Continued rise of enforcement

• As illustrated in the graph below, the Authority continued to be very active on the enforcement front in 2023. The Authority has noticeably increased its presence on the field, as evidenced by the significant increase in the number of investigations and dawn raids conducted over the years.

• The Authority carried out a staggering number of 548 dawn raids in 2023, meaning an average of 2.2 dawn raids every business day. The Authority investigated 442 entities and ultimately indicted 186 of them.
• In 2023, the Authority studied over 77% of the complaints received. The majority of the complaints received related to entities active in the sectors of wholesale and retail (representing 27.7%) and manufacturing (representing 20.4%).
• The number of settlement applications more than doubled in a year as they went from 19 in 2022 to 44 in 2023. This is an undeniable evidence of the growing tendency for indicted entities to choose the settlement route as opposed to litigate against the Authority.
• Below is a chart breaking down the types of anti-competitive practices identified by the Authority as a result of its investigations and dawn raids:

• Price fixing remains the primary area of focus of the Authority as this violation alone represents 43% of the total number of all violations identified by the Authority as part of its investigations. Price fixing is being examined by the Authority both at the horizontal level (i.e., price fixing arrangements or practices between actual or potential competitors) but also at a vertical level (i.e., resale price maintenance between market players operating at a different level of the supply chain).

Investigations and studies

• In 2023, the Authority conducted market investigations in the (i) automotive, (ii) pharmaceutical/medicine and (iii) poultry sectors. The objective of these investigations was to identify potential violations of the Law including anticompetitive practices by market players.
• The chart below provides further information with respect to these investigations and their outcome:

• In addition to the investigations that it conducted, the Authority has also been active in studying certain markets and industries. In 2023, the Authority conducted two sectorial studies on (i) the agriculture and fish markets and (ii) the construction market. These studies involved a benchmark against other jurisdictions and the collection of data from market players.

Merger control updates

A total number of 313 merger control applications were submitted to the Authority in 2023, against 316 applications received in 2022. Three (3) of these applications resulted in conditional approvals. Further details in this regard is set out below:

• The applications filed in 2023 included 172 full merger control filings (i.e., requests for a No-Objection certificate) and 128 short form filings (i.e., requests for a No-Notification Required certificate). The rest were still under study by the end of the year.
• Acquisitions made up 83% of the merger control filings submitted, whereas 2% related to mergers, 14% to joint ventures and 1% to the registration of an additional car agent.
• This past year (2023) marked the first time the Authority issued three (3) conditional approvals in a single year. The entities involved operate in the IT and professional services sectors. The conditions imposed on the parties to these transactions subject to a conditional clearance include:
  • Refraining from imposing exclusivity on customers
  • Transfer of assets to a fund
  • Ensuring fair pricing
  • Sharing contracts/agreements with the Authority
• On 1 November 2023, the Board of the Authority announced that new financial thresholds would apply to determine whether a transaction is reportable to the Authority (see our previous client alert on this topic).

Penalties and fines

• The total amount of fines awarded to the Authority by decisions and rulings in relation to violations of the Law amounted to SAR 123,026,634 (approx. USD 32,807,100) in 2023. For comparison, this figure was SAR 89,850,482 (approx. USD 23,960,128.53) in 2022 and SAR 189,730,000 (approx. USD 50,594,666.66) in 2021.
• In 2023, fines were imposed on companies active in the following industries:

Other major highlights of 2023

• Exemptions: In 2023 the Authority received a large number of exemption applications (13), the majority of which related to the legal sector. This came after the amendment to the applicable rules imposed on international law firms in Saudi Arabia allowing them to fully operate without a Saudi partner.
• Launch of the Compliance Program: The Compliance Program is a new service offered by the Authority: companies may for instance request from the Authority to receive training on the Law, obtain the tools required to implement an internal competition compliance policy, and obtain a certificate of completion of the program.
• Publication of Several Guidelines: In an effort to facilitate the understanding of competition law concepts and the compliance with the Law, the Authority published several guidelines in 2023, including (i) Guidelines on Vertical and Horizontal Agreements, (ii) Guidelines on Exemptions and (iii) a Guide on the Mechanism for Dealing with Settlement Applications.
• Raising Awareness: The Authority has continued to take initiatives to raise awareness of the Law by market players active in Saudi Arabia. The Authority visited a number of cities Kingdom-wide to deliver workshops, trainings and educational sessions to lawyers, entrepreneurs and economists. The Authority also successfully hosted the Fourth Arab Competition Forum as well as the World Competition Day. Internationally, the Authority participated in the World Competition Forum and the Arab Competition Network conference, where it delivered six (6) workshops.

For further details on the Saudi Competition Law and its practical impact on your operations in Saudi Arabia, please do not hesitate to contact our Saudi Competition team.

1 Competition Law issued by Royal Decree no. M/75 dated 29/6/1440H (corresponding to 6 March 2019) and its Implementing Regulations issued by a resolution of the Board of Directors of the Authority on 25/1/1441H (corresponding to 24 September 2019).

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* Content prepared by Legal Advisors in association with Baker & McKenzie Limited.