The rapid expansion of consumer delivery services through smart platforms and mobile applications has transformed the way goods and services reach consumers in Kuwait and the GCC as a whole. While this digital growth has enhanced convenience and market access, it has also raised significant competition concerns. In response, the Kuwait Competition Protection Agency (“CPA”) issued its Guideline Manual for the Consumer Delivery Services Sector Via Smart Platforms and Applications (2026) (“Guideline“). The Guideline establishes a comprehensive framework for platforms, product sellers, and delivery service providers operating in this market.

The Guideline is grounded in Competition Protection Law No. 72 of 2020 and its implementing regulations and reflects the CPA’s increasing focus on regulating digital markets. It is intended not only as an enforcement tool but also as a preventive mechanism designed to raise awareness and promote fair competition in a sector characterized by rapid innovation and high market concentration.

Purpose of the Guideline

The primary objective of the Guideline is to create a competitive environment that protects consumers while ensuring fair treatment of market participants. It applies to digital platforms that act as intermediaries between product sellers, delivery service providers, and consumers within the State of Kuwait. The Guideline excludes traditional delivery services that operate without platform mediation, as well as producers that distribute their products exclusively through their own channels.

By clarifying acceptable and prohibited practices, the CPA seeks to strike a balance between innovation and competition enforcement, particularly in a market where platforms often possess strong bargaining power over sellers and service providers.

Defining the Relevant Market

A cornerstone of the Guideline is the definition of the “Relevant Market”, which is assessed in both product and geographic terms. The relevant product market consists of consumer order delivery services facilitated through smart platforms and applications, while the geographic market is limited to the territory of Kuwait. This definition is critical, as it forms the basis for evaluating whether a platform holds a dominant position and whether certain practices may restrict or distort competition.

Horizontal and Coordinated Practices

The Guideline reiterates the strict prohibition of horizontal agreements between competing platforms, sellers, or service providers. Such practices include price fixing, market allocation, limitation of production or service capacity, restricting technical development or investment, and bid-rigging. The exchange of sensitive commercial information, such as pricing and customer data, is also considered a serious infringement, even if conducted indirectly.

In addition to formal horizontal agreements, the Guideline addresses coordinated practices that may arise without a formal agreement but nonetheless have the effect of restricting or distorting competition. These include parallel conduct, indirect coordination, or practices that facilitate collusion, particularly in data-driven digital markets. The CPA emphasizes that such conduct may fall within the scope of Articles 5 and 6 of the Competition Protection Law, even where no explicit arrangement can be established.

Vertical Relationships Between Platforms and Market Participants

The Guideline provides detailed guidance on vertical relationships between platforms and product sellers or delivery service providers. While vertical agreements are not prohibited per se, the CPA clarifies that certain practices may infringe the law where they restrict competition or exclude market participants. Key practices of concern include:

1. Resale Price Maintenance: Directly or indirectly setting or imposing minimum resale prices.
2. Most Favoured Nation (MFN) Clauses: Obligating sellers not to offer better prices or conditions on competing platforms or other sales channels.
3. Exclusivity: Imposing an obligation on sellers or service providers not to deal with competing platforms.
4. Discrimination: Applying different commissions or conditions to sellers in similar commercial positions.
5. Self-Preferencing: Granting preferential treatment to the platform’s own products or services.
6. Product Bundling: Forcing sellers to purchase additional, unrelated products or services.
7. Unfair Terms: Imposing unfair or commercially unjustified contractual conditions.

Dominant Position and Abuse of Market Power

Where a platform is found to hold a dominant position, the Guideline subjects its conduct to heightened scrutiny. Dominance is assessed by reference to a range of criteria, including the platform’s market share compared to competitors, its order volume and capacity, financial solvency, vertical integration, efficiency of its delivery service, and the existence of barriers to market entry. The negotiation power of those dealing with the platform is also a key consideration.

A dominant platform is prohibited from abusing its position in a way that restricts or prevents competition. The Guideline highlights several practices as potential abuses, such as:

1. Predatory Pricing: Selling a service or product below its marginal or average variable cost to exclude competitors.
2. Exclusionary Conduct: Acting to restrict market entry or exclude competitors.
3. Discrimination: Applying dissimilar conditions to equivalent transactions with other trading parties.
4. Refusal to Deal: Refusing to deal with a specific customer according to usual commercial terms without a legitimate reason.
5. Tying: Making the conclusion of a contract conditional on accepting obligations unrelated to the original transaction.

Legal Nature of the Guideline

From a legal standpoint, it is important to note that the Guideline does not constitute binding legislation in itself. Rather, it serves as an interpretive and regulatory reference reflecting the CPA’s approach to enforcing the Competition Protection Law. Nevertheless, failure to align business practices with the Guideline may be treated as an indicator of potential non-compliance during inspections or investigations conducted by the CPA.

Conclusion

The CPA’s Guideline for the consumer delivery services sector provides important regulatory clarity on the application of Kuwait’s competition law to digital delivery platforms. While it does not create new legal obligations, it offers practical guidance on how competition rules are expected to be applied and enforced in this rapidly evolving market.

Platforms, sellers, and service providers operating in this sector are therefore encouraged to review their commercial arrangements and business practices to ensure their alignment with the Guideline, thereby reducing regulatory risk and supporting a competitive and transparent market environment.

Authors: Asad Ahmad, Partner and Head of Anti Trust & Competition and Ahmad Al Buaijan, Trainee Lawyer