Comparative Competition Law Regimes in the United Arab of Emirates, Saudi Arabia, Philippines, India, and the United Kingdom

Mohamed Gomaa is a Pre-Trial Judge at the State Commissioner Authority at the Egyptian Council of State and an honorary board member of the CIArb YMG Global Steering Committee. He has also served in a legal capacity at the Egyptian Russian State University and has had the privilege to speak as a guest panelist at prestigious law conferences in different parts of the world, which notably include the scientific symposium on “Digital Transformation and Data Security and Safety in Arab Courts” organized by the Arab Centre for Legal and Judicial Research, as well as an event for young researchers in arbitration law organized by Faculty of Law of Aix-en-Provence.

Tejas Sateesha Hinder is a law student in the penultimate year of his B.A. LL.B. (Hons.) degree at the National Law Institute University, Bhopal, India. He takes active interest in legal research and writing, as well as the fields of alternative dispute resolution and commercial law. He holds over 80 publications to his name on various fields of law, ranging from corporate and commercial law to criminal law.

1. Introduction

Competition laws may be similar in many legal systems, as their primary purpose is to protect the market against any anti-competitive behaviors and practices that prevent or limit competition between actors. This article analyzes the legal system as it relates to competition law in the United Arab Emirates (UAE), Saudi Arabia (KSA), the Philippines, India, and the United Kingdom (UK) by clarifying non-competitive practices and how they are treated by authorities, along with some recommendations for reform.

Competition law has a profound effect on the economic growth of every jurisdiction. It is important to adopt competition laws in order to enhance economic welfare with respect to the market economy and to minimize the intervention of the state as much as possible. The competition law itself should fix any deviation from a competition in each market. Competition laws support stimulating efficiency in each market whether it is allocative, productive, or dynamic efficiency; increasing consumer welfare; strengthening international competitiveness; promoting democracy and social justice; attracting investments; and enhancing economic growth.

However, the benefits of competition need to be secured by state action through implementing competition policies that ensure competitiveness in the market and offering perfect conditions for business firms to operate. Canada and the United States were among the first countries to pass competition protection legislation in 1889 and 1890, respectively.[1] Nevertheless, most developing countries lagged in this trend, including many where competition laws were not passed until the end of the 20th century.[2] Competition law should aim to achieve three objectives: to detect and stop anti-competitive conduct, punish infringers with substantial penalty, and rectify the harm caused by the infringer and restore competition to a distorted market.

This article analyzes antitrust enforcement in five jurisdictions by discussing the following five topics to detect the differences and similarities among the competition systems:

• Types of Anti-Competitive Practices
• Competition Law Instruments: Per Se Rule vs. Rule of Reason
• Enforcement Approach: Public Enforcement vs. Private Enforcement
• Exemptions and Exceptions
• Types of Interventions

2. United Arab of Emirates (UAE) Competition Law

The UAE economy has witnessed major growth spurts since its establishment in 1970s.[3] The economic, political, and security stability in the United Arab Emirates has attracted investments of capital across various fields and activities. To preserve these advantages and ensure the flow of capital, the state has been keen on improving and developing the legal and institutional environment by amending some current laws as well as issuing new legislation. In this context, the issuance of Federal Law No. 4 of 2012 regarding the regulation of competition comes as one of the most important modern economic legislations aimed at encouraging market mechanisms to carry out their functions by protecting competition and preventing anti-competitive practices.[4]

2.1. Types of Anti-Competitive Practices

The Emirate’s legislator determined its objectives in Article 2 of the Federal Law No. 4 of 2012 and prohibited the anticompetitive practices, and provides that:

This Law aims to protect and promote competition and anti-monopoly practices through:

1. Provide a motivating environment for establishments to ensure efficiency, competition and consumers’ interests, as well as reach a sustainable development for the State.

2. Maintain a competitive market governed by market mechanisms in accordance with the principle of economic freedom by prohibiting restrictive agreements as well as the acts and conducts taking advantage of a dominant position, control the economic concentration process and avoid all what might violate, reduce or prevent competition.[5]

Horizontal and Vertical Agreements

Generally, anti-competitive practices are of two types: horizontal (the so-called cartels) and vertical. A horizontal agreement is an agreement between two or more parties who have similar competitive position, for the purpose of limiting the competition between them or reducing its intensity, in order to achieve the largest profits (i.e., price-fixing, quantity limits, and bid rigging). Vertical agreements are restrictive agreements between firms either in different stages of supply chain (upstream and downstream firms) or along distribution chain (manufacturers and retailers) regarding provision and sale of goods and services.

The Emirate’s legislator has preferred to merge both types and treat them in one text. Article 5 of the Federal Law Number 4 of 2012 defines those restricted agreements and states that “Agreements which have as their subject or objective the abuse, restriction or prevention of competition shall be prohibited, in particular the agreements that aim to:

• fix, directly or indirectly, purchase or sale prices of goods or services by causing increase, reduction, or fixing of prices, thereby adversely affecting Competition.
• determine the terms and conditions of sale, purchase, or performance of services, or any similar transaction.”[6]

We see that it should be included, while setting the price, the due return on installments, the guarantee period, after-sale’s services, and other contractual conditions affecting the decision to buy or sell. It can be inferred that merely lowering prices or granting price reductions is not considered a restrictive practice of competition when conditional on certain controls. For example, for the buyer to benefit from such benefits upon reaching a predetermined level of purchases, and for the same criteria to be applied to everyone without discrimination.

Additionally, we cite the judgment of the Paris Court of Appeal in Concurrence SA v. Sony, which concluded that the granting of benefits in kind, and others represented in price reductions to a group of distributors who provide specific services, is not considered a harmful practice in itself, whenever these advantages are granted objectively.[7] It does not restrict the distributor’s freedom to independently determine its product pricing policies, including:

• Collusion in bids or proposals in tenders, practices, and other supply offers.
• Freezing or limiting production, development, distribution or marketing, and other investment aspects.

Accordingly, any agreement that would restrict the volume of supply of products, or reduce the service rendered to the public to increase prices without real justification, is considered a harmful practice against competition.

The Emirate’s legislature supported the prohibition of agreements that limit production or manufacturing without requiring that the person who concludes these agreements is a person who has control or dominance over the relevant market, similar to what the American judiciary has settled on, and unlike the behavior of the Egyptian legislator, who stated in Article 8 of the Law on the Protection of Competition and the Prevention of Monopolistic Practices that these agreements shall be issued by a dominant person. Reference to the Egyptian legal regime in this regard can specifically be made to the Egyptian Competition Law No. 3/2005.[8] Specific in this regard would be clauses (e) and (f) of Article 5 of the Federal Act No. 4 of 2012 of the United Arab Emirates, which are as follows:

e. conspiracy not to purchase from certain organization or organizations, limiting sale or supply to certain organization or organizations, and preventing or obstructing its/their ability to carry out its/their business.

f. restricting the freedom of supply of goods or services to the Relevant Market, or removing goods or services from the Relevant Market, including hiding or unlawfully storing goods or services, abstaining from dealing in goods and services, or creating a sudden oversupply that leads to circulating the goods and services at fake prices.[9]

Under the Federal Law No. 18 of 1981 mentioned above,[10] restrictive Agreements among Organizations which prejudice, restrict, or prevent Competition, shall be prohibited, including the agreements that are aimed at:

• Market sharing or allocation of clients based on geographical areas, distribution centers, customer quality, seasons, periods of time, or any other basis that adversely affects Competition.
• Taking any measures to obstruct the entry of any Organizations to the market, excluding any Organizations from the market, or obstruction of accession to any existing agreements or joint ventures.

Abuse of Dominant Position

The second paragraph of Article 6 of the Federal Law No. 4 of 2012 describes the dominant position:

The Dominant Position referred to in Clause 1 of this Article is realized when the share of any Organization exceeds the percentage prescribed by the Council of Ministers of the total transactions in the Relevant Market. Additionally, The Council of Minister, upon a proposal by the Minister, may increase or decrease this percentage based on the economic situation requirements.[11]

Article 6 further prevents any abuse of such practices provided that “[n]o Organization of a Dominant Position in the Relevant Market, or in a substantial or influential part thereof, may carry out any acts or actions that lead to the abuse of this position in order to prejudice, restrict, or prevent Competition, particularly those which have the following subjects or objectives:

• Directly or indirectly imposing prices or conditions for resale of goods or services,
• Selling goods or performing services at below cost price with the aim of obstructing the entry of competitive Organizations to the Relevant Market, excluding them, or exposing them to losses that make it hard for them to continue their business,
• Unjustified discrimination of customers of identical contracts in terms of prices of goods and services, or the terms of sale or purchase contracts,
• Forcing a customer not to deal with a competitive Organization,
• Rejection, in whole or in part, of dealing under the usual commercial terms,
• Unjustified abstention from selling or purchasing goods and services, or reducing or obstructing this dealing, thereby imposing a false price,
• Making the conclusion of a sale or purchase contract or agreement for goods or services conditional on the acceptance of obligations for dealing in other goods or services which by nature or under commercial use are unrelated to the subject of the original dealing or agreement,
• Disseminating, knowingly, false information about the products or their prices,
• Increasing or decreasing the available quantities of the product, thereby creating a forced deficit or oversupply of the goods in question.”[12]

Economic Concentration

Article 1 defines Economic Concentration. In order to complete the Economic Concentration operations in which the total share of the Organizations involved in these operations exceeds the percentage set out by the Council of Ministers of the total transactions in the Relevant Market, which may affect the Competition level in the Relevant Market, particularly creating or promoting a Dominant Position, the relevant Organizations shall apply to the Ministry at least 30 days before the completion of these operations, according to the form prepared for this purpose and shall attach the required documents with the application. Moreover, The Council of Ministers, upon the proposal of the Minister, may increase or reduce the Economic Concentration percentage set out in Clause (1) of this Article according to the Economic Concentration requirements. See Article 9, paragraphs 1 and 2.

