SAUDI ARABIA Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Omar Halbouni and Shahad Al-Humaidani, GLA & Company
assessment in practice, there is no formal exemption on this basis. Dominance in a relevant market can be demonstrated if one or both of the following criteria are achieved. • A market share of 40% or more of the relevant market, whether it is the share of a single firm or a group of firms, whenever that group acts with a common will in committing the violation or causing the effect. • The ability to influence a relevant market, such as controlling prices, production or demand, whether it is the ability of a single firm or a group of firms, whenever that group acts with a common will in committing the violation or causing the effect. 4.3 Reliance on Case Law There is no indication that the GAC relies on case law with respect to issues such as market definitions from other jurisdictions. While the GAC’s analytical approach is generally aligned with international best practices, its assess - ment is conducted on a case-by-case basis and is closely tied to the specific facts and market conditions of each transaction. Prior market-definition determi - nations may provide only limited guidance and cannot be fully relied upon. 4.4 Competition Concerns The GAC will generally consider the following catego - ries of economic concentration. • Horizontal concentrations: these involve concen - trations of actual or potential suppliers of substitut - able goods or services, typically operating on the same or a comparable functional level of the sup - ply chain and therefore commonly a concentration of competitors in the same market. • Vertical concentrations: these involve undertak - ings that operate or potentially operate, at different functional levels within the same vertical supply chain. This is commonly where the output in one market is an input into production in the other market. They are therefore not commonly in direct competition with each other in any market.
• Conglomerate concentrations: these involve undertakings that operate or potentially operate, in different markets. They are not in the same vertical supply chain but supply goods or services that are in some way related to each other, eg, products that complement consumers or production. In assessing these concentrations, the GAC exam - ines whether the transaction may give rise to unilat - eral effects, including the removal of an important competitive constraint between the parties, leading to higher prices or reduced quality, innovation or con - sumer choice. The GAC may also consider coordinat - ed effects, particularly in concentrated markets where the transaction may increase the likelihood of tacit or explicit coordination between competitors. In addi - tion, the elimination of a potential competitor may be relevant where one of the parties represents a credible future competitive constraint. For vertical concentrations, the GAC considers wheth - er the merged entity would have the ability and incen - tive to foreclose competitors, including by restricting access to key inputs or customers. For conglomer - ate concentrations, the GAC may assess whether the merged entity could leverage market power across related markets, including through bundling, tying or portfolio effects. 4.5 Economic Efficiencies The GAC assesses the effect of economic concen - trations on competition, competitive constraints and market efficiency, rather than on the efficiency of indi - vidual entities. The consideration of efficiencies is relevant to the competition assessment if and only if, the efficien - cies are likely to result in lower or not significantly higher, prices, increased output and/or higher quality goods or services. In this case, the conclusion may be that the economic concentration may not substantially reduce competition. For the GAC to take efficiency claims into account in its assessment of an economic concentration and to be in a position to reach the conclusion that, as a result of efficiencies, the economic concentration is
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