Saudi Competition Law Violations: GAC Complaint and Committee

You run a home appliances store in Jeddah. Your exclusive distributor sends a "mandatory" retail price list and threatens to stop supplying you if you sell one riyal cheaper. In another deal, your company bid in a supply tender and later learned that three competitors had shared the bids among themselves. Is this an ordinary commercial dispute, or a violation with its own authority?

The direct answer: these practices may be prohibited by the Competition Law (Royal Decree M/75 of 1440H, Articles 5 and 6). Complaints go to the General Authority for Competition (GAC). Anyone may file, even if not harmed, and without revealing their identity (Article 32 of the Implementing Regulation). Penalties are imposed by the Committee for Adjudication of Competition Law Violations (Article 18), and the violator can challenge its decision before the competent court within 30 days of notification. Your own compensation is claimed before the competent court (Article 25), not before the committee.

Which practices violate the Saudi Competition Law?

The law prohibits practices, including agreements or contracts between businesses, written or oral, express or implied, whose purpose or effect is to harm competition (Article 5), in particular:

• Fixing or proposing prices and terms of sale or purchase.
• Sharing markets by region, customer type or season.
• Collusion or coordination in bids, government tenders or other tenders.
• Withholding goods from a specific business, or any conduct that blocks a business from entering the market or pushes it out.

A business with a dominant position must not abuse it (Article 6), for example by selling below cost to push competitors out, fixing or imposing resale prices or terms, discriminating between businesses in similar contracts, refusing to deal without an objective reason, or tying a product to another unrelated product. Article 7 requires businesses to notify the GAC at least 90 days before an economic concentration, such as an acquisition or merger, when their annual sales exceed the amount set by the Regulation.

Prices are, in principle, free under market rules, except prices set by a Council of Ministers decision or by law (Article 4). A high price alone is not a violation; the violation lies in the agreement or in abusing dominance.

Who has jurisdiction? The GAC investigates, the committee decides

The GAC Board decides for each complaint whether to start inquiry and investigation or to close it with reasons (Article 14). Designated GAC staff have judicial police powers: they may enter business premises, inspect books, investigate and prosecute (Article 15).

A public prosecutor authorised by the GAC then files a statement of claim with the committee (Regulation Article 74). The committee has five members, at least three of them legal specialists, and its chair is one of them (Article 18). It decides cases arising from the law and Regulation, except violations of Article 12(1) and Article 24 (Regulation Article 70). The business is notified of the first hearing at least 15 days in advance, hearings are public unless the committee decides otherwise, and all means of evidence are allowed, including email and phone recordings (Regulation Articles 75, 76 and 80).

This jurisdiction rests on Article 18 of the law, which is in force in its published text. In the telecom sector, anti-competitive practices are also a violation under the Telecommunications and Information Technology Law before its own committee; the GAC is the authority of original jurisdiction where its powers overlap with other bodies (Article 3 of the Competition Law).

What are the penalties?

The decision is published at the violator's cost once final (Article 19(4)). After the committee's decision, the Board may order the violator to dispose of assets or shares, impose a daily fine of up to SAR 10,000 until the violation ends, or close the business for up to 30 days if the violation continues 90 days after notice (Article 21).

How do you file a complaint, and what do you attach?

1. Describe the practice precisely: who is involved, which product or service, when it started and how you learned of it.
2. File with the GAC on its designated complaint form (Regulation Article 32); you may stay anonymous.
3. Attach supporting evidence: imposed price lists, messages and emails, invoices showing price discrimination, tender documents and suspiciously close bids.
4. Answer any information request from the GAC; businesses must provide what is requested (Regulation Article 32(3)).

After a preliminary review the complaint goes to the Board with a recommendation, and the GAC may prioritise complaints with serious harm or greater effect on competition (Regulation Article 33).

How do you challenge a committee decision?

The deadline is 30 days from the date the violator is notified, before the competent court, which in practice is the Administrative Court of the Board of Grievances (Article 18(3)). If no grievance is filed in that time, the decision becomes final (Regulation Article 84). Whoever files a grievance must inform the GAC within three working days, by a letter giving the committee decision number and date and the court filing number, date and a copy (Regulation Article 85).

Two warnings. Fines are enforceable immediately from notification unless the court orders a stay, and even a judgment annulling them does not stop enforcement until it becomes final (Regulation Article 86). And if the court annuls the committee's decision, the court itself examines the violation and imposes the appropriate penalty (Article 18(3)), so annulment does not necessarily mean acquittal.

Does the committee award compensation? Where do you claim it?

The committee penalises; it does not compensate. Anyone harmed by a prohibited practice may claim compensation before the competent court (Article 25). Where the dispute is between two merchants over their commercial business, the Commercial Court has jurisdiction (Article 16 of the Commercial Courts Law).

The Board may accept a settlement with the violator, or decide not to refer a business that comes forward with evidence exposing its partners (Article 23). Compensation within a settlement is limited to those who filed a specific complaint against that business before the settlement was accepted (Regulation Article 64), which is a practical reason to complain early. A settlement does not stop others from suing in court, and the court may ask for the GAC's opinion on the effects of the practice (Regulation Article 65).

A distributor with eleven branches refused to apply a resale price imposed by a supplier that controls a large share of the market for one product line. The supplier stopped supplying him, and he lost sales worth about SAR 600,000 in four months.

He filed a complaint with the GAC with the supplier's messages and price list. If abuse of dominance is proven, the fine can reach 10% of the supplier's annual sales of the product concerned.

The SAR 600,000 does not come from the committee. He files a compensation claim before the Commercial Court and relies on the committee decision once it is final.

Practical solutions for both sides

If you are a harmed trader or a whistleblower:

• Keep every message, imposed price list or threat to stop supply, with its date.
• Complain early; compensation in settlements is limited to those who complained before them.
• Keep two tracks apart: penalising the violator through the GAC, and your compensation in court.
• Quantify your loss with documented figures from your accounts before filing a damages claim.

If your business is under investigation or a decision was issued against it:

• Review distribution and agency contracts for resale price, exclusivity and territory clauses.
• Cooperate with information requests; obstruction or concealment is a separate violation with fines up to 5%.
• Consider a settlement request or disclosure of partners before referral to the committee (Article 23).
• If a decision is issued, count 30 days from notification and inform the GAC of your grievance within three working days.
• Ask the court to stay the fine if paying now would cause harm that is hard to undo.

If you have supplier messages or a committee decision, send them to us on WhatsApp and we will look with you at whether the practice falls under the law and how much time you have left.

This is general information based on the official Arabic texts of Saudi laws, which prevail over any translation. It is not legal advice for your specific case.