2.2. Competition Law Instruments: Per Se Rule v. Rule of Reason

The law adopted both the per se rule and rule of reason, trying to create a balance within the circumstances of each behavior. For example, Article 8 provides that “The Minister shall make its decision referred to in Clause 1 of Article 7 of this Law within ninety days, …. If no decision is issued by the Minister within this period, this shall be considered an implicit acceptance of these restrictive Agreements or the practices relevant to a Dominant Position.” However, the Minister may make a reasoned decision on the notifications submitted under the provisions of Article 7 of this law as follows:

• Approve or reject the restrictive Agreements or the practices relevant to a Dominant Position, as amended.
• Approve the enforcement of restrictive Agreements or the practices relevant to a Dominant Position, as amended, provided that the relevant Organizations comply with the conditions and obligations established.

Additionally, The Minister may make a reasoned decision concerning the applications filed under Articles 9 and 10 of this Law as follows:

• “Approving the Economic Concentration process if it has no adverse impact on Competition or if it has positive economic effects that exceed any negative effects on Competition.
• Approving the Economic Concentration process, provided that the relevant Organizations undertake to implement the conditions and obligations determined by the Minister for this purpose.
• Rejecting the Economic Concentration….”

2.3. Enforcement Approach: Public Enforcement v. Private Enforcement

The legislator adopted the public enforcement, provided that “Any concerned party may file a complaint with the Ministry concerning any violation of this Law….” In addition, the criminal case for the crimes set out in this law may commence only by a written request by the Minister or his authorized deputy. The Minister, or his authorized deputy, may affect reconciliation in respect of any of these acts before referring the criminal case to trial in consideration for payment of any amount that is not less than double the minimum penalty.” See Articles 25 and 26 of the UAE Law.

2.4. Exemptions and Exceptions

Exemptions: The Minister, based on the recommendation of the Committee, shall decide to exclude the restrictive Agreements or the practices relevant to a Dominant Position from the provisions of Articles 5 and 6 of this Law, subject to the following conditions:

• The relevant Organizations shall notify the Ministry of these Agreements in advance according to the form prepared for this purpose and shall attach the documents prescribed by the Executive Regulation of this Law.
• The relevant Organizations shall prove that these restrictive Agreements or the practices relevant to a Dominant Position would enhance economic development, develop the performance of Organizations or their competitive ability, develop production or distribution systems, or realize certain benefits to the consumers.
• The Ministry should be notified of any amendments to the restrictive Agreements or the practices relevant to a Dominant Position for which an exception was obtained within 30 days from concluding the draft. See Article 7.

Exceptions: Article 4 provides general exceptions, if “The provisions of this Law shall not apply to:

• The sectors, activities and works set out in the Appendix to this Law. The Council of Ministers may delete or add any sectors, activities or works to these exclusions.
• The acts undertaken by the Federal Government or one of the UAE governments, and the acts of the Organizations carried out based on a decision or authorization by the Federal Government or one of the UAE governments, or under the supervision of any of them, including the acts of the Organizations owned or controlled by the Federal Government or any of the UAE governments according to the controls prescribed by the Council of Ministers.
• Small and medium-sized Organizations in accordance with the controls prescribed by the Council of Ministers”.

Regarding the horizontal & vertical agreements mentioned in Article 5, the legislature also excluded some acts, providing that “Save for Sub-clause (a), Clause (1), and Sub-clause (a), Clause 2, the provisions of this Article shall not apply to low-impact agreements in which the total share of the Organizations which are parties to these agreements do not exceed the percentage set by the Council of Ministers of the total transactions in the Relevant Market….”

2.5. Types of Interventions

Fines and Closure Penalties: The legislature, in Articles 16, 17, 18, 19, 20, and 21, adopted fines and closure penalties and not criminal sanctions like prison. For example, regarding horizontal & vertical agreements, Article 16 mentions that “any Organization that violates the provisions of Articles 5 and 6 of this Law shall be punished by a fine of no less than AED 500,000 (Dhs. Five Hundred Thousand) and no more than AED 5,000,000 (Dhs. Five Million)”. Moreover, the court, in the event of conviction, may order the closure of the Organization for no less than three months and for no more than six months, and may order the publication of its decision once or more in at least two local daily newspapers at the expense of the violating Organization.

Additionally, the law aggravated any case of recurrence in Article 21 providing that the penalties prescribed for the crimes set out in this law shall be aggravated in the event of recurrence. It should be mentioned that there is an obligation on the Ministry to take adequate procedures to ensure the confidentiality of the information to which the Ministry have access and not disclose that information except to the concerned parties or upon request of the Competent Authorities. Otherwise, it shall be punished by a fine of no less than AED 50,000 and no more than AED 200,000.

Compensation: Article 23 provides that “1. The penalties set out in this Law shall not prejudice any more aggravated penalties set out in any other law. 2. The penalties set out in this Law shall not prejudice the right of the harmed party to have recourse to the court to claim compensation for the damage arising from violating any provision of this Law.”

Summary Basis: Article 24 provided that “Competition cases shall be considered on summary basis and the competent court may render a decision to suspend or prevent any act until a final decision is rendered.”

The Competitive Committee: There is a committee called the “Competition Regulation Committee” formed under this law. It is chaired by the Undersecretary of the Ministry of Economy. The Council of Ministries determines the formation of the Committee, regulating its work system, term of membership in the Committee, and the remuneration of its members. In our opinion, there is a lack of independence of such committee because the Council of Ministries decides on its competences, budget, and appointments of the members. See Article 15.

This committee has multiple functions.

• Proposing the policy for the protection of Competition in the UAE
• Preparing an annual report on the Committee activities to be presented to the Minister
• Coordinating with the competent authorities in the UAE to address any form of activities or practices violating the provisions of this law
• Disseminate the culture of Competition and free market principles, … and others.

The employees who are designated by a resolution by the Minister of Justice, in agreement with the Minister and the Competent Authority, shall act as law enforcement officers to identify the violations of the provisions of this law, within their respective competence.[13]

3. Saudi Arabian (KSA) Competition Law

Saudi Arabia adopted a Competition Law in 2004, which came into force in January 2005. Under Article 2, the competition law seeks to protect the fair competition and encourage it, and to prohibit any monopolistic practices that may affect the market competition and to protect the consumer interests for the purpose of improving the market environment and economic development. The law aims to improve market efficiency and create a competitive business environment within a framework of fairness and transparency through:

• Protecting and encouraging fair competition;
• Combating and preventing monopolistic practices affecting legitimate competition and the interests of consumers;
• Enhancing the availability of goods with high quality and diversified prices;
• Stimulating innovation and investment to support economic growth.

Jurisdiction and Scope is outlined in Article 3:

• The competition law applies to every entity located and operating in the kingdom.
• It blocks exemption for public entities operating in Saudi Arabia.
• The activity includes commercial, agricultural, industrial, and service businesses, as well as the purchase and sale of goods and services.
• The jurisdiction of this law entails any other practices occurred outside of the Kingdom, that may affect the fair competition in the Kingdom.
• However, the public institutions and state-owned companies shall be exempted from these provisions if the institution or company is authorized solely by the government to provide goods and services in a specific field.

Article 1 outlines definitions. Article 4 deals with Market Price. The entities operating in the Kingdom are free to set the price for the service and commodities they provide, according to market rules and principles of free competition—except for the prices of goods and services determined by decision of the Council of Ministers, or by regulation.

3.1. Types of Anti-Competitive Practices

Article 5 includes the prohibition of horizontal agreement between establishments. However, the system does not address vertical relationship. This article depends on the per se rule and rule of reason: the per se rule when it specifies eight cases to be deemed anti-competitive practices if they occur, and on the rule of reason if any practices or agreements that are not included in this article but have an impact on the violation of competition in the market.

