Insights on GAC’s enforcement actions

The Saudi Arabian General Authority for Competition (GAC) has most recently released its annual report for 2022 (the Annual Report), shedding light on the enforcement actions taken against violators of the Competition Law (Royal Decree No. M75/1440 and its Implementing Regulations (issued by the Board of Directors of the GAC on 24/09/2019, as amended from time to time). These statistics offer valuable insights into the evolving landscape of competition regulation in Saudi Arabia.

Enforcement actions overview

The Annual Report reveals a significant increase in enforcement activities compared to the previous year. In 2022, GAC issued 147 notices for the collection of financial penalties, marking a remarkable 194% increase from the previous year’s figures. Despite the surge in notices, there were no publications of penalties against non-compliant establishments based on final decisions/judgments in 2022, unlike in the preceding year.

Financial penalties and collection operations

While the number of collection operations remained consistent between 2022 and 2021, the total amount collected in fines experienced a slight decrease. In 2022, GAC collected 90,566,313.70 Saudi Riyals in fines, representing an 11.3% decrease compared to the previous year’s collection. Additionally, the total amount of financial penalties issued against violators of the Competition Law in 2022 amounted to 89,850,482 Saudi Riyals.

Breakdown of enforcement actions

A closer look at the enforcement actions reveals a diverse range of violations targeted by GAC. Violations such as price control agreements, market sharing, exploitation of dominant positions, and collusion in bidding were met with substantial fines. For instance, fines totaling millions of Saudi Riyals were imposed on entities found guilty of collusion in bidding, exploitation of dominant positions, and other anti-competitive practices.

Key takeaways from GAC’s annual report

In addition to the enforcement statistics, GAC’s Annual Report provides valuable insights for legal practitioners and businesses alike. The report underscores the authority’s commitment to combatting anti-competitive behaviour and ensuring fair market practices. Key takeaways from the annual report include:

• Vigorous enforcement efforts targeting a wide range of anti-competitive practices.
• Notable increases in fines imposed for violations of the Competition Law.
• Emphasis on transparency and accountability in enforcement actions.

Conclusion

The Annual Report from GAC offer valuable insights into the enforcement landscape and regulatory priorities in the Kingdom. As legal practitioners, it is essential to stay informed about these developments to better serve our clients and navigate the evolving regulatory environment.
 
Authored by: Edoardo Betto*, Sophia Niazi
*Member of ZH Partners – Relationship firm in Saudi Arabia