Overview
Competition law aims to prevent practices that harm fair market competition, such as restrictive agreements between competitors or abuse of a dominant position by a larger company, and the competent authority monitors these practices across the Saudi market as a whole.
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Major merger and acquisition deals specifically require an advance review of their impact on competition in the relevant market, and some deals may require formal notification to the competent authority before completion.
Regulatory Basis
The Competition Law and its implementing regulations set out prohibited practices and the threshold requiring notification to the competent authority for a given merger or acquisition deal.
The standards applied vary based on deal size and the parties' share in the relevant market, and the lawyers review these standards carefully before any major planned deal.
How We Assess Competition Impact
The lawyers begin by precisely defining the relevant market and each party's share within it, since assessing competition impact depends on defining the market correctly, not a general assumption.
If the deal requires notifying the competent authority, the lawyers handle preparing and submitting this notification and following it through to the final decision.
Who Needs This Service
A company planning a major merger or acquisition that needs to assess whether the deal requires notifying the competition authority before completion.
A company with a significant market share that needs its commercial practices reviewed to confirm no abuse of a dominant position.
Companies with significant market share need a proactive review of the exclusive distribution agreements they enter into, since certain exclusivity terms may be considered an unjustified restriction on competition if they exceed a reasonable duration or scope, a matter worth assessing before signing the agreement rather than after an inquiry from the competent authority.
Additional Considerations
Assessing competition impact in a major acquisition connects directly with the mergers and acquisitions service, as this assessment is typically included as part of structuring the overall deal.
For companies reviewing existing exclusive distribution agreements, this connects with the commercial agency and distribution service.
Common Questions
Does every merger require notifying the competition authority?
No, this depends on deal size and the parties' share in the relevant market, and the lawyers assess this specifically for each deal individually.
What counts as abuse of a dominant position?
This includes practices like imposing unfair contractual terms that exploit a significant market share, and the lawyers review each case specifically against Competition Law standards.