3.2. Competition Law Instruments: Per Se Rule v. Rule of Reason

Under Article 6, entities which enjoy a dominant position in the market or part thereof are prohibited from abusing this position to undermine competition. Under Saudi competition law dominance, per se is not prohibited; however abuse of dominance is prohibited under such law. Moreover, a firm is deemed to be dominant in case of the following two criteria (executive regulations):

• First: a market share in the relevant market amounting to 40% or more;
• Second: the ability to influence the Relevant Market.

This provision depends also on either the per se rule or the rule of reasoning. Article 9 of the executive regulation specifies two cases of abuse of dominance as per se rules:

• First: restricting an entity from dealing with another entity;
• Second: making a sale of a commodity conditional upon assuming an obligation, or accepting a commodity, which by nature, or according to commercial use, is not related to the initial commodity subject of the contract or deal.

The rule of reason includes any act that exploits the dominant position to abuse this position for the object of undermining the competition.

Economic Concentration (Mergers and Acquisitions): Under Articles 7, 9, 10, and 11, Saudi antitrust legislation requires M&A agreement to pass certain requirements and thresholds delineated by law provisions to ensure that the agreement will not entail economic concentration that could harm the competitive process within a specific market. Entities that wish to proceed into the economic concentration process must notify the competition authority 90 days before its completion if its sales value exceeds the amount prescribed by the regulation.

The authority may review all records, data, files, and documents with the establishments concerned with economic concentration and obtain copies of them. The Council issues a decision regarding economic concentration reports in the form of consent, conditional approval, or rejection. A decision issued with conditional approval or rejection must be justified. However, the entity cannot proceed in the economic concentration process without a written approval from the authority or the lapse of 90 days from notifying without reporting a refusal or approval from the competent council.

3.3. Exemptions and Exceptions

The Saudi competition law stipulates for block exemption for State-owned public institutions (Article 3), and conditional exception for firms if they improve market performance under the below circumstances upon the formation of certain committee (Article 8). The Saudi competition law does not explicitly list specific exception, rather it provides general criteria and conditions that should be met before an exception is approved. Evaluation is based on case-by-case bases.

Under Article 8, certain anti-competitive practice may be exempted from the application of provisions of the prescribed law, if they improve market performance or generate efficiencies in quality, technology, or creativity. In a manner of cost-benefit analysis, as for benefit to exceed costs. In granting an exception the Committee will consider (executive regulations):

• Whether an exception would improve the performance of the market;
• Whether an exception would improve the product quality, technological development and/or innovativeness of enterprises;
• Whether the benefit to consumers would outweigh the effects of the limitation of freedom of competition.

However, agreement and conducts that are eligible for individual exception must be notified for prior approval and authorization by relevant authorities. Exceptions should be granted and authorized only if there are necessary for benefit of consumers or national strategic and least restrictive to competition.

The burden of proof of enhancing the economy is upon the firm requesting the exception, and the COC shall verify the same and decide on the validity thereof. The COC shall issue a reasoned resolution by approving the exemption application, its duration, and conditions or by rejecting it within 90 days from the date of receipt of the application. If the period elapsed without issuance of a resolution by the COC, the application shall be deemed rejected.

3.4. Enforcement Approach: Public Enforcement v. Private Enforcement

Impartiality and Confidentiality clauses: Under Article 12, the competition authority and its members are prohibited from exercising commercial activities or any activity that contradict with its purpose. The authority is prohibited from receiving any gifts, donations, endowments, bequests, grants, and aid except by the government. The Article also provides for the financial and operational dependency of the competition authority on the government, and it states that the authority lacks financial independence owing to dependency to the aforesaid extent.

Under Article 13, the Authority and its member shall maintain the confidentiality of information, records, data, files, and documents obtained from the entities during the gathering of inference or investigations, and it is not permissible to hand them over to other parties without the approval of the Authority. Under Article 24, whoever divulges a secret related to his work among the members of the Board or the employees of the Authority with the aim of achieving a material or intangible benefit shall be punished with a fine not exceeding one million riyals.

Public Enforcement: Under Article 14, the President—or the Governor, in urgent cases—may issue a decision to take the procedures of investigation, research, gathering evidence, or investigating anti-competitive practices. The Board of the Authority has the right to issue its decision to approve the conduct of investigation, search and collect evidence measures regarding complaints and initiatives related to violating the provisions of the system, investigate them, initiate a criminal case, or file a case, if it is justified. The authority may give priority to handling complaints and reports of serious harm or the greatest impact on competition, in accordance with criteria approved by the Board. (Due to the limited resources of the authority, also called the functional independence). Public enforcement entails a vertical nature of dispute between the state and private parties.

Investigative Powers of the Competition Authority: Under Article 15, the Council empower certain employees to:

• Conduct investigation, research, collecting evidence, and controlling violations of the provisions of the law; carry the status of judicial enforcement officer; and have the right to enter facilities’ sites, offices, and branches during normal working hours and review their books and documents;
• Conduct the necessary investigation and accountability, and the public prosecution, when considering violations of the provisions of the law.

There is a prohibition in relation to preventing or hindering the conduct of an investigation under the provisions of the competition law. According to Article 16, the Authority is empowered to request periodic report from public entities about working entities in the market.

Private Enforcement and Compensation: Under Article 25, any person of a natural or legal nature who suffers damage resulting from practices in violation of the provisions of the law, may apply for compensation before the competent court. Under such approach, private plaintiffs have the right to claim damages before national courts for loss caused by other party behavior in breach of competition law.

3.5. Types of Interventions

Committee for the resolution of violation of the law: Under Article 18, the competition authority has the right to adjudicate on the infringement of the competition authority law, by its own, pursuant to the following:

• Self-Enforcement: The committee of specialists shall be formed to settle upon violations of the law, regulations, and impose penalties stipulated in the system. The committee shall issue its award by majority.

Penalties: Penalties under Saudi competition law take the form of monetary penalties that are financial penalties levied on the infringer, with no criminal penalty. Fines take the forms of administrative sanctions imposed by the competition authority. Under Article 19, the Saudi competition law adopts a revenue-based criterion; where fines imposed on illegal practices are calculated as percent of total revenues of the product in question during years of infringement. Moreover, the Saudi competition law provide for non-monetary sanction imposed by the authority.

Under Article 21, the competition Council is entitled to take any of the following action in case of detecting any violation. It is worth mentioning that the competition authority is entitled to the following before the decision of infringement is issued and after detecting the infringement, for the sake of stopping the violation as soon as possible:

• Order the violator to remove the effect of the violation
• The competition Council after awarding the penalty has the right to:
  • Order the violator to dispose any of his property right or assets.
  • Obligate the violator to pay 10 thousand riyals daily until the violation is removed.
  • Closing the entity temporarily for a period not exceeding (thirty) days when the violation continues after the lapse of (ninety) days from the Board notifying the establishment that the violation shall be removed.

In addition, under Article 22, fines are estimated on a case-by-case basis, depending on the conditions and the circumstances of each case and the magnitude of the effect of the violation. Whoever violates any of the provisions of this system shall be subject to substantial penalties, which is increasing much higher in case of recidivism.

Leniency: Under Article 23, stipulate for a leniency program which grant a total relief from the sanction to those members (whistle blowers) who come forward, confess their participation in illicit action and submit efficient evidence of law breach to avoid being subject to these penalties.

Single Integrated Agency Model: The Saudi competition law is a regime where competition agency is delegated both investigative and adjudicative powers regarding antitrust cases. Article 18 establishes a committee of five specialists, which shall be formed by a decision of the Council—based on the president’s nomination—for a period of three years, which can be renewed, provided that among them there are at least three members specializing in the regulations, with the competence to adjudicate violations of the law and regulations —with the exception of the violations referred to in the paragraph (1) Article (12) and Article (24)—imposing the penalties stipulated in the system.

Economic Studies: The Saudi competition law regime stipulates for the agency entitlement to perform economic studies, which are essential to tackle perceived problem in antitrust cases and adopt appropriate remedies. For example, under Article 23, imposing of penalty is evaluated on a case-by-case basis depending on an economic study. Regarding Merge and acquisition or economic concentration the decision of the committee depends on an economic study.

4. Philippine Competition Law

The Congress of the Philippines has defined the competition law in the statement of object to the Republic Act No. 10667 as “an act providing for a national competition policy prohibiting anticompetitive agreements, abuse of dominant position and anti-competitive mergers and acquisitions, establishing the Philippine competition commission and appropriating funds. The State shall regulate or prohibit monopolies when the public interest so requires and that no combinations in restraint of trade or unfair competition shall be allowed.”[14]

4.1. Types of Anti-Competitive Practices

Horizontal Agreement: Section 14 of the Anti-Competitive Agreement, identifies agreements between or among competitors that are per se prohibited:

• Restricting competition as to price, or components thereof, or other terms of trade;
• Fixing price at an auction or in any form of bidding including cover bidding, bid suppression, bid rotation, and market allocation and other analogous practices of bid manipulation;
• Setting, limiting, or controlling production, markets, technical development, or investment among competitors;
• Dividing or sharing the market, whether by volume of sales or purchases, territory, type of goods or services, buyers or sellers or any other means;
• Agreements other than those specified in this section which have the object or effect of substantially preventing, restricting or lessening competition.

