Article 2 of the Saudi Competition Law
المادة 2 من نظام المنافسة
The article explains that the Competition Law aims to protect and encourage fair competition and combat monopolistic practices, in order to improve the market environment and develop the economy.
Official text (Arabic)
This article has not been amended since the law was issued.
يهدف النظام إلى حماية المنافسة الــعادلة وتشجيعها، ومكافحة ومنع الممارسات الاحتكارية التي تؤثر على المنافسة المشروعة أو على مصلحة المستهلك؛ بما يؤدي إلى تحسين بيئة السوق وتنمية الاقتصاد.
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 2 explained in plain English
This article states the purpose for which the Competition Law was made, which is:
- Protecting and encouraging fair competition among the establishments operating in the market.
- Combating and preventing monopolistic practices where they affect legitimate competition or the interest of the consumer.
- The intended result: improving the market environment and developing the economy.
This article does not create an obligation or penalty by itself, but it helps in understanding and interpreting the other articles of the Law; the prohibitions and procedures in the Law are read in light of this objective. Note that the text links protection to two things: legitimate competition among establishments, and the interest of the consumer.
It is connected to what Article 3 provides, that the provisions of the Law apply to all establishments inside the Kingdom and to practices that take place outside it if they have an effect that undermines fair competition inside the Kingdom, excluding public institutions and state-owned companies that are solely authorized by the government to provide goods or services in a particular field. The Law also relies on the definitions in Article 1, including the definitions of "establishment" and "market."
If you have a business and want to know whether a particular practice might be considered monopolistic, it is advisable to consult a lawyer specialized in competition and commercial cases.
Practical example
A shop owner in Jeddah noticed that suppliers of a certain product had agreed among themselves to raise its prices. This article shows that the Law was made in the first place to confront practices like this that harm legitimate competition and the interest of the consumer; the details of the prohibition are set out in other articles of the Law.
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 2 of the Saudi Competition Law
What is the objective of the Competition Law in Saudi Arabia?
To protect and encourage fair competition, and to combat and prevent monopolistic practices that affect legitimate competition or the interest of the consumer, in order to improve the market environment and develop the economy.
Does the Competition Law protect the consumer?
Yes. The text expressly includes combating monopolistic practices that affect the interest of the consumer among the objectives of the Law.
More articles on General Provisions of the Competition Law
- Article 1
The article defines the key terms of the Competition Law, such as establishment, market, dominant position, economic concentration, the Authority and the Committee.
يقصد بالمصطلحات الآتية -أينما وردت في هذا النظام- المعاني المبينة أمام كل منها، ما لم يقتض السياق غير ذلك: النظام: نظام المنافسة. الهيئة: الهيئة العامة للمنافسة
- Article 3
The article sets the scope of the Competition Law as establishments inside the Kingdom and external practices affecting it, excludes exclusively authorized government bodies, and makes the Authority the primary competent body.
1- مع عدم الاخلال بما ورد في الأنظمة الأخرى, تطبق أحكام النظام على ما يأتي: أ- جميع المنشآت داخل المملكة. ب- الممارسات التي تقع خارج المملكة, ذات الأثر المخل با
- Article 4
The article provides that prices of goods and services are subject to market rules and free competition, except those priced by a Council of Ministers decision or under a law.
تكون أسعار السلع والخدمات وفقاً لقواعد السوق ومبادئ المنافسة الحرة، عدا أسعار السلع والخدمات التي تحدد بناءً على قرار من مجلس الوزراء، أو بموجب نظام.
- Article 26
The article provides that the current Competition Law replaces the previous Competition Law issued by Royal Decree No. M/25 dated 4/5/1425 AH.
يحل النظام محل نظام المنافسة، الصادر بالمرسوم الملكي رقم (م / 25) وتاريخ 4 / 5 / 1425هـ.
- Article 27
The article requires the Authority's Board to issue the Implementing Regulations of the Competition Law within 180 days of the Law's publication in the Official Gazette, to take effect from the date the Law takes effect.
يصدر المجلس اللائحة خلال (مائة وثمانين) يوماً من تاريخ نشر النظام في الجريدة الرسمية، ويعمل بها من تاريخ نفاذه.
- Article 28
The article provides that the Competition Law takes effect 180 days after the date of its publication in the Official Gazette.
يُعمَل بهذا النظام بعد (مائة وثمانين) يوماً من تاريخ نشره في الجريدة الرسمية.
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.