Recent economic reforms in the Kingdom of Saudi Arabia have also resulted in an influx of direct foreign investment and a flurry of new merger and acquisition activity. In response, Saudi Arabia's General Authority for Competition (GAC) has updated its merger control regime and increased enforcement activity to discourage and penalize anti-competitive practices in the Kingdom.
As the leading mergers and acquisitions law firm in Saudi Arabia, AlGhazzawi & Partners regularly advises domestic and international clients on competition, World Trade Organization, and anti-trust matters in the Kingdom. Our 50+ year history coupled with our reputation amongst regulatory authorities allow us to gain clarity on the rapidly evolving competition and anti-trust laws in the Kingdom which we immediately utilize to the benefit of our clients.
Competition and Anti-Trust Enforcement is on the Rise
Saudi Arabia's General Authority for Competition (GAC) has become a powerful enforcement agency in the Kingdom. The new Competition Law which came into effect late 2019 is wide reaching with regards to anti-competitive practices and merger control rules. As a result, the number of anti-competitive complaints, investigation, and sanctions have risen sharply in recent years.
The threshold at which "economic concentration" concerns must be assessed by GAC is relatively low. It includes any transaction within a sector where the total sales of all participants combined exceed SAR 100 million (~USD $26 million). New market entrants often underestimate their exposure to anti-trust risk.
According to the GAC, the most common anticompetitive practices attracting penalties in Saudi Arabia are price fixing, retail constraints, market allocation, exclusive dealing, and bid-rigging in government tenders. Other issues cited include misleading customers practices and lack of cooperation during GAC investigations.
It is increasingly evident that domestic and international companies contemplating transactions that may place them in the crosshairs of Saudi competition regulators must seek specialized advice to assess their risks and understand their notification and filing obligations.
Our experienced Competition and Anti-Trust Practice Group provides prudent guidance on
- Evaluating current "economic concentration" concerns and assessing existing risks
- Performing competition risk assessments for potential mergers and acquisitions
- Assessing notification and filing requirements to GAC
- Engaging in informal discussions with GAC for non-binding, anonymous guidance
- Seeking formal GAC approval on transactions that fall within its scope
- Defending clients against antitrust and monopolistic practices complaints and sanctions
- Providing competition and anti-trust compliance training to internal teams
It is important to note that the Competition Law not only applies to entities operating in Saudi Arabia, but also to practices taking place outside the Kingdom that may be detrimental to fair competition in the Kingdom.
About Our Competition & Anti-Trust Legal Team
Our legal team has more than five decades of experience with complex competition and anti-trust matters involving both local and cross-border transactions in all key sectors of the economy. We help our clients remain compliant and defend their interests against anti-trust complaints.
Notable Competition and Anti-Trust matters include
- Working with a large multinational giant engaged in manufacturing on the amalgamation of nine large companies into one, involving very close interaction with the Competition Agency and fulfilling extensive legal documentation.
- Guiding a major travel industry service provider on their compliance with the competition regulation in the Saudi market.
- Aiding a leading international tobacco manufacturer on their compliance with regulations regarding competition.