Frequently Asked Questions

These Questions and answers aim to give a general idea on the competition law and implementing Regulations in Saudi Arabia and they are not alternative nor legal construction of the Law or its Implementing Regulations.
The Competition Law aims to protect and encourage fair competition and combating monopolistic practices breaching competition (Article One), The Competition Law was issued under the Royal Decree No. (M/25) dated 4/5/1425H to abide by voluntarily, and to enhance maintaining a competitive environment of business sector in a frame of fairness and transparency for markets, which in their turn enable the firms to compete freely and allow consumers the possibility of having the benefits expected from competition. Thus, the Competition Law is the legal basis of applying competition policy in Saudi Arabia.
The provisions of the Competition Law are applicable to all firms (factories, establishments and companies) engaging in (commercial, agricultural, industrial or service) activities in Saudi markets (Article Two). 
The Law has excluded public institutions and companies wholly owned by the Government. However, as for exemptions, the Council of Competition may decide – according to the certain rules – some exemptions for some practices and agreements in violation of the Law, which are deemed to improve performance of firms and to achieve benefit to the consumers exceeding the effects of limiting the freedom of competition. (Article Three and Four). .
The General Authority for Competition is an independent authority and is responsible for the application of the Competition Law. The law stated in article 4 to form a board of directors headed by a president whom appointed by a royal decree, with a membership of four representatives from governmental authorities and four members who shall be elected for capacities thereof. The Governor shall be the executive officer for management of the Authority, in addition to undertaking affairs thereof.

1) Approve draft general plans and policies, as well as laws of competition and submitting the same according to the related legal procedures.

2) Determine the goals and policies, which the Authority may adopt to achieve purposes thereof, as well as adoption of necessary programs and supervision over the execution thereof.

3) Issue the Regulations, as well as the rules and procedures indicated in Section (1) of Third Article of the Statute.

4) Adopt the internal financial and administrative bylaws of the Authority, provided that such bylaws shall include determination of the conditions for appointment as well as remuneration, benefits, rights, commitments, and job practices of Authority’s employees.

5) Approve taking actions of inquiry, research, collecting evidences, as well as investigation to reveal practices and violations that prejudice competition.

6) To approve on proceeding with lawsuits related to anti-competitive practices and undertaking the necessary legal actions, except for violations related to the disclosure of classified information by board members or the staff of the Authority.

7) Name employees who have power of enforcement regarding application of the provisions of the Law.

8) Name Investigators and Public Prosecution Representatives regarding application of the provisions of the Law.

9) Approve reconciliation with violating facilities according to provisions of the Law and Regulations.

10) Settle the applications of economic concentration, according to provisions of the Law and Regulations.

11) Adopt the organizational structure of the Authority.

12) Form permanent or temporary committees from members thereof or for others, which shall be assigned with tasks as might be deemed appropriate. Resolution of formation shall determine the chairman as members of each committee, in addition to competencies and term for execution of the tasks thereof.

13) Approve the establishment of offices for the Authority within the regions as may be needed.

14) Appoint one auditor (or more) for the accounts of the Authority, and determine remuneration thereof.

15) Approve the Board’s annual draft budget, final account, Auditor’s report and annual report, in preparation for submitting the same according to the legal procedures.

16) Determine the financial return for the services provided by Authority.

17) Give opinion regarding laws, policies and decisions related to competition.

The Board may delegate some of the tasks above mentioned to the Governor as may be required by work progress within the Authority, provided that the same shall occur only through written resolution and for a specified period.

 Practices or agreements (vertical or horizontal) or contracts between competing firms or such those possibly be competitor are prohibited, whether contracts are written or verbal, explicit or implicit, if the purpose of such practices or agreements or contracts or impact resulting thereto restricts the trade or of violation competition among firms.
  Firms which have a dominant position in the market are banned from carrying any practice restricting competition between firms especially:
1- Prices Controlling increasing, decreasing, or fixing, which are detrimental to competition.
2- Limiting flow of goods and services to markets totally or partially through hiding or without the right them, or refraining from dealing with them.
3- Creating sudden abundance in goods and services so that their circulation leads to untrue price, affecting the rest of those dealing in the market.
4- Preventing any firm from using its right to access or exit the market, or impeding that at any time.
5- Hiding goods and services available in the mark from a particular firm or firms.
6- Allocating markets for sales or purchases to geographical regions or distribution centers or customers' type or seasons and period.
7- Influencing the normal price of sale or purchase or supplying whether in governmental and non-governmental competition or auctions.
8- Blocking manufacturing, development, distribution, marketing operations and all other investment aspects, or limiting it.
9- Selling goods or services at price lower than the cost, aiming to take competitors out of the market.
10- Imposing restrictions to goods or services supply with the aim of creating shortage in product availability for prices increase.
11- Imposing special terms to sale or purchasing operations or on dealing with other firm as placed in weak competitive position in relation to competing firms.
12- Refusing to deal with another firm without justification, in order to limit its entry into the market.

