SAUDI ARABIA Law and Practice Contributed by: Zain Satardien, Chadi Hourani and Hayel Hourani, Hourani & Partners
6.3 Remedies and Commitments The GAC has the authority to impose remedies and commitments on parties involved in “economic con - centration” transactions to address potential anti- competitive effects while preserving the pro-compet - itive benefits of the merger. Remedies may be either structural or behavioural to prevent harm to market competition and consumer interests. Structural remedies often involve the divestiture of specific assets, business units, or shareholdings to reduce market concentration or eliminate overlaps between merging entities. Behavioural remedies, on the other hand, may include commitments to provide non-discriminatory access to essential infrastructure, maintain existing supply agreements, or refrain from exclusive dealing practices that could foreclose com - petitors. 6.4 Antitrust/Competition Enforcement See 6.1 Applicable Regulator and Process Overview , 6.2 Criteria for Antitrust/Competition Review and 6.3 Remedies and Commitments . The GAC’s decision to block or otherwise challenge FDI either before or after the investment is binding and final unless overturned through an appeal. The ultimate decision-making authority rests with the GAC’s board of directors, which evaluates recom - mendations from technical committees. If an inves - tor disagrees with a GAC decision, they may pursue an appeal under Saudi Arabia’s judicial system. The appeal must be filed within the time limits specified by Saudi Arabian procedural laws. 7. Foreign Investment/National Security 7.1 Applicable Regulator and Process Overview See 1.2 Regulatory Framework for FDI and 2. Recent Developments and Market Trends . 7.2 Criteria for National Security Review The MISA and other relevant authorities evaluate FDI applications using several key criteria, focusing on
such sales, up to SAR10 million. Alternatively, it may impose a fine of up to three times the profit realised from the violation. The GAC may also order behav - ioural or structural remedies, including divestiture of assets or shares, termination of control, daily coer - cive fines until compliance is achieved, and, in serious cases, temporary closure of the offending business, in addition to publishing decisions once final. 6.2 Criteria for Antitrust/Competition Review The GAC investigates potential anti-competitive effects arising from a merger or acquisition transac - tion, with the factors considered varying based on the type of combination. The GAC assesses potential concerns such as: • whether the transaction could increase prices or reduce output unilaterally due to diminished com - petition; • the potential for the transaction to facilitate collu - sion or co-ordinated behaviour among competi - tors; • evaluating the merged entity’s market share and market concentration; • analysing whether new competitors could feasi - bly enter the market to mitigate anti-competitive effects; • assessing whether significant buyers have the abil - ity to resist price increases or reduced output; • the degree of competition in the market and the likelihood of entry or expansion by other firms; • foreclosure of access to key suppliers or custom - ers, potentially excluding rivals; • the ability of the merged entity to control prices, output, or innovation; • creation of barriers to entry through control of essential resources or distribution channels; • whether the transaction may create portfolio effects that could harm competition, such as lev - eraging dominance in one market to gain an unfair advantage in another; and • potential efficiencies generated by the transaction, such as cost savings or innovation benefits, and whether these outweigh potential harms.
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