SAUDI ARABIA Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Omar Halbouni and Shahad Al-Humaidani, GLA & Company
5.2 Parties’ Ability to Negotiate Remedies The parties may propose structural or behavioural remedies. In most cases, remedies are proposed by the eco - nomic concentration parties at their discretion as a means of permitting a transaction to be approved subject to conditions rather than blocking the transac - tion altogether. In principle, the structure and content of the remedies offered to the GAC will therefore be a matter for the party offering the remedies. However, the GAC will only accept remedies as condi - tions if it is satisfied that they address the GAC’s com - petition concerns to a sufficient degree to allow the GAC to approve the transaction subject to those con - ditions. The GAC will generally provide detailed feed - back on the form and content of remedies proposed by the parties, including whether the GAC would be satisfied that they would sufficiently alleviate the com - petition concerns and, if not, what amendments to the proposed remedies would be required for the GAC to accept them. Economic concentration parties, therefore, have strong incentives to propose effective and enforce - able remedies to the GAC to alleviate the identified There is no specifically expressed legal standard for remedies. An acceptable remedy must adequately address and alleviate the potential harm to competi - tion created by the specific economic concentration. 5.4 Negotiating Remedies With Authorities Economic concentration parties are free to propose remedies to the GAC at any time throughout the trans - action review process, including: • at the outset of the review; • at the pre-notification phase; • at the moment of first notification; and • after the economic concentration parties have been advised of potential competition concerns during a review. competition concerns. 5.3 Legal Standard
unlikely to substantially reduce competition, the effi - ciencies have to: • benefit consumers; • be specific to the economic concentration; and • be verifiable. All of these conditions must be satisfied for the GAC to consider efficiencies in the context of its competi - tive assessment of economic concentrations. 4.6 Non-Competition Issues The GAC’s merger control framework is primarily com - petition-based. The factors set out in Article 22 of the Implementing Regulations focus on market structure, competitive dynamics, consumer welfare and the cre - ation or strengthening of market power or dominance. The Economic Concentration Review Guidelines indicate that, where a transaction is likely to have a negative effect on competition, the GAC may, prior to refusing the transaction, assess whether there are positive effects that outweigh the negative com - petitive impact or that support public interests in the national economy. The KSA Competition Law, the Implementing Regula - tions and the GAC Guidelines do not expressly include foreign investment or foreign subsidy considerations as part of the merger control substantive assessment. Any such considerations, where applicable, would arise under separate regulatory frameworks. 4.7 Special Consideration for Joint Ventures See 2.10 Joint Ventures . 5. Decision: Prohibitions and Remedies 5.1 Authorities’ Ability to Prohibit or Interfere With Transactions To the extent the transaction creates an economic concentration that sufficiently impacts the Saudi Ara - bian market, the GAC board has the authority to reject the notification filing, block the transaction or require it to proceed on specific conditions. The GAC has this authority under the KSA Competition Law and the Implementing Regulations.
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