Saudi Arabia’s competition framework applies with full force to digital markets, carrying significant implications for how businesses structure contracts, set prices, leverage data, and execute M&A transactions. The General Authority for Competition’s (GAC) June 2026 working paper, prepared for the OECD Competition Committee, illustrates how well-established competition concepts (prohibitions on anti-competitive agreements, abuse of dominance, and merger control) are being adapted to address the distinct characteristics of platforms, data-driven business models, and digital ecosystems.

Key Takeaways

• Full application to digital markets: The Competition Law explicitly covers electronic platforms and applications, whether or not licensed in the Kingdom, and has extraterritorial reach to conduct outside Saudi Arabia that affects domestic competition.
• Lower dominance thresholds: While the general threshold is 40% market share, GAC may find dominance at 25% or lower in network-effect markets such as food delivery platforms.
• Digital-specific concerns: MFN/price-parity clauses, exclusivity arrangements, self-preferencing, algorithmic coordination, and misuse of business-user data are all under regulatory scrutiny.
• M&A filing requirements: Notification is required 90 days before completion if combined turnover exceeds SAR 100 million. GAC can unwind completed transactions that were not properly notified.
• Leniency programs available: Firms that self-report violations may avoid prosecution, and compliance programs implemented before a violation can support reduced penalties.
• Substantial penalties: Fines of up to 10% of annual sales (or three times gains), with recidivism doubling the penalty and separate fines for obstruction.

The Applicable Framework

The principal binding instruments are the Competition Law, issued by Royal Decree No. M/75 dated 29/6/1440H (March 2019), and its Implementing Regulations, issued by GAC Board Resolution No. 337 dated 25/1/1441H (September 2019). The framework applies across all sectors and extends to electronic platforms and applications-whether or not licensed to operate in the Kingdom. Critically, the law has extraterritorial reach: practices occurring outside Saudi Arabia that have a non-competitive effect within the Kingdom fall within GAC’s jurisdiction.

Article 5 prohibits horizontal and vertical agreements whose object or effect is to restrict competition. Explicit violations include price-fixing, market allocation, limiting production or supply, bid-rigging in government and non-government tenders, and coordinated refusals to deal. In digital contexts, this captures platform-imposed exclusivity arrangements, pricing algorithms that facilitate tacit coordination, information-sharing between competitors through shared platform infrastructure, and most-favored-nation (MFN) clauses that restrict sellers’ pricing freedom across channels.

Article 6 prohibits the abuse of a dominant position in ways that prejudice or restrict competition. Relevant examples include: (i) predatory pricing-selling below total cost to exclude competitors or deter entry; (ii) imposing resale prices or conditions; (iii) unjustified discrimination between similarly situated businesses; (iv) refusals to deal without objective justification that restrict market entry; (v) tying and bundling-making a sale conditional upon accepting unrelated products or obligations; and (vi) requiring exclusivity as a condition of dealing. Article 8 provides an exemption mechanism where the Board may approve conduct that improves market performance, quality, or technological development, provided the consumer benefit outweighs the restriction on competition. Such exemptions require affirmative approval and are not automatic.

Penalties are substantial. Violations of Articles 5, 6, 7, or 11 may result in fines of up to 10% of the annual sales associated with the violation, or up to SAR 10 million where those sales cannot be determined. Alternatively, the Committee may impose a fine of up to three times the gains earned through the violation. Recidivism-repeating the same violation within three years-allows the Committee to double the penalty. Obstruction of investigations or provision of misleading information attracts a separate fine of up to 5% of annual sales or SAR 5 million. Violations are published at the violator’s expense once decisions become final.

Market Power in Digital Markets

Under Article 10 of the Implementing Regulations, dominance may be established where: (a) a firm holds a market share of 40% or more of the relevant market; or (b) a firm is able to affect prices, production, or supply in the relevant market regardless of market share. When assessing dominance below the 40% threshold, GAC may consider factors including: the market shares of competitors; barriers to entry; the level of actual or potential competition; supply and demand dynamics; negotiating power of customers; access to production inputs; financial resources; economies of scale; and product differentiation.

