SAUDI ARABIA Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Omar Halbouni and Shahad Al-Humaidani, GLA & Company
impact of the transaction on prices, quality, innovation and development. 4.2 Markets Affected by a Transaction When assessing whether an economic concentra - tion substantially reduces competition, the GAC will examine the competitive effect of the transaction in the markets in which the concentration occurs. In defining markets by their product and geographic dimensions, the GAC focuses on two key elements of substitution. • The product dimension: substitution between prod - ucts is a central concept in defining the product dimension of markets. The GAC notes that, in this context, product includes goods, services and other equivalent economic outputs. • The geographical dimension: substitution between different locations of the relevant goods or services is a central concept in defining the geographical dimension of markets. The GAC notes that the geographical dimension in this context may be local, regional, national or wider in scope, including worldwide. When defining markets, the GAC will follow a general approach in most cases. • First, the products and geographical regions actually or potentially supplied by the economic concentration parties will be identified. This is the first step in identifying the markets that may be relevant in the analysis of the economic concen - tration. To help it do this, the GAC starts by con - sidering those areas of activity where competitive harm may occur, by considering the products and geographical regions in each case where there may be an overlap between the activity of the economic concentration parties or some other meaningful economic relationship, such as an actual or poten - tial vertical relationship. This is done on a case-by- case basis. In many cases, more than one potential market may be identified. • The GAC then considers the boundaries of those potential markets in their product and geographi - cal dimensions. A properly defined relevant mar - ket includes all those products and geographical
regions that are sufficiently close substitutes of the products and geographical regions first consid - ered. In addition, specific factors are specified in the Imple - menting Regulations. The Implementing Regulations stipulate that the GAC may act within its overall objec - tives of protecting and promoting competition within a market. These are as follows. • Structures of relevant markets and the level of actual or potential competition between under - takings in Saudi Arabia or abroad, which has an impact on local markets. • Financial positions of the parties to an economic concentration. • Commodity alternatives that are available to con - sumers, vendors and clients and how accessible these alternatives are. • Potential impact of the economic concentration on prices, quality, diversification, innovation or devel - opment in a relevant market. • Actual or potential harm or benefits to competition from the economic concentration transaction. • Supply and demand growth and trends in the rel - evant market and commodities. • Level of product differentiation. • Consumer interests and welfare. • Barriers to the entry or exit of new undertakings into a relevant market, their continuation therein or their expansion, including regulatory barriers. • The extent to which an economic concentration may create or strengthen a significant market power or a dominant position of an undertaking or group of undertakings, in any relevant market. • The level and historical trends of anti-competitive practices in a relevant market, whether for the par - ties to an economic concentration or for undertak - ings influential in the market. • Views of the public, economic concentration-relat - ed parties and sector regulators. There is no express market-share-based safe harbour or de minimis threshold under the KSA Competition Law, the Implementing Regulations or the GAC Guide - lines. The primary jurisdictional trigger is based on turnover thresholds. While low market shares or limit - ed overlaps may be relevant to the GAC’s competitive
531 CHAMBERS.COM
Powered by FlippingBook