SAUDI ARABIA Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Omar Halbouni and Shahad Al-Humaidani, GLA & Company
In general, economic concentration parties are encouraged to begin discussions with the GAC as early in the process as possible. When an economic concentration raises competition issues at the outset or during a review, the economic concentration parties may decide to offer remedies to the GAC. If the GAC accepts that the remedies are sufficient to address the competition concerns in that case, it may approve the economic concentration, provided the proposed remedies are implemented, rather than block it. 5.5 Conditions and Timing for Divestitures A divestiture remedy will normally specify the: • scope of the divestiture package, such as the assets or businesses (or parts of businesses) to be disposed of; • process for selecting a purchaser; and • process for disposal, including the required time - frame. Parties may not complete a transaction before rem - edies are complied with. The GAC maintains a role in relation to remedies and conditions accepted with respect to economic con - centrations, including: • monitoring parties’ compliance with commitments; and • investigating suspected breaches and enforcing remedies and conditions, including, where appro - priate, legal action. Non-compliance or breach of an agreed remedy is a violation of the KSA Competition Law. • Where the economic concentration parties breach an obligation under the conditions, the GAC may revoke its approval decision. In some cases, such as when a required divestiture is not made within the required timeframe, the GAC’s decision to approve the economic concentration subject to conditions may lapse because the required condi - tion was not fulfilled. This and comparable breach - es of the conditions, may subject the economic
concentration parties to fines under Article 19 of the KSA Competition Law. • The economic concentration parties may also be subject to fines under Article 20 of the KSA Com - petition Law and other measures under Article 21 of the KSA Competition Law, including requiring the economic concentration parties to unwind the economic concentration. The GAC will also take into account all other relevant provisions of the KSA Competition Law and the Implementing Regu - lations when setting fines and other measures, including, but not limited to, Article 22 of the KSA Competition Law and Chapter 7 of the Implement - ing Regulations. 5.6 Issuance of Decisions A formal decision permitting or prohibiting a transac - tion may be issued to the party by the GAC. If the 90-day investigation period lapses without the GAC issuing a decision, it will be deemed approval under the KSA Competition Law. All application decisions are made public (as a statistic in the GAC annual report). However, the names of the parties are not included unless they are penalised. 5.7 Prohibitions and Remedies for Foreign-to- Foreign Transactions The KSA Competition Law and the Implementing Reg - ulations apply to economic concentrations that affect competition within KSA, including foreign-to-foreign transactions that meet the applicable jurisdictional thresholds. While the firm is not aware of the GAC having pro - hibited a foreign-to-foreign transaction or imposed remedies specifically related to such transactions, the GAC has jurisdiction to review and intervene in foreign-to-foreign concentrations that may adversely affect competition in the relevant market in KSA.6 Ancillary Restraints and Related Transactions
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