Vertical Restraints: Section 15, Abuse of Dominant Power, states that nothing contained in this Act shall prohibit or render unlawful the following:

• Permissible franchising, licensing, exclusive merchandising, or exclusive distributorship agreements such as those which give each party the right to unilaterally terminate the agreement;
• Agreements protecting intellectual property rights, confidential information, or trade secrets;
• Making supply of goods or services dependent upon the purchase of other goods or services from the supplier which have no direct connection with the main goods or services to be supplied;
• Directly or indirectly imposing unfairly low purchase prices for the goods or services of, among others, marginalized agricultural producers, fisherfolk, micro-, small-, medium-scale enterprises, and other marginalized service providers and producers;
• Directly or indirectly imposing unfair purchase or selling price on their competitors, customers, suppliers, or consumers, if prices that develop in the market as a result of or due to a superior product or process, business acumen or legal rights or laws shall not be considered unfair prices;
• Limiting production, markets or technical development to the prejudice of consumers, provided that limitations that develop in the market as a result of or due to a superior product or process, business acumen or legal rights or laws shall not be a violation of this Act.

Mergers and Acquisitions: Section 16, Review of Mergers and Acquisitions, the Commission shall have the power to review mergers and acquisitions based on factors deemed relevant by the Commission. Section 17, Compulsory Notification, states that parties to the merger or acquisition agreement referred to in the preceding section wherein the value of the transaction exceeds one billion pesos are prohibited from consummating their agreement until 30 days after providing notification to the Commission in the form and containing the information specified in the regulations issued by the Commission.

Section 19, Notification Threshold, the Commission shall, from time to time, adopt and publish regulations stipulating:

• The transaction value threshold and such other criteria subject to the notification requirement of section 17 of this Act;
• The information that must be supplied for notified merger or acquisition;
• Exceptions or exemptions from the notification requirement;
• Other rules relating to the notification procedures.

Section 20, Prohibited Mergers and Acquisition, states that merger or acquisition agreements that substantially prevent, restrict, or lessen competition in the relevant market or in the market for goods or services as may be determined by the Commission shall be prohibited.

4.2. Competition Law Instruments: Per Se Rule v. Rule of Reason

Per se rules: Under section 14, Anti-Competitive Agreement, the following agreements, between or among competitors, are per se prohibited:

• Restricting competition as to price, or components thereof, or other terms of trade;
• Fixing price at an auction or in any form of bidding including cover bidding, bid suppression, bid rotation, and market allocation and other analogous practices of bid manipulation;
• Setting, limiting, or controlling production, markets, technical development, or investment among competitors;
• Dividing or sharing the market, whether by volume of sales or purchases, territory, type of goods or services, buyers or sellers or any other means;
• Agreements other than those specified in this section which have the object or effect of substantially preventing, restricting, or lessening competition shall also be prohibited.

Under section 15, Abuse of Dominant Power, it shall be prohibited for one or more entities to abuse their dominant position by engaging in conduct that would substantially prevent, restrict, or lessen competition:

• Selling goods or services below cost with the object of driving competition out of the relevant market;
• Setting prices or other terms or conditions that discriminate unreasonably between customers or sellers of the same goods or services, where such customers or sellers are contemporaneously trading on similar terms and conditions, where the effect may be to lessen competition substantially;
• Imposing restrictions on the lease or contract for sale or trade of goods or services concerning where, to whom, or in what forms goods or services may be sold or traded, such as fixing prices, giving preferential discounts or rebate upon such price, or imposing conditions not to deal with competing entities, where the object or effect of the restrictions is to prevent, restrict, or lessen competition substantially;
• Directly or indirectly imposing unfairly low purchase prices for the goods or services of, among others, marginalized agricultural producers, fisherfolk, micro-, small-, medium-scale enterprises, and other marginalized service providers and producers.

Rule of Reason: Under section 14, Anti-competitive Agreement, the law states to contribute to improving the production or distribution of goods and services or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefits, may not necessarily be deemed a violation of this Act. Under section 15, Abuse of Dominant Power, selling goods or services below cost with the object of driving competition out of the relevant market, provided that in the Commission’s evaluation of this fact, it shall consider whether the entity or entities have no such object and the price established was in good faith to meet or compete with the lower price of a competitor in the same market selling the same or comparable product or service of like quality.

4.3. Enforcement Approach: Public Enforcement v. Private Enforcement

Public Enforcement: Under section 31, Fact Finding – Preliminary Inquiry, the Commission, or upon the filing of a verified complaint by an interested party or upon referral by a regulatory agency, shall have the sole and exclusive authority to initiate and conduct a fact-finding or preliminary inquiry for the enforcement of this Act based on reasonable grounds. Section 33, Power to Investigate and Enforce Order and Resolutions, the Commission shall conduct inquiries by administering oaths, issuing subpoena duces tecum and summoning witnesses, and commissioning consultants or experts.

4.4. Exemptions and Exceptions

Exemptions: Under section 14, Anti-Competitive Agreement, an entity that controls, is controlled by, or is under common control with another entity or entities, have common economic interests, and are not otherwise able to decide or act independently of each other, shall not be considered competitors for purposes of this section. Under section 15, Abuse of Dominant Power, imposing barriers to entry or committing acts that prevent competitors from growing within the market in an anti-competitive manner are prohibited, except instances that develop in the market because of or arising from a superior product or process, business acumen, or legal rights or laws.

Socialized pricing for the less fortunate sector of the economy is one significant exception created to ensure that their affordability is not affected by the pricing. Price differential which reasonably or approximately reflect differences in the cost of manufacture, sale, or delivery resulting from differing methods, technical conditions, or quantities in which the goods or services are sold or delivered to the buyers or sellers. Price differential or terms of sale offered in response to the competitive price of payments, services or changes in the facilities furnished by a competitor. Price changes in response to changing market conditions, marketability of goods or services, or volume.

Under section 21, Exemptions from Prohibited Mergers and Acquisitions, merger or acquisition agreement prohibited under section 20 of this chapter may, nonetheless, be exempt from prohibition by the Commission when the parties establish either of the following:

• The concentration has brought about or is likely to bring about gains in efficiencies that are greater than the effects of any limitation on competition that result or likely to result from the merger or acquisition agreement;
• A party to the merger or acquisition agreement is faced with actual or imminent financial failure, and the agreement represents the least anti-competitive arrangement among the known alternative uses for the failing entity’s assets

Exceptions: Under Section 28, Forbearance, the Commission may forbear from applying the provisions of this Act, for a limited time, in whole or in part, in all or specific cases, on an entity or group of entities, if in its determination:

• Enforcement is not necessary to the attainment of the policy objectives of this Act;
• Forbearance will neither impede competition in the market where the entity or group of entities seeking exemption operates nor in related markets;
• Forbearance is consistent with public interest and the benefit and welfare of the consumers.

4.5. Types of Interventions

Sanctions: Under section 17, Compulsory Notification, an agreement consummated in violation of this requirement to notify the Commission shall be considered void and subject the parties to an administrative fine of one percent (1%) to five percent (5%) of the value of the transaction. Under section 29, Administrative Penalties, the Commission may impose the following schedule of administrative fines on any entity found to have violated the said sections:

• First offense: Fine of up to 100 million pesos;
• Second offense: Fine of not less than 100 million pesos but not more than 250 million pesos;
• In fixing the amount of the fine, the Commission shall have regard to both the gravity and the duration of the violation.

Under section 30, Criminal Penalties, an entity that enters into any anti-competitive agreement shall, for each and every violation, be penalized by imprisonment from two to seven years, and a fine of not less than 50 million pesos but not more than 250 million pesos. The penalty of imprisonment shall be imposed upon the responsible officers, and directors of the entity. When the entities involved are juridical persons, the penalty of imprisonment shall be imposed on officers, directors, or employees holding managerial positions, who are knowingly and willfully responsible for such a violation

Remedies: Under section 35, Leniency Program, the Commission shall develop a Leniency Program to be granted to any entity in the form of immunity from suit or reduction of any fine which would otherwise be imposed on a participant in an anti-competitive agreement in exchange for the voluntary disclosure of information regarding such an agreement which satisfies specific criteria prior to or during the fact-finding or preliminary inquiry stage of the case. Immunity from suit will be granted to an entity reporting illegal anti-competitive activity before a fact-finding or preliminary inquiry has begun if the following conditions are met:

• At the time the entity comes forward, the Commission has not received information about the activity from any other source;
• Upon the entity’s discovery of illegal activity, it took prompt and effective action to terminate its participation therein;
• The entity reports the wrongdoing with candor and completeness and provides full, continuing, and complete cooperation throughout the investigation;
• The entity did not coerce another party to participate in the activity and clearly was not the leader in, or the originator of, the activity.

