- The Executive Regulations for the Law concerning theProtection of Competition and Prohibition of Monopolistic PracticesIssued by Law No. 3 of 2005
- Part OneGeneral Rules And Definitions
- Part Two Agreements And Contracts Between Competing Persons
- Part Three Agreements Or Contracts Between A Person And Any Of Its Suppliers Or Clients
- Part FourAbuse Of Dominant PositionIn A Relevant Market
- Part Five Public Utilities And Essential Products
- Part SixThe Authority For The Protection Of Competition AndThe Prohibition Of Monopolistic Practices
- Part Seven Filing Complaints And The Procedures OfInquiry, Inspection, Collection Of Information And Receiving Notifications
Prime Ministerial Decree The Prime Minister And in accordance with the view of the Council of State Decides
There shall come into force the provisions of the executive regulations of the Protection of Competition and Prohibition of Monopolistic Practices law issued by law No. 3 of 2005 hereby attached.
This Decree shall be published in the Official Gazette and shall be enforced as of the following day of its publication.
The Executive Regulations for the Law concerning the
Protection of Competition and Prohibition of Monopolistic Practices
Issued by Law No. 3 of 2005
Part One
General Rules And Definitions
Chapter One
In the application of the provisions of these Regulations the law means the Law of Protection of Competition and the Prohibition of Monopolistic Practices issued by the Law No. 3 of 2005 and the Competent Minister means the Prime Minister.
The Authority means the Authority for the protection of competition and prohibition of monopolistic practices established in accordance with the provisions of the law and the board means the board of directors of the Authority for the protection of competition and prohibition of monopolistic practices.
Economic activities shall be undertaken in a manner that does not prevent, restrict or harm the freedom of competition in accordance with the provisions of the Law and these Regulations.
The provisions of the Law and these Regulations shall apply to all acts including practices, contracts or agreements committed abroad, which constitute crimes according to the Law if they prevent, restrict or harm the freedom of competition in Egypt.
In the application of the Law and these Regulations, the words and the phrases stipulated in the following articles shall have the meanings set out for each of them.
Article 5: Persons
Persons mean natural or juristic persons, economic entities, unions, federations, associations and financial grouping, whatever the method of their establishment, mechanisms of their financing, their nationalities, head quarters or main centers of activities.
Persons referred to in the first paragraph include, the related parties that are composed of two or more persons, each of them has an independent legal personality, where the majority of stocks or shares of one of them is owned, directly or indirectly, by the other party or where the majority of stocks or shares in both parties are owned by one party.
Related parties also include the person or persons who are subject to the actual control of another person. Actual control means every arrangement, agreement or ownership of stocks or shares, regardless of its percentage, in a manner that leads to the control of the management or decisions-taking.
Article 6: The Relevant Market
The relevant market means the market that consists of two elements: the relevant products and the geographical area. Each of these elements is determined as follows:
First: The relevant products: They are the products that can be considered, from the consumers' point of view, practical and objective substitutes to each other. In determining such products the following criteria, in particular, shall be taken into consideration: Secondly: Geographical area: It is the geographical area where the circumstances of competition are homogenous. In this regard, the potential probabilities of competition shall be taken into consideration and any of the following criteria: Article 7: Dominance
The dominance of a person in a relevant market is achieved with the availability of the following elements: Article 8
The person shall have effective impact on the prices of the products or the quantity supplied in the relevant market if this person has the ability, through his/her individual acts, to determine the prices of these products or the quantity supplied in that market where his/her competitors do not have the ability to prevent these acts, taking into consideration the following factors:
a) The person's share in the relevant market and his/her position in comparison to the
remaining competitors. b) The conduct of the person in the relevant market in the previous period. c) The number of competing persons in the relevant market and its relative impact
on the structure of that market. d) The ability of the person and his/her competitors to obtain the raw materials necessary for production. e) The existence of barriers facing other persons to enter the relevant market.
Article 9: Competing Persons
Competing Persons shall mean any of the persons who have the ability to carry out the same activity in the relevant market at the present time or in the future.
Part Two
Article 10
The agreements and contracts concluded between the Competing Persons in the Relevant Market include verbal and written agreements and contracts.
Article 11
Agreements or contracts between Competing Persons in any relevant market shall be prohibited if they are intended to cause any of the following:
a) Increasing, decreasing or fixing prices of sale or purchase of products subject matter of dealings. Determination of price shall cover due returns on installments, guarantee duration, after sale services and other contractual conditions that influence the purchasing or selling decision.
b) Dividing product markets or allocating them on grounds of geographic areas, distribution centers, customer base, goods, seasons or time periods.
c) Coordination with regard to proceeding or refraining from participating in tenders, auctions, bids and other calls for procurement. The indications that are taken into consideration for the existence of such coordination are, in particular, the following: d) Restricting the manufacture, distribution or marketing or limiting the distribution of services in terms of its kind or volume or applying conditions or restrictions for their availability.
