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Saudi Competition Authority Approves 116 Applications for Acquisition

Saudi Competition Authority Approves 116 Applications for Acquisition
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Saudi Competition Authority Approves 116 Applications for Acquisition

Saudi Competition Authority Approves 116 Applications for Acquisition

The Saudi General Authority for Competition (GAC) has initiated criminal proceedings against 24 establishments, processed 299 complaints, and approved investigations into 16 of them after detailed evaluation. The authority dismissed 252 complaints, while 31 cases remain under review.

Since the beginning of 2024, 16 establishments have submitted settlement requests to the authority. Additionally, GAC approved 147 economic concentration (mergers and acquisitions) requests during the first three quarters of the year, classified 74 as non-reportable, and is still reviewing 12 applications.

In an interview with Asharq Al-Awsat, Saad Al-Masoud, the GAC spokesperson, highlighted that settlement is a vital mechanism for ensuring sustainability by correcting violations of the Competition Law and its executive regulations. Such requests are accepted from establishments before criminal charges are initiated.

The Role of GAC

Al-Masoud explained that GAC oversees the implementation of the Competition Law, aimed at promoting fair competition, combating monopolistic practices, ensuring a wide array of high-quality, competitively priced goods and services, and encouraging innovation. The authority’s three main functions include safeguarding fair competition, enforcing regulations and monitoring markets.

The authority also evaluates economic concentration reports (mergers, acquisitions, and joint ventures), issuing necessary decisions. Since January, it approved 147 economic concentration applications, 74 deemed non-reportable, while 12 remain under review.

Economic Concentration Insights

According to Al-Masoud, acquisition requests represented the majority of approved applications, totaling 116 (79%). Joint ventures accounted for 27 applications (18%), with three additional dealership registration requests in the automotive sector (2%), and one merger application (1%).

Exemptions

The authority offers programs, including exemptions under specific conditions outlined in the Competition Law. Companies can request exemptions from Articles 5, 6, and 7 of the law if their actions improve market performance, enhance quality, or provide consumer benefits outweighing restrictions on competition. However, the exemption must not allow the exclusion of competitors from the market for any product, Al-Masoud remarked.

Monitoring and Investigations

The authority identifies potential violations through complaints from individuals, referrals from government entities, or proactive market studies. It investigates and reports findings to its board, which decides on appropriate actions. In 2023, GAC received 141 complaints, dismissing 98 due to reasons such as lack of jurisdiction, insufficient evidence, or no legal violation.

Settlements and Reconciliation Program

Settlement is a corrective mechanism offered to violating establishments before criminal proceedings. The GAC spokesperson said that in 2023, 36 settlement requests were submitted, while 16 were filed in 2024. GAC’s board approved their study, avoiding criminal prosecution for these entities.

The Reconciliation Program, another key tool, allows establishments to disclose anti-competitive agreements and receive immunity from penalties. Al-Masoud revealed that three establishments were granted immunity in 2023 and 2024.

Spreading Competition Awareness

The authority actively promotes fair competition by raising awareness and enhancing specialized knowledge. In 2024 alone, GAC organized 9 workshops with chambers of commerce across cities, 7 university engagements for educational outreach, 25 workshops with national committees, meetings with over 113 entrepreneurs and businesspeople.

Additionally, GAC participated in major exhibitions and conferences, speaking at four of them, to engage its target audience more effectively.

Enhancing Competition

GAC conducts sectoral studies to evaluate market structures and identify anti-competitive practices. These studies benchmark Saudi markets against international standards and best practices, using economic and legal analyses to address competition-related issues.

Al-Masoud said that in recent years, GAC has completed market studies to assess competition levels in Saudi Arabia, deriving lessons and recommendations aimed at fostering effective competition. These recommendations focus on implementing improvements to reduce the likelihood of anti-competitive behavior.

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Venezuela Depreciation Risks Reversing Years of Inflation Gains

People walk through a market in the low-income Petare neighborhood, in Caracas, Venezuela November 16, 2024. (Reuters)
People walk through a market in the low-income Petare neighborhood, in Caracas, Venezuela November 16, 2024. (Reuters)
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Venezuela Depreciation Risks Reversing Years of Inflation Gains

People walk through a market in the low-income Petare neighborhood, in Caracas, Venezuela November 16, 2024. (Reuters)
People walk through a market in the low-income Petare neighborhood, in Caracas, Venezuela November 16, 2024. (Reuters)

Currency depreciation is set to reverse years of declining inflation in economically beleaguered Venezuela, public and private sector sources say, as foreign currency sales fall short of demand and the socialist government keeps tight-lipped about its strategy.

After years of hyperinflation and amid broad US sanctions, in 2022 the administration of President Nicolas Maduro began using orthodox policies including credit restrictions, lower public spending, a fixed dollar-bolivar rate and central bank sales of billions of dollars in foreign currency to tamp down consumer prices.

Maduro, who will begin his third term in January after a disputed election that the opposition and international observers say he lost, has said his government defeated inflation of more than 100,000% and prices in 2024 are similar to those in 2014.

But the administration's policy has now changed.

After more than nine months of the exchange rate being held at 36.5 bolivars to the dollar, the government in mid-October allowed the currency to float, beginning a depreciation that has seen the bolivar slide to about 45 versus the dollar, according to central bank figures.

Analysts say the over-valued currency made imports cheaper than locally-produced goods, impacting Venezuela's private sector and helping push prices up by 12% in nine months.

The untethering of the exchange rate will also put upward pressure on prices in the final quarter of 2024, financial and business sources said, with analysts predicting in a LatinFocus survey the rate will end the year at 50 bolivars to the dollar.

Year-on-year inflation was 25% through September. Official figures for October have not yet been released.

"For nine months the depreciation of the currency was zero while inflation was rising, which exposed problems in the exchange scheme," said economics professor and consultant Daniel Cadenas, who added the market depends on oil income. "For the system to function, there needs to be a growing source of exchange and that's not possible."

The government had predicted internally that inflation would close the year at 30%, two sources with knowledge of the projection said, but depreciation could increase the figure and local analysts have estimated inflation between 35% and 40%.

"There has been a necessary adjustment in the exchange rate that will have an impact on inflation," said Asdrubal Oliveros, head of local think tank Ecoanalitica. "The government has understood it needs to devaluate."

REDUCED CENTRAL BANK SALES

Vice President Delcy Rodriguez, who until recently also served as finance minister, told an event with business people last month that there must be "reflection" about the use of foreign exchange.

"We should all be concerned with how foreign exchange is used in imports. It is a subject the Finance Ministry is reviewing," she said. "We need to take care of foreign exchange because this is a blockaded country and there cannot be cheap exchange for hair dye."

Rodriguez's comments are the only ones made on the subject by the government since devaluation began. Neither the central bank nor the communications or finance ministries responded to requests for comment.

Private sector demand for cheap foreign exchange increased during the nine months the rate was held, even as the quantity of dollars being injected into the market by the central bank was reduced, sources said.

In July the bank was offering some $800 million, but by October that figure had fallen to $400 million, according to calculations by local consultancy Sintesis Financiera.

The central bank did not respond to a question about the reduction.

"The strategy in exchange policy is not going ahead," a government source said, without giving further details.

Food and medicine companies in Venezuela are allowed to pay for some of their goods with foreign currency, while other companies are given central bank promissory notes indexed to a specific exchange rate.

Two private sector sources said many businesses are eating through their inventories in the face of import difficulties.