5. Indian Competition Law

The India Competition Act of 2002 was approved and into effective on January 13, 2003. The act’s goals are mentioned in the preamble, which states that the act would create a Commission (the Competition Commission of India) to prohibit anti-competitive acts, promote and sustain market competition, safeguard consumers, and ensure the freedom of trade of other market players. The Act regulates three anti-competitive practices: anti-competitive agreements, abuse of dominant position, and mergers and acquisitions (Combinations). Anti-competitive behaviors must not have a major detrimental impact on competition inside India as a primary criterion for regulation.

Section 3 of the Act defines anti-competitive agreements and divides them into two categories: horizontal agreements and vertical agreements. It stipulates that any anti-competitive agreements that have the potential to have a significant detrimental effect on competition in India are void, subject to the exceptions set out in section 3(5). Section 4 discusses concerns of abuse of dominant position and provides a list of activities that may be considered abuse of dominant position. Sections 5 and 6 go through several elements of combinations and provide certain rules to govern them.

Important definitions under the Act

Cartel: The Act defines a cartel as a group of producers, sellers, distributors, dealers, or service providers that limit, control, or seek to control the production, distribution, sale, or pricing of products or the supply of services by agreement among themselves. Cartels are anti-competitive agreements in which makers, sellers, and producers of homogeneous commodities agree to control production, supply pricing, and other aspects of goods in order to achieve targeted profits and market domination.

Enterprise means and includes a person or a government department who is or has been engaged in the following activities:

• Production, storage, supply, distribution, acquisition, or control of articles or goods;
• Provision of services of any kind;
• Investing or acquiring of business, holdings, or dealings in shares or other securities of any other body corporate either directly or through a subsidiary. However, for the purposes of the Act, a government agency carrying out operations related to the government’s sovereign powers, such as atomic energy, currency, defense, and space, is not considered an enterprise.

Person is defined in Section 2(l) of the Act broadly. According to the definition, a ‘person’ comprises the following:

• Any individual, Hindu undivided family, company, or firm;
• Any combination of individuals, whether or not incorporated in India or outside India;
• Any corporation constituted by the central or state governments, or a government company as defined under the Companies Act;
• Any company formed by or under the laws of a country other than India;
• Any cooperative society, municipal government, or artificial legal entity.

Relevant Market is defined by two terms: ‘relevant geographic market’ and ‘relevant product market,’ as stated in section 2(r) of the Act. Either a ‘relevant geographic market’ or a ‘relevant product market,’ or both, must be mentioned by the Commission. A relevant geographic market is one in which homogeneous circumstances for all areas of trade and commerce exist. Markets in neighboring communities do not have similar circumstances. A relevant product market is one in which the products and services are interchangeable or can be replaced for by other products and services accessible in the market. The following are the features of the Competition Act:

• Anti-Competitive Agreement: Any individual or business must not engage in any manufacturing, distribution, or supply activities that may have a harmful impact on competition in India. Any arrangement of this nature is deemed unlawful.
• Abuse of Dominant Position: It will be regarded an abuse of dominant position if an organization or a related individual is determined to be engaging in acts that are unfair or discriminatory in character. If a party is determined to be abusing their position, the relevant authorities will conduct an inquiry.
• Combinations: A combination, according to the legislation, is defined as terms that lead to acquisitions or mergers. However, if such combinations exceed the Act’s limitations, the parties involved would be investigated by the Competition Commission of India.
• Competition Commission of India: The Competition Commission of India is an independent organization with the authority to enter into contracts and sue the parties concerned if those contracts are breached. The Commission is made up of a maximum of six members who are responsible for preserving and promoting consumer interests in order to maintain an optimum climate for economic competition.

The Commission’s other role is to provide advice to the Indian government on economic competitiveness and to raise public awareness about the problem. The Competition Act of 2002 deals mainly with three concepts: Anti-Competitive Agreements, Abuse of Dominant Position, and Combinations and their regulation.

5.1. Types of Anti-Competitive Practices

Anti-competitive agreements are agreements between parties participating in a commercial transaction that have the potential to undermine competition in a specific market or that benefit one person or group at the expense of others. The Competition Act of 2002 prohibits such anti-competitive arrangements. The word ‘agreement,’ as defined in section 2(b) of the Act, does not require that the agreement be in the form of a formal document signed by the parties. It might be in writing or not. Clearly, the definition given is comprehensive rather than complete, and it covers a broad range of topics.

The fundamental rationale for using a broad definition of “agreement” under Competition law is that those participating in anti-competitive actions are unable to enter into formal written agreements to keep their activities hidden. Cartels, for example, are frequently cloaked in secrecy. Section 3 of the Act bans any arrangement relating to the manufacture, supply, distribution, storage, purchase, or control of commodities or the provision of services that has or is likely to have a significant negative impact on competition in India. Section 3(2) further states that any agreement made in violation of this clause is null and invalid.

Based on the provisions of Section 3 of the Act, anti-competitive agreements are divided into two categories: horizontal and vertical agreements.

Horizontal Agreements: These are agreements that are made between two or more companies or businesses that compete in the same market in terms of production, supply distribution, and so on. Horizontal anti-competitive agreements, for example, are agreements between manufacturers of a given commodity not to sell a product below a certain price or not to offer a product to a specific market.

The Competition Act, 2002 prohibits following types of horizontal agreements, namely:

• Agreements regarding fixing of purchase or selling prices of a product either directly or indirectly;
• Agreements with regard to limit, control production, supply, investment, provision of services of particular products and for a particular quantity;
• Agreement regarding sharing of market;
• Bid Rigging Agreements (explanation to Section 3(3)(d) defines ‘bid rigging’ as an agreement between parties engaged in identical business, which has the effect of eliminating or reducing the competition for bids or adversely affecting or manipulating the process for bidding);
• Agreements in the form of Cartels. Cartels are created by anti-competitive horizontal agreements among business enterprises. They pose a great threat to competition and ultimately tend to destroy the free trade. In fact, cartels are secret agreements between business firms with the sole objective of fixing prices or sharing markets between them.

Vertical Agreements: Vertical agreements are those that take place among firms or people at various stages or levels of production in respect of production, supply, distribution, storage, sale, or pricing of products, according to Section 3(4) of the Act. A vertical anti-competitive agreement, for example, is any arrangement between a manufacturer and a distributor that has the potential to harm market competition. The Competition Act of 2002 allows for a variety of vertical agreements.

• Tie-in-Arrangement: Any agreement that requires the purchaser of goods to acquire additional items in addition to the needed commodities as a condition requirement falls under this category. Sellers often sign into such arrangements to enhance their sales and profit margins. A tie-in agreement becomes unlawful when a company takes use of its market dominance on a specific product by refusing to sell or lease that product to the consumer unless he agrees to purchase another product that the company wants him to buy.
• Exclusive Supply Agreement: Purchasers of products are bound by such agreements not to acquire or trade in goods other than those of the seller or any other person. Typically, such agreements are made by taking advantage of a market’s dominating position. For example, a buyer of a commodity may engage into an agreement with the producer that the product will not be made for any other customer. However, such agreements should not be mistaken with a legitimate and non-anticompetitive agreement between customers and sellers/producers on specifications, quality, size, and other factors.
• Exclusive Distribution Agreement: The production or supply of any items is frequently limited, restricted, or withheld under such an arrangement. This section may also include limits on the allocation of any region or market for the disposal or sale of items. If the result considerably decreases or tends to establish a monopoly in any line of business, such an arrangement may be illegal under competition law.
• Refusal to Deal: Agreements that restrict, or are likely to restrict, the persons or classes of persons to whom commodities are sold or from whom products are bought are forbidden under the Act because they have anticompetitive characteristics.
• Resale Price Maintenance: Any agreement to sell products on the condition that the prices to be charged on the resale by the purchaser be the prices indicated by the seller unless it is expressly stated that prices lower than those prices may be charged is referred to as resale price maintenance. In other words, any endeavor by an upstream supplier to regulate or maintain the minimum price at which a product is resold by its client is referred to as resale price maintenance. As a result, resellers are less likely to compete aggressively, lowering profits. Restricting a reseller’s authority to determine a price by requiring that a product be resold at a specified margin or limiting the discounts that a reseller may give is banned.
• Permitted Agreements: The Competition Act of 2002 provides for certain exceptions which meant for the protection of Intellectual Property Rights (IPRs). As per section 3(5) prohibition for anti-competitive agreements will not affect the right on any person to restrain any infringement of, or to impose reasonable conditions as may be necessary for protecting, any rights under (i) The Copyright Act, 1957, (ii) The Patents Act, 1970, (iii) The Trade and Merchandise Marks Act, 1958, (iv) The Geographical Indications of Goods (Registration and Protection) Act, 1999, (v) The Designs Act, 2000, (vi) The Semi-Conductor Integrated Circuits Layout-Design Act, 2000 Similarly, exemption against anti-competitive agreements is also provided in cases of export.

Section 3(5)(ii) states that anti-competitive agreement restrictions do not apply to a person’s ability to export products from India to the extent that the agreement pertains to export of goods or services.

