KUWAIT Trends and Developments Contributed by: Abdulwahab Sadeq, Adel Alasousi, Ali Boshehri and Barak AlAjeel, Meysan
may need to revise its enforcement strategy to withstand judicial scrutiny. II) Broader impact on enforcement The judgment may prompt legislative reform of the Competition Law, particularly its penalty framework. It also signals to businesses that Kuwait’s judiciary is willing to scrutinise regulato - ry overreach, thereby reinforcing the importance of due process and proportionality in administra - tive enforcement. Substantive review of transactions In assessing an “economic concentration”, the CPA considers the: • impact on competition in the relevant market; • effects on prices, innovation and consumer welfare; • possibility of increased efficiency and reduced costs; and • entry barriers and market shares of the par - ties. These assessments are often opaque, with little published reasoning in clearance decisions. Third-party objections Notices of the transaction are published in two daily newspapers and on the CPA’s website. Third parties may object within 15 days. This period (plus the time taken to resolve objections) is excluded from the statutory review window. Legislative gaps and proposed reforms Based on comparative research and practical experience, several shortcomings in Kuwait’s competition framework have been identified. These shortcomings are as follows.
• Lack of clear definitions (eg, “unfair competi - tion”, ”control”). • Overly broad language around “price fixing” and ”collusion”. • Absence of “de minimis” exemptions for transactions with limited market impact. • Vague tests for defining the relevant product and geographic market. • Excessive fines based on gross revenue, without regard for harm. • Lack of clarity around gun jumping provisions. It has been recommended that: • thresholds be raised in line with regional norms; • “control” and ”relevant market” be defined more precisely; • fast-track review procedures be introduced for low-risk transactions; and • fines be limited to actual economic impact or tiered penalty structures be adopted. There have been discussions within Kuwait’s legislative bodies about potential amendments to address some of these gaps, particularly fol - lowing the Constitutional Court ruling. Industry stakeholders have been advocating for the intro - duction of a fast-track procedure for transac - tions that clearly pose no competitive concerns. Impact on M&A activity and foreign investment The practical effect of the CPA regime has been to lengthen deal timeframes, deter foreign investment and increase regulatory risk. Filing requirements apply to many global transactions that have minimal or no effect on Kuwaiti com - petition. I) Case study
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