Article 12
Agreements or contracts between a person and any of its suppliers or clients are prohibited if they are intended to restrict competition.
The evaluation of whether or not the agreement or contract between a person and any of its suppliers or clients would restrict competition is based on the inquiry made by the Authority on a case by case basis in light of the following factors: Part Four Article 13
A Person holding a dominant position in a relevant market is prohibited from carrying out any of the following:
a) Undertaking an act leading to the non-manufacturing, non-production or nondistribution of a product, whether totally or partially, for a certain period or certain periods of time. Period or periods of time shall mean the period or periods of time that suffice to result in the prevention, restriction or harm of the freedom of competition.
b) Refraining from entry into sale or purchase transaction regarding a product with any Person or totally ceasing to deal with it in a manner that results in restricting that Person's freedom to access or exit the market at any time, which includes imposing financial conditions or obligations or abusive contractual conditions or conditions that are unusual in the activity subject matter of dealings.
Refraining from entry into transactions with any Person or totally ceasing to deal with it shall not be prohibited if justified on the basis that this Person does not have the ability to fulfill its obligations arising from the contract.
c) Any act that limits distribution of a specific product, on the basis of geographic areas, distribution centers, clients, seasons or periods of time among Persons with vertical relationships. Vertical relationship shall mean the relationship between the Dominant Person and any of its suppliers or between the Dominant Person and any of its clients.
d) Imposing as a condition, for the entry into a sale or purchase agreement of a product, the acceptance of obligations or products unrelated by their very nature or by commercial custom to the original transaction or agreement.
e) Discriminating between sellers or buyers having similar commercial positions in sale or purchase prices or in the terms of the transactions, in a manner that weakens their ability to compete with one another or leads to drive out some of them from the market.
f) Refraining, whether totally or partially, from producing or providing a product that is circumstantially scarce in the market when its production or provision is economically possible.
A circumstantially scarce product shall mean the product of which the available quantities do not fulfill except a small percentage of the demand size in the Relevant Market.
g) For the Person in a dominant position to dictate on Persons dealing with it not to allow the usage of their utilities or services to any of its competitors, despite this being economically possible.
These utilities and services shall include those which are privately owned by those dealing with the Person in a dominant position, and which are indispensable for the competing persons to enter or to remain in the market.
e) Selling products below their marginal cost or average variable cost.
Marginal Cost shall mean the share of one unit of a given product from the total costs within a certain period of time. The Variable Cost shall mean the cost which changes with the change in the volume of products provided by the Person during a certain period of time.
Average Variable Cost shall mean the total variable costs divided by the number of units of products.
For the determination of whether the product is sold below their marginal cost or the average variable cost the following elements shall be taken into consideration: f) Imposing an obligation on a supplier not to deal with a competitor.
The non-dealing shall mean the refraining from dealing with a competing person, whether totally or reducing the size of dealing with him to the extent that would drive it out of the market or prevent the potential competitors from entering the market.
Part Five
Public Utilities And Essential Products
Chapter One
Article 14
The provisions of the Law and these Regulations shall not apply to public utilities managed by the State. The decisions, agreements, contracts and works related to these public utilities managed by the State are not subject to any of the acts provided for in Articles 6, 7 and 8 of the Law.
Article 15
Any company subject to the provisions of the Private Law and managing a public utility, before concluding agreements, contracts or carrying out works related to the activity of this utility and is within the scope of the prohibitions set out in Articles 6, 7 and 8 of the Law, may request the Authority to exempt all these agreements, contracts or works or any of them from the prohibition where this is in the public interest or for attaining benefits to the consumers that exceed the effects of restricting the freedom of competition.
Article 16
The request referred to in Article 15 of these Regulations and the decision on it shall be in accordance with the following measures and procedures: Article 17:
The exemption granted by the Authority is valid for two years, and may be renewed upon the request of the concerned parties sixty days prior to the end of the exemption period. The Authority reviews the renewal request in accordance with the same provisions and procedures set out by Article 16 of these Regulations.
No. 1316 of 2005
Issuing the executive regulations of Protection of Competition and
Prohibition of Monopolistic Practices law No. 3 of 2005
After reviewing the Constitution,
The Law concerning the Protection of Competition and Prohibition of
Monopolistic Practices issued by law No. 3 of 2005,
Article (1)
Article (2)
16 August 2005 Dr. Ahmed Nazif
General Rules
Article 1
Article 2
Article 3
Chapter Two
Definitions
Article 4
Agreements And Contracts Between Competing Persons
Part Three
Agreements Or Contracts Between A Person
And Any Of Its Suppliers Or Clients
Abuse Of Dominant Position
In A Relevant Market
Public Utilities
Chapter Two
Essential Products