EGYPT Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Hegui Taha and Farida Koura, GLA & Company
evaluates the competitive impact of a transac - tion based on the following key factors: • the structure of the relevant market(s), includ - ing the level of actual or potential competition from domestic and international players that could affect the market; • the financial and economic strength of the concerned persons compared to existing and potential competitors; • the available substitutes for suppliers, cus - tomers and consumers and their ability to access production resources or relevant mar - kets and the patterns of supply and demand of the relevant products; • the barriers to entry and expansion in the relevant markets; • the potential impact on consumers (eg, prices, choice) and actual or future invest - ments in the market; • the potential impact of the “economic con - centration” on innovation and development; and • the overall likelihood of the “economic con - centration” restricting competitive behaviour in the market is a decisive factor. 4.2 Markets Affected by a Transaction When it comes to the definition of relevant mar - ket, the relevant market under the Egyptian Competition Law is composed of two elements: the relevant product (good or service); and the relevant geographical area. • Relevant products are those that are effec - tive substitutes from the consumer’s point of view. The main illustrative criteria to consider one product as a substitute for another are the similarity in the specifications or usages of those products and the likelihood that consumers will switch from one product to another for changes in price or any other
competitive factors. A secondary criterion is whether the sellers make their business deci - sions based on the switching of consumers from the product due to price changes or any other competitive factors. • The relevant geographical area is the area where competitive conditions are homog - enous, taking potential competitive oppor - tunities into account. Under Article 6 of the Executive Regulations, two criteria are taken into account: (a) the ability of the buyer to move from the relevant geographical area to another in Egypt or abroad as a result of changes in pricing or other competitive circum - stances; and (b) the ability of the seller in Egypt or abroad to move to the relevant geographical area as a result of price changes or other com - petitive circumstances. Certain factors must be taken into account to evaluate the ability of the buyers and sellers: • transportation costs (including time spent and insurance fees); and • customs and other non-customs restraints. Despite the most recent amendment to the Executive Regulations, the competition con - cerns remain unaddressed to a large extent. 4.3 Reliance on Case Law The ECA is proactive when it comes to refer - ences to precedents and case law. There is a reliance on case law weighting in important and strategic sectors. 4.4 Competition Concerns Many competition concerns are connected to vertical and horizontal arrangements and abuse of dominance, particularly if the market share is
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