Article 20 of the Saudi Communications and Information Technology Law
المادة 20 من نظام الاتصالات وتقنية المعلومات · الفصل السادس: المنافسة
The article requires the Board's approval before a service provider merges or anyone buys 5% or more of its shares or enough to reach control, and requires notifying the Authority within 5 working days of any preliminary merger agreement.
Official text (Arabic)
This article has not been amended since the law was issued.
1- دون إخلال بما تقضي به الأنظمة الأخرى، على مقدم الخدمة الحصول على موافقة المجلس قبل القيام بأي عملية اندماج مع مقدم خدمة آخر في الداخل أو الخارج، وإبلاغ الهيئة خلال (خمسة) أيام عمل عن أي اتفاق مبدئي يتم التوصل إليه في هذا الشأن.
2- على مقدم الخدمة أو أي شخص طبيعي أو معنوي الحصول على موافقة المجلس قبل القيام بشراء ما نسبته (5%) أو أكثر من أسهم أو حصص مقدم خدمة مرخص له بالعمل في المملكة أو بما يؤدي للوصول لمستوى مقدم الخدمة المسيطر على سوق اتصالات ذي صلة أو جزء منه.
3- على الهيئة -خلال مدة تحددها اللائحة- البت في أي طلبات تردها وفقًا لما ورد في الفقرتين (1) و(2) من هذه المادة.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 20 explained in plain English
This article monitors major changes in market structure so that they do not weaken competition.
1- Mergers:
- A service provider must obtain the Board's approval before any merger with another service provider, inside or outside the Kingdom.
- It must also notify the Authority within 5 working days of any preliminary agreement reached on the merger.
2- Buying shares or stakes: A service provider or any person, natural or legal, must obtain the Board's approval before buying:
- a percentage of 5% or more of the shares or stakes of a service provider licensed to operate in the Kingdom, or
- an amount that leads to reaching the level of a service provider dominant in a relevant communications market or part of it.
3- Decision period: The Authority must decide on these requests within a period set by the Implementing Regulations; the text does not state its length.
The merger provision applies without prejudice to what other laws provide, so approvals from other bodies may also be required. The second provision is not limited to companies but also covers individual investors. Article 21 follows to prevent a dominant provider from abusing its position. Anyone planning an investment or merger should consult a lawyer specializing in corporate and communications law.
Practical example
An investor in Riyadh wanted to buy 6% of the shares of a licensed telecom company. Because the percentage is 5% or more, he must obtain the approval of the Authority's board before buying.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 20 of the Saudi Communications and Information Technology Law
Does buying shares in a telecom company require approval?
Yes. Buying 5% or more of the shares or stakes of a licensed service provider, or an amount that reaches the level of a dominant provider, requires the Board's approval before the purchase.
When must the Authority be notified of a merger?
The service provider must notify the Authority within 5 working days of any preliminary agreement reached on the merger.
Does the provision cover a merger with a foreign company?
Yes. The article requires the Board's approval before any merger with another service provider, inside or outside the Kingdom.
How long does the Authority take to respond to an acquisition request?
The Implementing Regulations set the period within which the Authority decides on these requests.
More articles on Competition and Mergers in Telecommunications
- Article 7
A service provider must obtain the Authority's approval before a material change in ownership or assignment of its license, and the Authority's non-objection to a material change in senior management, with 90 days for the Authority to decide.
1- دون إخلال بما تقضي به الأنظمة الأخرى، على مقدم الخدمة الحصول على الآتي: أ- موافقة الهيئة قبل اتخاذ أي من الإجراءين الآتيين: (1) تغيير جوهري في ملكية المرخص ل
- Article 15
The article requires all service providers to meet reasonable interconnection or access requests, imposes stricter duties on a dominant provider covering 40% of the market, and gives the Authority binding power to resolve disputes.
1- يلتزم جميع مقدمي الخدمة بتلبية الطلبات المعقولة لربط الاتصال البيني أو النفاذ التي يتقدم بها مقدمو خدمة آخرون، وذلك وفقاً للأحكام التي تحددها اللائحة. 2- يلت
- Article 21
The article prohibits a dominant provider in a relevant communications market, or part of it, from any activity or measure that abuses its position, and refers the details to the Implementing Regulations.
لا يجوز لأي مقدم خدمة مسيطر على سوق اتصالات ذي صلة أو جزء منه القيام بنشاط أو إجراء يمثل استغلالا لوضعه. وتوضح اللائحة التزامات مقدم الخدمة المسيطر والقواعد الت
- Article 22
The article prohibits service providers from agreeing on practices that make one of them dominant or that limit, prevent or reduce the effectiveness of competition, and makes the provisions of such agreements and decisions void.
يُحظر على مقدمي الخدمة الاتفاق بينهم لإجراء ممارسات من شأنها جعل مقدم خدمة مسيطراً على سوق اتصالات ذي صلة أو جزء منه، أو الحدُّ من المنافسة أو منعها أو التقليل
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.