SAUDI ARABIA Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Khaled al-Khashab and Shahad Al-Humaidani, GLA & Company
5.5 Conditions and Timing for Divestitures
Economic concentration parties therefore have strong incentives to propose effective and enforceable remedies to the GAC to alleviate the competition concerns identified. 5.3 Legal Standard There is no specifically expressed legal standard for remedies. An acceptable remedy must ade - quately address and alleviate the potential harm to competition created by the specific economic concentration. 5.4 Negotiating Remedies With Authorities Economic concentration parties are free to pro - pose remedies to the GAC at any time through - out the transaction review process, including: • at the outset of the review; • at the pre-notification phase; • at the moment of first notification; and • after the economic concentration parties have been advised of potential competition con - cerns during a review. In general, economic concentration parties are encouraged to begin discussions with the GAC as early in the process as possible. When an economic concentration raises compe - tition issues at the outset or during a review, the economic concentration parties may decide to offer remedies to the GAC. If the GAC accepts that the remedies are sufficient to address the competition concerns in that case, the GAC may decide to approve the economic concentration so long as the proposed remedies are imple - mented, rather than blocking the economic con - centration.
A divestiture remedy will normally specify the: • scope of the divestiture package, such as the assets or businesses (or parts of businesses) to be disposed of; • process for selecting a purchaser; and • process for the disposal, including the required timeframe for the disposal. Parties may not complete a transaction before remedies are complied with. The GAC maintains a role in relation to remedies and conditions accepted with respect to eco - nomic concentrations, including: • monitoring parties’ compliance with commit - ments; and • investigating suspected breaches and enforc - ing remedies and conditions, including by legal action where appropriate. Non-compliance or breach of an agreed remedy is a violation of the KSA Competition Law. • Where the economic concentration parties commit a breach of an obligation under the conditions, the GAC may revoke its approval decision. In some cases, such as where a required divestiture is not made within the required timeframe, the GAC’s decision to approve the economic concentration subject to the conditions may lapse on the basis that the required condition was not fulfilled. This, and comparable breaches of the conditions, may subject the economic concentration parties to fines under Article 19 of the KSA Competition Law. • The economic concentration parties may also be subject to fines under Article 20 of
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