Competition Law

Purpose and scope

• Aims to protect and encourage fair competition and combat monopolistic practices that affect legitimate competition or consumers' interests (Article 2).
• It applies to all businesses in the Kingdom and to practices abroad that harm competition in the Kingdom (Article 3), and is enforced by the General Authority for Competition.

Key rules, rights and obligations

• Prices of goods and services follow market rules and free competition, except as excluded by decision (Article 4).
• Agreements and practices between businesses, written or oral, express or implied, that aim at or result in harming competition are prohibited, including price fixing, sharing markets or customers and bid rigging (Article 5).
• A dominant business may not abuse its position, for example by selling below cost to drive out competitors, or discriminating between customers in prices and terms without justification (Article 6).
• The Authority must be notified at least ninety days before completing an economic concentration (merger or acquisition) where the parties' sales exceed the threshold set by the regulation (Article 7).
• The concentration may be completed only with the Authority's written approval or after ninety days from notification without objection (Article 11).
• Obstructing officers, withholding information, misleading them or destroying documents is prohibited (Article 16).

Violations, penalties and common problems

• Breach of Articles 5, 6, 7 and 11: a fine of up to 10% of total annual sales concerned, or SAR 10 million if sales cannot be assessed, or up to three times the gains made (Article 19).
• Obstructing investigation: a fine of up to 5% of annual sales or SAR 5 million (Article 19).
• The fine may be doubled for a repeat within three years, and the decision is published at the violator's expense (Article 19).
• Breach of any other provision of the law or regulation: a fine of up to SAR 2 million (Article 20); the Board may order the violator to remedy the breach within a set time (Article 21).
• Anyone harmed by a prohibited practice may claim compensation before the competent court (Article 25).

Procedures and key deadlines

• Violations are decided by a committee formed by the Authority's Board (Article 18); its decisions may be challenged before the competent court within thirty days of notification (Article 18).
• A business may request exemption from some prohibitions where this improves market performance or consumers' interests (Article 8).
• Review distribution and pricing agreements and acquisition deals before concluding them to check whether notification is required.

An advisory summary prepared by Al-Bayan Al-Wadih Law Firm. It is not an official text and does not replace the law, its implementing regulations, or advice from a specialised lawyer. The official published text and its amendments prevail.