SAUDI ARABIA Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Khaled al-Khashab and Shahad Al-Humaidani, GLA & Company
tion, technological development or innovative efficiency; • benefit consumers to a degree that outweighs the negative effects from the restriction of competition; and • does not enable the undertaking(s) benefiting from the exemptions to exclude competition or competitors from any market. All three conditions must be met for an exemp - tion application to be approved. In addition to these conditions, the board may also consider any other factor relevant to assessing the degree of restriction of competition, along with the ben - efits, resulting from the exemption. Failing Firm While the GAC does not provide for a waiver or exemption for a failing firm under the KSA Competition Law, it does take this aspect into account in its assessment. Where one of the par - ties to the economic concentration is a failing firm, the GAC may decide that an economic con - centration which would otherwise cause compe - tition problems may nonetheless be approved if the failing firm would be likely to exit the market even if the economic concentration does not take place. The basic requirement for a “failing firm defence” is that the deterioration of the competitive struc - ture that follows the economic concentration will take place with or without the economic con - centration and therefore cannot be said to be caused by the economic concentration. The GAC will generally only consider a “failing firm defence” to be appropriate if the economic concentration parties can demonstrate all three of the following criteria:
• that it is highly likely or inevitable that the allegedly failing undertaking would, in the near future, be forced to exit the market because of financial difficulties if it is not taken over by another undertaking; • that the assets of the failing firm would also be highly likely or inevitable to exit the market if they do not participate in an economic con - centration; and • that there is no less anti-competitive alterna - tive purchase or other alternative to the noti - fied economic concentration. The onus is on the relevant parties to provide the GAC, in due course, with the “failing firm defence”, with all the relevant information neces - sary to demonstrate this. 2.15 Circumstances Where Implementation Before Clearance Is Permitted There are no circumstances where the authori - ties will permit closing before clearance or an exemption. It may be possible to carve out the businesses or assets in Saudi Arabia and implement global closing to the extent the clos - ing does not have a sufficient effect (see 2.8 Foreign-to-Foreign Transactions ) on the Saudi Arabian market. However, GAC approval may be required.
3. Procedure: Notification to Clearance 3.1 Deadlines for Notification
With respect to the notification required in the event the KSA Competition Law and the Execu - tive Regulations are applicable to a specific eco - nomic concentration, the relevant participants must notify the GAC 90 days before the comple - tion of the economic concentration.
496 CHAMBERS.COM
Powered by FlippingBook