royal decree or a resolution of the Council of Ministers authorizing the relevant public establishment or state-owned company to be the sole provider of goods or services in a particular field.3 However, the provisions of the Competition Law and the Implementing Regulations apply to a state-owned company in fields other than the one in which it is solely authorized by the Saudi Government to provide goods or services.
GAC, GAC Board and GAC Committee
GAC is the regulatory body in charge of implementation and enforcement of the Competition Law and the Implementing Regulations. GAC has primary jurisdiction over any matters arising from the application of the Competition Law and the Implementing Regulations even in cases of conflict or overlap with the jurisdiction of other governmental bodies. 4 The Statute of GAC was approved by Resolution of the Council of Ministers number 55 dated 20/01/1439H (corresponding to 10 October 2017).
The GAC Board is authorized to amend, repeal or interpret the Implementing Regulations or issue guidance and rules supplementary to them. 5
The adjudication of violations of the Competition Law and the Implementing Regulations is assigned to the Committee for Adjudication of Competition Law Violations (the "GAC Committee").
Article 5 of the Competition Law prohibits practices (including contracts, whether written or oral, explicit or implicit) if their purpose or effect prejudices competition. Article 8(1) of the Implementing Regulations sets out an expanded definition of anti-competitive practices – all forms of behaviors and practices contrary to Article 5 of the Competition Law, including agreements, contracts, arrangements, or understandings between entities shall be prohibited, whether written or oral, explicit or implicit, if their purpose or effect undermines competition.
To see the full article click here
1 Article 3(1) of the Competition Law and Article 3 of the Implementing Regulations.
2 Article 3(2) of the Competition Law and Article 4(1) of the Implementing Regulations.
3 Such public establishments and state-owned entities are also exempt from reporting economic concentration transactions to GAC (Article 4(3) of the Implementing Regulations).
4 Article 3(3) of the Competition Law and Article 5(2) of the Implementing Regulations.
5 Article 89 of the Implementing Regulations.
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.