January 23rd, 2024 Legal Updates

Egyptian Competition Authority Takes Stand Against Collusion and Monopolistic Practice

In the implementation of its 2021-2025 strategy, the Egyptian Competition Authority (“ECA”) has made an extremely impactful  decision, confirming collusion in the petroleum product distribution market. Two companies, owned by a state entity, have been found to be in violation of the Egyptian Competition Protection Law through the  misuse of their dominant market position.

The ECA investigation revealed that these two companies hold a dominant position in the Egyptian market for distributing Bitumen 60/70, a crucial material used in road construction. Being fully owned by a state entity, they are considered affiliated parties. The misuse of their dominant position  was evidenced by linking Bitumen 60/70 sales to the purchase of emulsions and bituminous solutions, violating Article 8(d) of the Competition Protection Law, which states that those who are in a dominant position in a relevant market are prohibited from suspending the conclusion of a contract or a specific agreement for a product on the condition of accepting commitments or products that are inherently or commercially unrelated to the subject of the original agreement.

The ECA re-emphasizes its commitment to combating all forms of monopolistic practices across various sectors and markets. One such practice is the misuse of a dominant position, as observed in the forced bundling of products, compelling customers to accept additional items or commitments to exploit their position. Such practices are detrimental to fair competition and the development of a healthy economic markets.

In short, the ECA is actively fighting against unfair practices in different industries. Their work is crucial in creating a fair playing field for the benefit of both businesses and consumers. Parties should heed the ECA actions taken as a warning, showing their willingness to have serious consequences for those who try to disrupt fair competition in the market.

Authors: Asad Ahmad, Senior Associate and Salma Farouq, Associate.

For more information For further information, please contact Alex Saleh (alex.saleh@glaco.com) and Asad Ahmad (asad.ahmad@glaco.com)

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