March 24th, 2024 Legal Updates

Combating Anti-Competitive Practices in Egypt’s Telecommunications Sector Egypt

In the realm of enforcing the provisions of the law and confronting monopolistic practices, the Egyptian Competition Authority (“ECA“) has taken action against a telecommunications company for abusing its dominant position by forcing customers to subscribe to fixed internet services in exchange for landline telephone services, thereby violating Article 8/d of the Law on Competition Protection and Prohibition of Monopoly Practices (Law No. 3 of 2005). The act of bundling products is a form of abusing dominant market position, wherein the dominant entity exploits its control in one market to enhance its presence or sales in another market.

Numerous complaints were received from citizens across Upper and Lower Egypt, including those covered by the “Decent Life” initiative. These complaints highlighted the refusal of the company’s sales outlets to provide standalone landline telephone services, linking them instead to acquiring fixed internet services from the same company. Subsequent investigations conducted by the ECA confirmed the validity of these claims, revealing the company’s dominant position in the provision of landline telephone services, which are essential for fixed internet connectivity. It was further uncovered that the company’s employees at sales outlets directly coerced customers into obtaining fixed internet services to access landline telephone services. Refusal by customers led to undue delays in service provision, ultimately forcing them to accept the bundling of services, in violation of legal provisions.

These anti-competitive practices not only deprive consumers of their right to choose among service providers in the Egyptian market but also hinder competing internet service providers from being able to attract potential customers. This, in turn, diminishes potential competition in the market.

In light of the established violation, the ECA’s board of directors has decided to take legal action against the company. As a result, the telecommunications company is obliged to immediately cease any practices leading to the bundling of landline telephone services with fixed internet services. Additionally, all sales, marketing, and customer service personnel are instructed to refrain from issuing any instructions, whether written, verbal, or implicit, that compel customers to bundle landline telephone services with internet subscriptions.

The telecommunications sector has been of particular interest to the ECA of late due to its importance in the digital economy. Through ongoing collaboration with the National Telecom Regulatory Authority, efforts are focused on ensuring free competition by removing regulatory barriers and fostering an investment-friendly environment.

Authors: Asad Ahmad, Head of Anti-Trust & Competition and Salma Farouq, Associate.

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