Article 21 of the Saudi Competition Law
المادة 21 من نظام المنافسة
The article allows the Board to require a violator to remove the violation, and after the Committee's decision to require it to dispose of assets or shares, pay a daily fine up to SAR 10,000, or close temporarily for up to 30 days.
Official text (Arabic)
This article has not been amended since the law was issued.
مع عدم الإخلال بما تقضي به المادة (التاسعة عشرة) من النظام، يجوز للمجلس اتخاذ أحد التدابير الآتية أو بعضها إن تبين له إن هناك مخالفة لأحد أحكام النظام:
1- تكليف المخالف بتعديل أوضاعه وإزالة المخالفة خلال مدة محددة.
2- يجوز للمجلس -بعد صدور قرار اللجنة بإيقاع العقوبة- أن يتخذ واحداً أو أكثر من التدابير التالية:
أ- تكليف المخالف بالتصرف في بعض الأصول أو الأسهم أو حقوق الملكية، أو القيام بأي عمل آخر يكفل إزالة المخالفة.
ب- إلزام المخالف بدفع غرامـة يومية لا تتجاوز (عشرة آلاف) ريال إلى أن تزال المخالفة في المدة المحددة في قرار المجلس، وعند انتهاء هذه المدة دون إزالة المخالفة تُضاعف الغرامة المقررة إلى أن تزال.
ج- إغلاق المنشأة مؤقتاً لمدة لا تزيد على (ثلاثين) يوماً عند الاستمرار في المخالفة بعد انقضاء (تسعين) يوماً من إشعار المجلس المنشأة بإزالة المخالفة.
وتحدد اللائحة القواعد اللازمة لتطبيق هذه التدابير.
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 21 explained in plain English
In addition to the fines in Article 19 (and without prejudice to them), this article gives the Board measures to remove the violation if it finds that a provision of the Law has been violated. It may take one or some of them:
1. Requiring the violator to correct its position and remove the violation within a specified period.
2. After the Committee has issued its decision imposing the penalty, the Board may take one or more of the following measures:
- a- Requiring the violator to dispose of some assets, shares or ownership rights, or to do any other act that ensures the violation is removed.
- b- Imposing a daily fine on it not exceeding SAR 10,000 until the violation is removed within the period set in the Board's decision; if the period ends without the violation being removed, the fine is doubled until it is removed.
- c- Temporarily closing the establishment for a period not exceeding 30 days, when the violation continues after 90 days have passed since the Board notified the establishment to remove the violation.
Note that the measures in item 2 depend on the Committee first issuing its decision imposing the penalty, whereas item 1 does not require that. The Regulations set the necessary rules for applying these measures.
Article 22 provides for taking into account the circumstances, seriousness and effects of the violation when these measures are imposed. An establishment that has received an order to remove a violation would do well to consult a lawyer specialized in competition and commercial cases.
Practical example
After the Committee issued its decision punishing a company for abusing its dominant position, the Board required it to remove an exclusive dealing condition from its contracts within a specified period, with a daily fine. The company did not remove the condition within the period, so the daily fine was doubled, and the violation continued 90 days after the Board's notice, so it became permissible to close it temporarily for a period not exceeding 30 days.
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 21 of the Saudi Competition Law
Can an establishment be closed for violating the Competition Law?
After the Committee issues its decision imposing the penalty, the Board may close it temporarily for a period not exceeding 30 days if the violation continues 90 days after it was notified to remove it.
How much is the daily fine under the Competition Law?
It does not exceed SAR 10,000 per day until the violation is removed within the specified period, and it is doubled if the period ends without removing it.
Can a company be required to sell shares or assets?
Yes. After the Committee issues its decision imposing the penalty, the Board may require the violator to dispose of some assets, shares or ownership rights, or to do any other act that ensures the violation is removed.
Articles this article refers to
More articles on Measures to Remove the Violation
- Article 22
The article sets what is taken into account in imposing the penalties and measures of Articles 19, 20 and 21: the nature of the activity subject to the violation, its circumstances, seriousness and effects, in each case separately.
يراعى عند إيقاع العقوبات والتدابير الواردة في المواد (التاسعة عشرة)، و(العشرين)، و(الحادية والعشرين) من النظام، ما يأتي: 1- عند تعدد أنشطة المنشأة وتباين كل نشا
- Article 23
The article allows the Board not to refer a violating establishment to the Committee if it takes the initiative to provide evidence revealing its partners, and to accept a settlement with it, under the Regulations' controls and mechanisms to compensate those harmed.
يجوز للمجلس اتخاذ قرار بألا يحيل إلى اللجنة المنشأة المخالفة لأحكام هذا النظام، وذلك في حال بادرت تلك المنشأة بتقديم أدلة تكشف شركاءها في تلك المخالفة، وللمجلس
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.