Abuse of Dominant Position: A person or a business is said to be in a dominating position when it is in a position of strength that allows it to function independently of competitive pressures in the relevant market or has a favorable impact on its competitors, consumers, or the relevant market. Several other nations’ competition laws have defined dominant position in substantially similar terms. “A corporation is in a dominant position if it has the power to operate independently of its competitors, customers, suppliers, and, ultimately, the final consumer,” according to the European Commission’s Glossary. The concept of “dominant position” under the Competition Act of 2002 is based on the above-mentioned criteria of relevant market.

Thus, to establish an abuse of dominance, it is required to first establish that the company in question possessed a position of dominance in terms of a certain product market and the geographic market for that product. The Act’s section 4 addresses the prevention of such misuse. It states that no company or organization should take advantage of its dominating position. It also specifies what actions constitute abuse of the Dominant position. The acts which amount to ‘abuse of dominant position’ are enshrined below:

• Imposition of unfair or discriminatory conditions in the purchase or sale of goods or services, or pricing in the purchase or sale of goods and services (including predatory prices). “Predatory pricing” refers to the practice of selling goods at a lower price than the cost of production or supply of service to minimize or diminish competition. For the assessment of predatory pricing costs, the Competition Commission of India (Determination of Cost of Production) Regulations, 2009 were implemented. Regulation 3(1) states that average variable cost will be used as a proxy for marginal cost.
• To the detriment of consumers, limiting or restricting the production of products or services, or placing limits on technological or scientific advancement linked to goods or services.
• Indulging in practices which result in denial of market access in any manner.
• Taking advantage of a dominant position in one relevant market to safeguard or join another relevant market. One of the concerns about section 4 of the Act is that it does not require a finding of a considerable detrimental effect on competition, as it does in the case of anti-competitive agreements and combinations. When dealing with instances falling under section 4, the sole area where AAEC is to be considered is in the elements that the Commission is obligated to examine when considering whether a business has a dominating position under section 19(4) of the Act.

While determining whether an enterprise enjoys a dominant position, section 19(4)(1) states that the Commission may consider “any relative advantage, by way of contribution to economic development, by the enterprise enjoying a dominant position having or likely to have an appreciable adverse effect on competition.”

Regulations of Combinations is the third area of focus of Competition Law. The Competition Act regulates mainly three types of combinations:

• Acquisition of shares, voting rights or assets of another entity by a person or an enterprise;
• Acquiring control by a person over enterprise;
• Merger or amalgamation between or amongst enterprise.

Section 5 of the Act defines a combination by establishing specified thresholds below which combinations are not subject to the Competition Act’s scrutiny. The key reasoning for imposing such restrictions might be that combining tiny businesses or entities will not have a significant negative impact on competition in Indian marketplaces.

5.2. Types of Interventions

Penalties are prescribed by the Competition Act of 2002 for contravention of orders of the CCI. The Competition Commission of India may cause an inquiry to be made into compliance of its orders or directions made in exercise of its powers under the Act. If any person, without reasonable clause, fails to comply with the orders or directions of the Commission issued of the Competition Act, he shall be punishable with fine which may extend to one lakh rupees for each day during which such non-compliance occurs, subject to a maximum of ten crore rupees, as the Commission may determine.

If any person does not comply with the orders or directions issued, or fails to pay the fine imposed above, he shall, without prejudice to any proceeding, be punishable with imprisonment for a term which may extend to three years, or with fine which may extend to 25 crore rupees, or with both, as the Chief Metropolitan Magistrate, Delhi may deem fit.

Penalty for failure to comply with directions of Commission and Director General: Section 43 states that if any person fails to comply, without reasonable cause, with a direction given by the Commission or the Director General, such person shall be punishable with fine which may extend to one lakh rupees for each day during which such failure continues subject to a maximum of one crore rupees, as may be determined by the Commission.

Power to impose penalty for non-furnishing of information on combination: If any person or enterprise who fails to give notice to the Commission under sub section (2) of section 6, the Commission shall impose on such person or enterprise a penalty which may extend to one percent of the total turnover or the assets, whichever is higher, of such a combination.

Penalty for making false statement: Section 44 states that if any person, being a party to a combination, makes a statement which is false in any material particular, or knowing it to be false; or omits to state any material particular knowing it to be material, such person shall be liable to a penalty which shall not be less than 50 lakh rupees but which may extend to one crore rupees, as may be determined by the Commission.

Power to impose lesser penalty: When will commission impose lesser penalty? If any producer, seller, distributor, trader, or service provider included in any cartel, which is alleged to have violated section 3, has made a full and true disclosure in respect of alleged violations and such a disclosure is vital, the Commission may impose upon him a lesser penalty than as prescribed under the Act or rules or regulations.

6. United Kingdom Competition Law

Both British and European features have an impact on UK competition law. For disputes with a purely national component, the most relevant legislation are the Competition Act of 1998 and the Enterprise Act of 2002. However, if a company’s actions have a cross-border impact, the European Commission has jurisdiction to address the issue, and only EU law would apply. Nonetheless, section 60 of the Competition Act 1998 stipulates that UK laws must be administered in accordance with European law.

The UK competition rules focus on the following areas:

• Banning competitor agreements or understandings that are likely to hinder or limit competition (unless they can be proved to provide consumers with advantages that exceed any competition constraints);
• Banning non-competitive arrangements or understandings (such as agreements between suppliers and customers) that are likely to hinder or limit competition (unless they can be proved to provide consumers with advantages that offset any competition constraints);
• Banning certain “abusive” behaviors by businesses with a dominant market position that allows them to behave without regard for their consumers, rivals, or suppliers;
• Banning or amending mergers, acquisitions of businesses/assets, or joint venture formations that are likely to hinder or limit competition;
• Where the parties involved meet certain thresholds, such transactions may trigger the UK Competition and Markets Authority’s (CMA) merger control powers;
• Where competition across a particular market appears to be failing, the authorities have the power to review the entire market and investigate how competitive conditions might be improved, even if no specific competition infringements are suspected or later identified.

Chapters I and II of the Competition Act 1998 make it illegal to engage in anti-competitive behavior that might harm UK trade. Articles 101 and 102 of the Treaty on the Functioning of the European Union ban anti-competitive behavior when it affects commerce between EU member states (TFEU). The EU laws will no longer apply in the UK as of January 1, 2021, although UK enterprises engaged in cross-border operations inside the EU will continue to be subject to EU competition law as well as local competition law in EU member states.

6.1. Aims and Objectives of the UK Competition Law

The restriction in the United Kingdom is not absolute. Section 9 of the Competition Act establishes an exception to the Chapter I prohibition in cases where an agreement, while anti-competitive in principle, provides benefits (such as improving production or distribution or promoting technical or economic progress) that outweigh any harm to competition, provided that:

• Consumers receive a fair share of the resulting benefits;
• The restriction is necessary to achieve those benefits;
• The restrictions do not impede the achievement of those benefits.

A study of the economic implications of the limits in issue will be required to determine whether or not an agreement qualifies for the exception set forth in section 9. It is no longer required or practicable to get a formal judgment from the authorities verifying that the exemption conditions have been satisfied in a specific situation. Instead, the parties and their counsel must do their own research, with limited chances for competition authorities to provide case-specific assistance (although there is extensive generic guidance available from the competition authorities and past decisions will often also inform the analysis).

Infringements of competition under Chapter I are divided into two categories: infringements by object and infringements by effect. When it comes to infringements by object, the agreement’s sole objective is to impose an anti-competitive restriction (for example, price fixing or market sharing). Infringements by object are the most serious kind of competition infringement, and it is highly improbable that the exemption in section 9 would apply in such situations.

Infringements by effect are prohibitions that have a restrictive effect in practice, whether intended or not, but are not designed to restrict, prevent, or distort competition. Such restrictions are considerably more likely to be covered by the section 9 exception, albeit changes to the terms of the infringing agreement are frequently required to ensure that the exemption standards are met completely. From the standpoint of competition compliance, limits by object pose the greatest risk because they are the most likely to result in fines against a company and/or individuals. However, being able to recognize potential limits by effect is critical so that actions can be made to ensure that the exemption conditions are met and/or any compliance risk is minimized.

6.2. Abuse of Dominant Position

The Act’s operative provision dealing with abuse of dominating position is Section 4 of the Act. This rule is based on Article 102 of the Treaty on the Functioning of the European Union, which prohibits the abuse of dominance in the European Union (TEFU). Section 4 makes it illegal for any company to take advantage of its dominating position. The term “dominant position” is defined in the Act as “a position of strength enjoyed by an enterprise in the relevant market in India that allows it to operate independently of competitive forces prevailing in the relevant market; or affect its competitors, consumers, or the relevant market in its favour.” The Act’s definition of “dominant position” is consistent with the European Commission’s interpretation of the notion in United Brand v. Commission of the European Communities, Case No. 27/76 (1976).