  The Law and the executive regulations have determined – including but not limited to – such banned agreements and practices. In addition, it is worth mentioning that firms have the right to enjoy its dominant position in the market in order to be able to compete effectively to face competitors locally and internationally, but they have no right to misuse its dominant position.
The Law applies the sanctions on violators as the following:
Anyone who violates a provision of the present law will be fined for no more than %10 of the total turnover or not exceeding 10 million. In case of recurrence, the fine shall be multiplied. If the violation is being continued after the issuance of the resolution or the judgment, the Council may suspend the activity of the undertaking tentatively for a period not exceeding one month or revoke the license permanently, subject to article (12).
Without prejudice to the penalties specified above, the Board of Directors may issue resolution by taking one or some of the following precautions when breach is proved to one of the provisions of this Law:
1- To assign the violator to correct its positions and to clear the breach within a period the executive regulations determines.
2- To assign the violator to dispose of some assets or stocks or property rights or to perform any act to clear the breach.
3- To impose the violator to pay daily financial fine not less than one thousand Riyal and not exceeding ten thousand Riyals until breach is cleared. 
Firms intending to participate in economic concentration (merger, acquisition, combining two or more management into one joint management, assets or property rights or usufructs or shares) causing them to be in dominant position should notify the Authority in writing prior sixty days at least of its completion. . The Law has ensured quick resolution in economic concentration requests through fixed periods.
The Law has pointed out the assurance of confidentiality of information as follows:
  The Authority's members and employees shall abide by maintaining confidentiality of information and records, which are obtained from firms during collecting evidence or investigations.
  Whoever discloses secrets related to his job, or has achieved a benefit directly or indirectly is penalized by financial fine not exceeding five million Riyals or prison with period not exceeding two years or both).
  Any of the Authority's members may not participate in deliberating any issue or case has interest or relation therein or has family relationship or relationship by marriage between him and one of the parties.
  Any firm may not hide any information under pretense of confidentiality or for any other reason.
In accordance with the Board's tasks (Article No. 7), violations to the provisions of this Law are controlled through any of the following methods:
A- The Authority's initiative:
The Authority takes actions of investigation and collection of evidences if there are indications that there are violations to the provisions of this Law.
B- Complaints received by the Authority:
The Authority takes actions of investigation and collection of evidences in addition to investigating the complaints submitted to it.
The Law has permitted the one in respect of whom the Board's resolution was issued to appeal it in accordance with the Board of Grievances Law and its Regulations.
The Law has clarified in its (Article Eighteen) that any natural or corporate person affected with damage resulting from practices banned under this Law, may apply for compensation before the competent judiciary.
Any natural or legal person can complain about any irregularity of the provisions of the competition through e-service ' complaint about irregularities ' via the website of the Council. Anyone can provide the Council with any suspicion or a note indicating possible violation committed by any one against the provisions of the Competition Law through toll free number 8004400033, or by e- mail, Note that complaints will not be considered as a formal complaint but to be taken for guidance.
The governmental competition and Procurement Law issued by Royal Decree No. (M-58) dated 4/9/1427 H regulate competitions for government contracts. The role of the Authority regarding competition for government contracts is defined in article IV, paragraph (7) of the Competition Law concerning the prohibitions of the law (Influencing the regular price of the offers of sale or purchase of goods and services or supplying to governmental or non-governmental tendering) It is stated in article 4 paragraph (6) of the regulations of the Competition Law and banning (collusion in bids or proposals in the competition), with regard to the terms, conditions, technical specifications and awarding projects, there are other government authorities responsible for that.
1- Dominance: Any firm or group of firms that are capable of influencing the prevailing market price by a certain percentage of the total price on offer for a particular good or service in an industry that they operate as stated in article 2 of the Competition Law.
2- As to the percentage in which a firm is regarded to be in a position of market dominance, article 18 of the implementation regulation states that it is "achieved when the market share of the firm or group of firms is at least (40%) of the total value of sales of goods or services for a duration of 12 months, or through the firm or group of firms capable of influencing the prevailing market price"