Article 8 of the Saudi Competition Law
المادة 8 من نظام المنافسة
The article allows the Board, on a technical committee's recommendation, to exempt an establishment from Articles 5, 6 and 7 if this improves the performance of the market or establishments and gives consumers a benefit that outweighs the restriction of competition.
Official text (Arabic)
This article has not been amended since the law was issued.
يجوز للمجلس -بناء على توصية من لجنة فنية يشكلها لهذا الغرض- الموافقة على طلب المنشأة إعفاءها من أي حكم من أحكام المواد (الخامسة) و(السادسة) و(السابعة) من النظام، إن كان من شأن ذلك أن يؤدي إلى تحسن أداء السوق، أو تحسين أداء المنشآت من حيث جودة المنتج أو التطور التقني أو الكفاية الإبداعية أو بهما معاً، على أن يحقق ذلك فائدة للمستهلك تفوق آثار الحد من حرية المنافسة، وذلك وفقاً للشروط والضوابط التي تحددها اللائحة.
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 8 explained in plain English
This article opens a door to exemption from the strictest provisions of the Law, which are:
- Article 5: the prohibition of practices and agreements among establishments that undermine competition.
- Article 6: the prohibition of abuse of a dominant position.
- Article 7: the duty to notify the Authority at least 90 days before completing an economic concentration when sales exceed the threshold set in the Regulations.
How is the exemption granted?
- The establishment submits a request for exemption from any provision of these articles.
- The Board forms a technical committee for this purpose, which gives its recommendation.
- The Board may approve if the conditions are met.
Conditions for the exemption:
- That it leads to an improvement in market performance, or an improvement in the performance of establishments in terms of product quality, technical development or innovative efficiency, or both.
- That it achieves a benefit to the consumer that outweighs the effects of limiting freedom of competition.
- That it is in accordance with the conditions and controls determined by the Regulations.
Approval is at the Board's discretion ("may"), so meeting the conditions does not mean the exemption is granted automatically. The details of submitting the request and its documents are determined by the Regulations. An establishment considering this route may consult a lawyer specialized in competition and commercial cases.
Practical example
Several small factories in Qassim want to agree to share research and development facilities and coordinate the production of a new type of product, and they believe this will raise quality and lower prices for consumers. They can submit a request for exemption from the provision of Article 5; the request is presented to a technical committee, and the Board may approve it if it is shown that the consumer's benefit outweighs the effect of limiting competition, according to the controls in the Regulations.
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 8 of the Saudi Competition Law
Can a company be exempted from the prohibition of agreements in the Competition Law?
Yes. The Board may, based on the recommendation of a technical committee, exempt an establishment from any provision of Articles 5, 6 and 7 if the conditions in the article are met and according to the controls in the Regulations.
What is the main condition for exemption?
That it leads to an improvement in market performance or in the performance of establishments in terms of quality, technical development or innovative efficiency, and achieves a benefit to the consumer that outweighs the effects of limiting freedom of competition.
Is exemption an automatic right for the establishment?
No. The text makes approval discretionary for the Board, based on the establishment's request and a technical committee's recommendation.
Articles this article refers to
- Article 5
The article prohibits practices and agreements among establishments that aim at or result in undermining competition, such as price fixing, market division and bid rigging.
تحظر الممارسات -ومنها الاتفاقيات أو العقود بين المنشآت، سواء أكانت مكتوبة أم شفهية، وصريحة كانت أم ضمنية- إن كان الهدف منها أو الأثر المترتب عليهـــا؛ الإخــــل
- Article 6
The article prohibits a dominant establishment from abusing its position to undermine competition, such as selling below cost, imposing resale prices, discriminating and refusing to deal.
يحظر على المنــشــأة أو المنشآت التي تتمتع بوضع مهيمن في السوق أو جزء مهم منه؛ إساءة استغلال هذا الوضع للإخلال بالمنافسة أو الحد منها، ومن ذلك ما يأتي: 1- بيع ا
- Article 7
The article requires establishments wishing to carry out an economic concentration to notify the Authority at least 90 days before completing it if their annual sales exceed an amount set by the Regulations.
يجب على المنشآت الراغبة في المشاركة في عملية التركز الاقتصادي إبلاغ الهيئة قبل (تسعين) يوماً على الأقل من إتمامها إن تجاوز إجمالي قيمة المبيعات السنوية للمنشآت
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.