- What are the Prohibited Practices that Violate Commercial Competition?

The Competition Law in Saudi Arabia prohibits any practices or agreements (written or oral, explicit or implicit) between establishments if their objective or effect is to violate fair competition.

Here are the most prominent prohibited practices under Article Five of the Law:

1. Manipulating Prices and Terms of Sale

The Law prohibits any agreement to raise, lower, or fix prices of goods, or determine terms of sale or purchase. This includes any practices aimed at influencing the natural price in the market.

2. Controlling Production and Flow of Goods

It is forbidden to agree on:

• Determining volumes, weights, or quantities of production of goods or performance of services.
• Limiting the flow of goods and services to markets (or removing them) by hiding or storing them without justification or refusing to deal in them.

3. Market Allocation and Blocking Services

These practices are clear violations and include dividing markets according to any criterion, especially:

• Geographical regions.
• Distribution centers.
• Type of customers.
• Seasons and time periods.

It is also prohibited to block goods and services available in the market totally or partially from a specific establishment, or obstruct its entry into the market.

4. Restricting Investment and Development

The Law prohibits freezing manufacturing, development, distribution, or marketing processes, and all other aspects of investment or limiting them.

5. Tender Collusion

Includes collusion or coordination in government and non-government tenders and competitions in any form. (Exceptions are made for declared joint offers required by the nature of the project).

Reference: Competition Law (Article 5) and its Implementing Regulations (Article 8) - General Authority for Competition