The Kuwait Competition Protection Agency (CPA) Fines Steel Distribution Company 250,000 Kuwaiti Dinars
The Kuwait Competition Protection Agency (“CPA”) officially handed down its first sanction since being granted substantially sharper teeth under the new competition law no. 72 of 2020 (“CPA Law”). On 7 November 2022, the CPA penalized a local steel distribution company (“Company”) for procedurally violating the CPA Law. The Company was referred to the CPA’s disciplinary board after conducting an initial investigation to verify whether any competition violations occurred during the production and distribution stages of the Company operations. Specifically, there were concerns surrounding the prices of Kuwaiti rebar and the cessation of distribution companies from selling steel in the Kuwaiti market during the period preceding March 2022.
The CPA’s disciplinary board sanctioned the Company for violating article (34) paragraph (5) of the CPA Law. This article stipulates that the CPA disciplinary board may impose a financial penalty of no more than 1% of the total revenues earned by the relevant person during the previous fiscal year, in the event the relevant party refrains from implementing (including complying with requests for information) any obligation imposed by the CPA to enforce the provisions of the CPA Law, for one month following the date of official notification to the relevant party.
The CPA disciplinary board evidently imposed this sanction due to the Company’s non-compliance with the CPA’s requests and refrainment from providing the requested data and information for a duration exceeding 1 month. As a result, the CPA penalized the Company with a fine valued at KD 250,000 (USD 806,000), which is equivalent to 1% of the Company’s total revenues achieved during the fiscal year 2020/2021.
Notable in this situation is that CPA has imposed the maximum penalty on the Company, which was the full 1% of the total revenues of the previous year. The CPA intends to send a loud and clear message to deter other businesses from committing any violations of the CPA Law or committing any practices that would harm competition in the Kuwait markets. More importantly, the CPA will surely continue collecting information, researching, and investigating any allegations to detect any violations of the CPA Law and set defined standards for competition practices in Kuwait.
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