Market share, however, tells only part of the story in digital markets. Data advantages, network effects, switching costs, control over access to users, and algorithmic capabilities can reinforce and entrench a platform’s market power even at lower market shares. GAC’s non-binding Guidelines to Enhance Competition in the Food Delivery Platform Sector recognize this reality. Depending on the relevant market circumstances, a food-delivery platform may be considered dominant at a market share as low as 25%-or potentially lower where other factors support that conclusion. This is not an automatic threshold and does not replace the general regulatory dominance test, but it signals GAC’s willingness to intervene earlier in markets exhibiting strong network effects.

The Guidelines identify several practices that may raise concerns when adopted by a dominant platform: (i) price-parity or most-favored-nation clauses that restrict sellers’ pricing across channels; (ii) exclusivity arrangements that foreclose rivals’ access to restaurants or drivers; (iii) unjustified discrimination in fees, ranking, or terms; (iv) self-preferencing by vertically integrated platforms (e.g., favoring in-house delivery over third-party options); and (v) certain uses of business-user data to disadvantage rivals-for instance, using restaurant transaction data to launch competing cloud kitchens or private-label offerings. Each of these practices carries both competition and consumer dimensions.

Data as a Competitive Asset and Barrier to Entry

Data plays a dual role in digital markets: as an input that improves service quality and as a potential barrier to entry that entrenches incumbents. GAC’s Guidelines highlight several data-related concerns: (i) using transaction data from business users to develop competing offerings (e.g., cloud kitchens or private labels); (ii) ranking algorithms that reduce the visibility of competing services; (iii) data-driven network effects that reinforce market power over time; (iv) data-based price discrimination or commission differentiation; and (v) leveraging data advantages across adjacent markets.

Where data-related conduct engages both competition and consumer protection frameworks, GAC coordinates with the Ministry of Commerce (consumer protection and anti-fraud) and the Saudi Data and AI Authority (SDAIA) on data privacy. GAC’s view is that foreclosure and damage to market structure fall within competition policy, while exploitation of information asymmetry falls within consumer protection. The coordinated, multi-agency model, supported by the National Regulatory Committee and the E-Commerce Council, ensures that digital markets receive coherent regulatory oversight across these intersecting mandates.

Digital M&A and the Uber/Careem Example

Article 7 requires qualifying economic concentrations to be notified to GAC at least 90 days before completion. Under Article 12(1) of the Implementing Regulations, notification is required where the combined annual turnover of all parties exceeds SAR 100 million. Additional criteria apply depending on the transaction type: for acquisitions, the target’s Saudi sales, the parties’ combined Saudi sales, and the target’s contribution to those domestic sales are all relevant considerations.

GAC must decide on a concentration within 90 days of accepting a complete notification. Decisions take three forms: unconditional approval, conditional approval, or rejection. Conditional approval and rejection must be substantiated. If GAC does not notify the applicant within 90 days, the concentration is deemed approved. Critically, failure to notify does not shield the parties: GAC retains the right to examine and evaluate an economic concentration whether before or after completion, and may require parties to unwind a completed transaction if it was not properly notified.

GAC’s review of Uber’s acquisition of Careem demonstrates why digital transactions require more than traditional market-share analysis. Defining the relevant market narrowly as ride-hailing platform services, GAC found the merged entity’s position approached near-monopoly. Central to GAC’s analysis was the role of big data and indirect network effects: a larger user base yields richer data, which improves service quality and attracts more users in a self-reinforcing loop. A new entrant cannot readily replicate this data advantage. The two-sided nature of the market-drivers prefer platforms with many riders and vice versa-meant the merger risked tipping the market decisively, raising switching costs and enabling data-driven pricing that could harm consumers.

Rather than require divestiture, GAC cleared the transaction subject to behavioral conditions: maintaining brand separation between Uber and Careem, pricing constraints to prevent post-merger price increases, and obligations to preserve drivers’ ability to move between platforms. The case illustrates the dual purpose GAC seeks in digital remedies: constraining the exercise of market power while directly safeguarding consumers and keeping the market open to future entry.