Article 82 of the EC establishes the notion of abuse of dominant position. In United Brands, the Court established the standard notion of dominance: “The dominance position referred to in Article 82 refers to an undertaking’s position of economic strength that allows it to prevent effective competition on the relevant market by granting it the power to act to a significant extent independently of its competitors, customers, and ultimately of its consumers.”

To determine a company’s dominating position, there are two primary elements to consider. The dominating undertaking’s capacity to operate autonomously is the first, and its power to prevent prospective rivals from entering the market is the second. Under the Treaty, dominant positions are evaluated across the Community market, or at least a significant portion of it. The amount of market to consider will be determined by the product’s nature, replacement items, and customer perception. The Court noted in its Hoffmann LaRoche decision that wrongful use of a dominating position is an “objective notion.”[15] It was a “recourse to techniques other than those that condition regular competition in goods and services based on commercial operator interactions,” with the result of further limiting competition in a market already weakened by the company’s presence. Abuse of a dominating position must have, or be expected to have, a negative impact on trade between Member States. This indicates that behavior that affects just a single national market is not subject to the EC Treaty’s competition rules.

In Chapter (II) Section18 of the Competition Act of 1998, the restriction on misuse of dominant position is stated. “Any action on the part of one or more enterprises that amounts to the abuse of dominant position in a market is forbidden if it may impact trade within the United Kingdom,” says Section 18(1). Section 60 of the Act ensures that the interpretation is consistent with Community Law. Section 18(2) of the Act offers an example of behavior that might be banned under Section 18(1). The term “United Kingdom” refers to the whole of the United Kingdom or any portion of it, as defined in Section 18(3). In the House of Lords, Lord Simon said that supremacy must exist inside the United Kingdom, even if the geographical market in which such dominance is held is greater than the United Kingdom.

The Competition Appellate Tribunal decided in Better Care Group Ltd. v. Director-General of Fair Trading that Chapter II on the restriction on abuse of dominant position may apply to a public-sector entity when interpreting the term “undertakings.”[16]

6.3. Mergers, Combinations, and Acquisitions

The Treaty of Rome included no express provision for merger control, but the absence of a regulatory framework was recognized as an issue. The panel stated in a study from 1966 that Article 82 would encompass mergers that amounted to an abuse of dominant position. Although the European Court of Justice upheld this viewpoint in Continental Can,[17] it was contentious. Continental Can, a US firm with a monopoly in the metal container industry, wanted to take control of a Dutch business that competed in the same market. The purchase of the target firm, according to the Commission, would be an abuse of Continental Can’s dominant position since it would remove future competition between the two companies. The Commission’s decision was reversed on appeal, although the Court accepted the Commission’s reasoning in respect to the possibility of Article 82 applicable to the enlargement of a dominating position via a merger.

Only concentrations with a Community dimension are subject to the merger regulation’s strictures. When a transaction achieves the Article 1 turnover level, a Community dimension is created. After deducting taxes directly relevant to turnover, aggregated turnover must consist of the sums obtained by the enterprises involved in the previous financial year from the sale of items and supply of services falling within the undertaking’s routine activity. Under Article 4 of the Merger Regulation, undertakings must inform the Commission prior to implementing concentrations having Community aspects. The EU Court of First Instance said in Gencor Ltd v. Commission that merger control exists “…to prevent the formation of market structures that may produce or reinforce a dominant position and not to check directly probable abuses of dominant positions.”[18]

The Office of Fair Trading (OFT) and the Competition Commission were the two main authorities in charge of merger regulation in the United Kingdom (CC). Under the 2002 Act’s merger control clause, there are primarily three steps: recommendation, investigation, and report and corrective action. The OFT will recommend a merger investigation to the CC as a standard practice. After a period of inquiry, the CC will create a report and will be required to take measures to correct any unfavorable impacts in the competition that the report identifies.

6.4. Statutory Basis of Investigations

The CMA has the authority to undertake investigations at commercial (and, in certain situations, residential) locations, as well as to take copies of papers, electronic files, e-mails, and, in some cases, original documents. These powers can also be used to search the premises of a company that isn’t under suspicion but has material that could be useful in an inquiry into another company, such as a customer, competitor, or supplier. These “dawn raids” can happen at any time. In addition, the CMA has the authority to question those who are associated to the companies under investigation. During a dawn raid, such mandatory interviews can be required with little notice. For more information about dawn raids and the competition authorities’ powers.

6.5. Civil and Criminal Penalties

Any infringement of UK competition law could have serious consequences. In particular:

• In the UK, it is illegal for an individual to enter into a cartel agreement with competitors to rig bids, fix prices, share markets or customers, or limit production or supply (the “cartel offence”), subject to certain statutory exclusions and defenses (for agreements entered into prior to 1 April 2014, the individual must have acted dishonestly; for agreements entered into on or after 1 April 2014, the dishonesty requirement has been removed). A conviction for a cartel offense can result in a maximum sentence of five years in prison and/or a fine of an infinite amount.
• Businesses found to be in violation of competition rules might face very large fines from the UK competition authorities (up to 10 per cent of worldwide aggregate group turnover under UK competition law).
• Contractual limits that violate competition law will be declared void and unenforceable, which means they will not be enforced in court. If the void limits reach to the heart of the commercial agreement, and their removal changes the meaning of the agreement, the entire agreement may be void.
• Directors of UK corporations who violate UK competition law could be barred from serving on the board for up to 15 years.
• Failure to comply with the CMA’s procedural rules (such as delivering requested information) may result in fines for businesspersons and businesses. They may also face criminal culpability if they hinder a CMA investigation (which can result in additional fines and/or prison sentences of up to two years).
• Third parties may be eligible to claim for damages if they have sustained a loss because of any banned anti-competitive agreements or conduct under UK competition law (and are increasingly doing so).
• Competition authority decisions that a company has broken the law are always widely publicized, resulting in considerable damage to the company’s reputation.

6.6. Exemptions From Liability

Anti-competitive agreements do not have a comparable exception. In some cases, however, a dominating firm may be able to demonstrate that its ordinarily aggressive behavior has an objective basis. For example, a corporation may refuse to provide a client because of its bad credit rating, which would be considered legitimate business interests and hence would not be considered abusive conduct under Chapter II or Article 102. Only when such behavior goes beyond what is required to defend the company’s interests can it be considered an abuse.

Unless it is a serious cartel, just because an agreement restricts competition does not imply it is automatically barred. It’s possible that a contract that comes under the limitations of Chapter I or Article 101 will be excluded or exempted from the competition regulations. For example, an agreement that would otherwise be subject to Chapter 1 or Article 101 may be assumed to be harmless if the parties are not actual or potential competitors, or if their market shares are sufficiently low that no real impact on competition or trade within the UK or between EU member states can be expected. However, regardless of market shares, agreements that are regarded to limit by object, in particular cartel behavior, will almost always be found to violate the competition rules.

Other agreements may be exempted under a ‘block exemption,’ which is a type of group exemption that exempts any agreements that fall within its scope. Depending on the nature of the agreement or the market sector in question, different block exemptions may apply. Each one specifies requirements that must be met for the agreement to be block exempted. Conditions such as those linked to the parties’ market shares and the sorts of restrictions mentioned in the agreement are examples of these. Several EU block exclusions have been carried over into UK domestic law, with minor amendments, and will continue to apply under UK competition law after Brexit.

Even if an agreement does not fall neatly inside a block exemption, it is not inevitably unenforceable or illegal. An agreement may also be exempted on the basis that the benefits exceed the constraints on competition. The evidentiary burden for fulfilling the requirements for individual exemption is quite high, and firms must ensure that they self-assess their compliance with the competition regulations; except in very restricted cases, it is not feasible to seek clearance from the competition authorities.

7. Conclusion

It can be inferred that, there are many similarities and little differences between Competitive legal systems in the five mentioned Jurisdictions (UAE, KSA, Philippines, India, and UK). The following table compare between the five legal systems as follow:

	UAE	Saudi Arabia	Philippines	India	United Kingdom
Anti-Competitive Conducts
Horizontal Agreement	Yes	Yes	Yes	Yes	Yes
Vertical Agreements	Yes	No	Yes	Yes	Yes
Abuse of Dominant Position	Yes	Yes	No	Yes	Yes
Mergers and Acquisitions	Yes	Yes	Yes	Yes	Yes
Instruments
Per Se Rule	Yes	Yes	Yes	Yes	Yes
Rule of Reason	Yes	Yes	Yes	Yes	Yes
Enforcement
Public Enforcement	Yes	Yes	Yes	Yes	Yes
Private Enforcement	No	Yes	No	No	Yes
Exemptions and Exceptions
Exemptions	Yes	Yes	Yes	Yes	Yes
Exceptions	Yes	Yes	Yes	Yes	Yes
Types of Intervention
Imprisonment	No	No	Yes	Yes	No
Fines	Yes	Yes	Yes	Yes	Yes
Closure	Yes	Yes	No	Yes	Yes
Compensation Damages	Yes	Yes	No	Yes	Yes
Score*	12	12	10	13	13

*An overall evaluation tool – Dummy variable; takes “1 point” for “Yes” and “0 points” for “No” – Top score = 14 points.

