The General Authority for Competition warns of violations with a fine of up to 10 million riyals
The General Authority for Competition clarified that the application of the competition system has many benefits that are reflected on the local economy, specifically small and medium enterprises, as it supports innovation, quality, and consumer service in general, warning against all phenomena that violate the principle of competition such as monopoly, restrictive agreements, and failure to report economic concentration.
This came during a workshop organized by the Asharqia Chamber in cooperation with the Federation of Saudi Chambers and the General Authority for Competition, Thursday, November 11, 2021, under the title (The Impact of Private Brand Practices). Reducing the harmful effects of monopoly on the economic and social system, seeking to create a competitive environment that attracts investments, providing continuous and balanced development of economic activities, as well as distributing economic resources and achieving competitive prices and quality, as well as enabling small and medium enterprises to participate in economic activities and achieve prosperity. To the consumer by stimulating creativity and dedication in providing goods and services at competitive prices and high quality.
He warned more phenomena that contradict the principle of competition because they reduce incentives for quality and innovation, contribute to the exclusion of competent competitors, and provide the opportunity to exploit the consumer situation and raise the financial cost, as well as the presence of these phenomena does not achieve justice and does not optimally distribute resources and limits the benefits resulting from competition in development. It restricts the market economy and reduces public confidence in market competitiveness.
Accordingly, Al-Muzid lists an examples of practices that violate the competition law, including agreements restricting competition (which are written or unwritten coordination agreements aimed at disrupting competition), and the abuse of the dominant position (which is an illegal practice that aims to influence prices, such as selling at a lower price, Or discrimination in dealing between establishments without an objective reason, linking a commodity to a commodity, or stipulating not to deal with a specific establishment, etc.), and failure to report economic concentration (which is every act that results in a total or partial transfer of ownership of assets, rights, shares, shares or obligations establishment to another facility through acquisition, merger, ownership and joint venture) stressing that these violations require financial fines ranging between 5 and 10% of the annual sales subject of the violation, or not exceeding 10 million riyals in the event that it is impossible to estimate these sales, as well as defamation penalty.
For this part, legal specialist Rahaf bint Bakheet Al-Madraa revealed the results of a study of fees and conditions for displaying products in the retail sector and their impact on competition in the Saudi market, including the call to encourage consumer cooperative societies, and the allocation of no less than 2% of the shelf space in the retail market for marketing products. Small and medium enterprises, exempting these establishments from any fees in the first year, and reducing them by 50% in the following two years.
It is noteworthy that the General Authority for Competition is an independent body directly linked to the Prime Minister, concerned with protecting and encouraging fair competition, combating monopolistic practices that violate legitimate competition and preserving the competitive environment of the business sector within the framework of justice and transparency of the local market. Among the most prominent competencies of the authority is the periodic control of the markets to ensure the application of fair competition rules, receiving complaints, communications, and referrals regarding violations of the competition law, and initiating the study of the market and sectors in the event of violations of the competition law or a desire to promote competition in them, receiving and studying economic concentration notifications and issuing the necessary decisions conducting investigation and research procedures, collecting inferences, investigation and public prosecution in anti-competitive practices.