Regional Context: The GCC Digital Markets Landscape

Saudi Arabia’s competition framework does not exist in isolation. Businesses operating digital platforms across the GCC face a patchwork of competition regimes at varying stages of maturity. The UAE’s Federal Competition Law and its recent amendments, Qatar’s Competition Protection and Anti-Monopoly Law, Bahrain’s Competition Law, and similar frameworks in Kuwait and Oman each impose distinct filing thresholds, review timelines, and substantive standards. A regional digital business may need to navigate multiple parallel filings with different information requirements and clearance periods.

What distinguishes Saudi Arabia’s approach is: (i) the explicit application of competition rules to electronic platforms and applications, whether or not locally licensed; (ii) the extraterritorial reach of the law to conduct outside the Kingdom that affects domestic competition; (iii) the willingness to apply lower dominance thresholds in network-effect markets; and (iv) the coordinated multi-agency model that integrates competition, consumer protection, and data privacy oversight. For businesses headquartered in other GCC states or operating cross-border platforms, Saudi Arabia’s framework represents one of the more developed and actively enforced competition regimes in the region.

Leniency, Settlement, and Compliance Incentives

The Implementing Regulations establish two mechanisms for businesses to resolve competition violations cooperatively: Reconciliation and Settlement. Under the Reconciliation program, a firm that proactively provides evidence revealing co-violators may avoid criminal proceedings before the Committee. Under Settlement, a firm found to be in violation may negotiate a resolution that includes payment of a determined amount and compensation to aggrieved parties. Both requests must be submitted before GAC initiates formal criminal proceedings. The Board has 120 days to decide; if no decision is communicated, the request is deemed rejected.

Importantly, the Committee and Board may consider extenuating circumstances when imposing penalties, including preventive measures and compliance procedures the firm had implemented before the violation occurred. A firm may demonstrate that it exercised due care before the violation, which may support a reduced penalty. This creates a concrete incentive for digital businesses to establish robust competition compliance programs, not merely as box-ticking exercises, but as genuine mitigation in the event a violation is later identified.

Looking Ahead: AI, Algorithms, and Platform Ecosystems

GAC expects the competition-consumer interface to deepen as platform ecosystems and AI-driven interfaces develop. Algorithmic pricing systems may facilitate tacit coordination even without explicit agreements between competitors, posing a challenge to the traditional requirement of proving a “meeting of minds.” AI-powered recommendation engines can entrench incumbents by steering consumers toward established providers. Data moats created through machine-learning models may create barriers to entry that are more durable than those arising from traditional scale economies.

GAC has positioned data and digital platform conduct as a dedicated study area and continues to invest in the analytical capabilities needed to assess these markets. Businesses developing AI-powered products and services should consider not only whether their algorithms comply with existing competition rules, but also how those algorithms may interact with competitors’ systems in ways that produce coordinated outcomes. The existing legal framework, particularly the prohibition on practices whose “purpose or effect” is detrimental to competition, provides a basis for enforcement even where traditional concepts of agreement may not easily apply.

Practical Implications

Digital businesses should embed competition review into commercial decision-making from the outset. Key steps include: (i) assessing market position against both the 40% general threshold and the lower thresholds applicable in network-effect markets; (ii) reviewing contractual terms-particularly exclusivity, MFN, and pricing clauses-against the Article 5 prohibitions; (iii) examining data practices for potential self-preferencing or leveraging concerns; (iv) identifying merger-control filing requirements early and building adequate conditionality into deal timelines; and (v) understanding the leniency and settlement programs available for firms that self-report violations.

The Competition Law and Implementing Regulations establish the binding obligations. GAC’s non-binding guidance-including the Food Delivery Guidelines and its published approach to digital markets-helps businesses understand how those obligations will be analyzed in practice. Early assessment enables businesses to pursue digital growth strategies while managing competition risk effectively.

Authors: Asad Ahmad, Partner and Head of Antitrust & Competition, Shahd Alhumaidani, Associate, and Norah Al Abdullatif, Trainee Lawyer.