Finally, competition law exists to protect the competitiveness of the market by prohibiting anti-competitive conduct, irrespective of which type of agreement practices have occurred. The law seeks to prevent any negative effect on competition, abuse of dominance, and undermining of market competitiveness, as well as regulate mergers and acquisitions by instating requirements and imposing penalties on infringers.

8. Recommendations

Considering the U.A.E. Law, we make the following recommendations:

• Increasing the independence of the competitive committee, especially concerning the member’s appointment, budget, supervision, and competences.
• Providing some severe sanctions which realize the public deterrence.
• Amending the prescribed penalty to include in all cases the confiscation of profits obtained from the activity in violation of the provisions of this law in addition to the originally prescribed penalty.
• Determining the financial resources of the competitive committee.
• Amending Article 6 of the provisions of the law and settling for a flexible objective criterion that allows the technical authority to assess the extent of achieving control over the relevant market in each case alone, without requiring the establishment to exceed an account share (determined by the decision of the Council of Ministers) of the total transactions in the relevant market. If this is necessary, then we consider raising the percentage required to consider the facility in a dominant position by not less than 40% of the total transactions in the relevant market.
• Providing exemption from punishment or commutation of punishment if any violator initiates to report the crime and present his evidence and documents whenever that would reveal the crime (“Leniency Policy”).
• Obligating all establishments to cooperate with the Competition Regulatory Commission and not to delay in providing them with any information requested to facilitate their work, and to arrange a financial penalty for violating that obligation.
• Including a text to authorize the Chairman of the Competition Committee, after the approval of the majority of the committee’s members, to issue binding recommendations to the violating firm to amend its conditions in line with the text of the law within a specified period and before commencing the initiation of criminal proceedings, in a manner that contributes to the effectiveness and speed of competition protection.
• Working to prepare a database of all practices restricting competition considering the development of economic activity in the UAE market, and to update and develop it permanently to serve the work of the agency in all areas related to competition regulation.

Considering the K.S.A. Law, we recommend the following:

• The Saudi Competition law falls short to cover every aspect, as they do not stipulate for well-defined provisions regulating the Saudi competition authority.
• Nonetheless, it is worth mentioning that Competition law is a relatively new field in the Middle Eastern region, and it continues to evaluate and fill gaps in legislation to address this deficiency.

Considering the Philippine Law, the observation is:

• The Philippine Competition Act did mention all types of anti-competitive conducts, horizontal agreement, vertical restraints, mergers, and acquisitions.
• It follows the two types of instruments, per se and rule of reason.
• Although private enforcement is not mentioned, public enforcement is active under the enforcement approach.
• Exemptions and exceptions are stated explicitly in the provisions of the act.

Considering the Indian Law, the observation is:

• Indian law has overlooked certain key parts of competition law that may have been included in the present Act. For example, settlement and plea agreements, which are available in other countries, make the regulatory and adjudicatory process faster and more effective, but India has chosen not to use them, which is one of the reasons for the delays in receiving final decisions.
• Another issue that has recently surfaced is the vagueness of the commission’s authority.
• Several cases before the Competition Appellate Tribunal have been dismissed because the Commission failed to follow natural justice principles or committed other procedural mistakes.
• Further, the government must address the growing backlog of cases due to a staffing shortage.

Considering the United Kingdom Law, the observation is:

• The goal has been to elucidate the elements that have impacted the evolution of this corpus, both historically and in general. At this level, the ideological commitment to the value of free markets controlled to assure the absence of development and exploitation of market power may be the most important predictor of effective policy. This devotion has a long history in the United Kingdom.
• However, a root-and-branch review of policy coherence and institutional fit has only lately been performed, and change has only recently been adopted. The availability of, and widespread acquaintance with, the EC competition law standard makes this considerably less dangerous.
• One possible threat to the economic and philosophical coherence of future British competition policy is the management of the interaction with broader political ambitions, whether cultural, environmental, commercial, or otherwise. It is possible that the pendulum may soon swing back to market protectionism and intervention in various ways.
• Such invasions run the danger of clouding the competition law corpus’s clarity of aim. This might be politically acceptable in some cases. Those who value competition policy coherence must guarantee that, when such dilutions are permitted and occur, the arguments are clear and convincing.

9. References

• BSA Ahmad Bin Hezeem & Associates LLP, Cartels: UAE Chapter, Mondaq (Jun. 17, 2019).
• Competition System, Bureau of Experts at the Council of Ministers.
• Alisha Ansari, What is the scope of competition law in the UAE? – A comparative study with developed and developing nations, Master Thesis submitted at The School of Graduate and Postdoctoral Studies The University of Western Ontario London, Ontario, Canada (2013).
• Barry Rodger, The UK Competition Regime: A Twenty Year Retrospective, University of Strathclyde Blog (May 26, 2021).
• Jeremy Lever, The development of British competition law: A complete overhaul and harmonization, WZB Discussion Paper, No. FS IV 99-4, Wissenschaftszentrum Berlin für Sozialforschung (WZB), Berlin (1999).
• Mark E. Williams, The Effectiveness of Competition Policy in the United Kingdom, Oxford Review of Economic Policy, Vol. 9, No. 2, Competition Policy, pp. 94-112 (1993).
• Gagan Anand, Shivani Anand, Indian Competition Law: a Comprehensive Analysis of MSMEs and Bid Rigging, International Bar Association (Jul. 6, 2021).
• Charanya Lakshmikumaran, Neelambera Sandeepan and Prathamesh Pareek, Competition Law in India – 2021, a year in review, Lakshmikumaran and Sridharan Attorneys (Jan. 31, 2022).
• Charanya Lakshmikumaran and Neelambera Sandeepan, The Private Competition Enforcement Review: India, The Law Reviews, available at: https://thelawreviews.co.uk/title/the-private-competition-enforcement-review/india, (Feb. 25, 2022).

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[1] Thomas W. Ross, Introduction: The Evolution of Competition Law in Canada, Review of Industrial Organization, Vol. 13, No. 1/2, Special Issue: Canadian Competition Law after Ten Years of the Competition Act, pp. 1-23 (Apr., 1998).

[2] José Antonio Ocampo, Uncertainties surrounding the global economy and their implications for the global development agenda, Economic and Social Challenges and Opportunities: A Compilation of the United Nations High-level Advisory Board on Economic and Social Affairs, pp. 16-31 (2020).

[3] Charlotte Edmond, From fishing village to futuristic metropolis: Dubai’s remarkable transformation, World Economic Forum, available at: https://www.weforum.org/agenda/2019/11/dubai-uae-transformation/ (Nov., 2019).

[4] Federal Law No. 4 of 2012, Regulation of Competition, Corresponding to 24 Dhu al-Qi’dah 1433 AH, available at: https://www.ilo.org/dyn/natlex/docs/ELECTRONIC/92435/108121/F-584501484/federal_law_4_2012_en.pdf.

[5] Id., art. 2.

[6] Id., art. 5; Belinda S Lee, Meaghan Thomas-Kennedy & Ariel Rogers, United Arab Emirates- Cartels: Enforcement, Appeals & Damages Actions, 9th ed., Global Legal Group Ltd., London, p. 249 (2021).

[7] Concurrence SA v. Sony, Paris 22 Oct. 1997, D-1997, IR. 257.

[8] The Law on the Protection of Competition and the Prohibition of Monopolistic Practices, Law No. 3 of 2005, available at: https://wipolex-res.wipo.int/edocs/lexdocs/laws/en/eg/eg008en.pdf.

[9] Federal Law No. 4 of 2012, Regulation of Competition, Corresponding to 24 Dhu al-Qi’dah 1433 AH, Arts. 5 (e) and 5 (f).

[10] Federal- Act No. 18 of 1981, Concerning Organizing Trade Agencies, available at: https://www.tlg.ae/source/uploads/ck_files/1548054590.pdf.

[11] Supra Note 4, art. 6(2).

[12] Id., art. 6(1).

[13] Regulation of Competition, United Arab Emirates Ministry of Economy, available at: https://www.moec.gov.ae/en/regulation-of-competition.

[14] Statement of Object, Republic Act No. 10667, available at: https://www.officialgazette.gov.ph/2015/07/21/republic-act-no-10667/.

[15] Hoffmann-La Roche & Co. AG v. Commission of the European Communities, Case 85/76, Judgment of the Court of 13 February 1979.

[16] Better Care Group Ltd. v. Director-General of Fair Trading, 1006/2/1/01.

[17] Europemballage Corporation and Continental Can Company Inc. v. Commission of the European Communities, Case 6-72, Judgment of the Court of 21 February 1973.

[18] Gencor Ltd v. Commission of the European Communities, Case T-102/96, Judgment of the Court of First Instance (Fifth Chamber, extended composition) of 25 March 1999.