SAUDI ARABIA Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Khaled al-Khashab and Shahad Al-Humaidani, GLA & Company
4. Substance of the Review 4.1 Substantive Test
• First, the products and geographical regions actually or potentially supplied by the eco - nomic concentration parties will be identified. This is the first step in identifying the markets that may be relevant in the analysis of the economic concentration. To help it do this, the GAC starts by considering those areas of activity where competitive harm may occur, by considering the products and geographical regions in each case where there may be an overlap between the activity of the economic concentration parties or some other meaning - ful economic relationship such as an actual or potential vertical relationship. This is done on a case-by-case basis. In many cases, more than one potential market may be identified. • The GAC then considers the boundaries of those potential markets in their product and geographical dimensions. A properly defined relevant market includes all those products and geographical regions that are sufficiently close substitutes of the products and geo - graphical regions first considered. In addition, specific factors are specified in the Executive Regulations. The Executive Regula - tions stipulate that the GAC may act within its overall objectives of protecting and promoting competition within a market. These are as fol - lows. • Structures of relevant markets and the level of actual or potential competition between undertakings inside Saudi Arabia or abroad, in cases where it has an impact on local markets. • Financial positions of the parties to an eco - nomic concentration. • Commodity alternatives that are available to consumers, vendors and clients and how
The substantive test employed by the GAC in line with the KSA Competition Law and the Executive Regulations is whether there is an economic concentration (as defined under the KSA Competition Law) that causes a sufficient impact on the Saudi Arabian market and reduces competition. The GAC also considers change of control to be directly linked to an economic con - centration taking place. 4.2 Markets Affected by a Transaction When assessing whether an economic concen - tration substantially reduces competition, the GAC will examine the competitive effect of the transaction in the context of the markets the economic concentration is taking place in. In defining markets in terms of their product and geographical dimensions, the GAC focuses on two key elements of substitution. • The product dimension: substitution between products is a central concept in defining the product dimension of markets. The GAC notes that product in this context includes goods, services and other equivalent eco - nomic outputs. • The geographical dimension: substitution between different locations of the relevant goods or services is a central concept in defining the geographical dimension of markets. The GAC notes that the geographi - cal dimension in this context may be local, regional, national or wider in scope, including worldwide. When defining markets, the GAC will follow a general approach in most cases.
accessible these alternatives are. • Level of product differentiation.
501 CHAMBERS.COM
Powered by FlippingBook