Law No. 3 of 2005 - Issuing the Law on Protection of Competition and Prevention of Monopolistic Practices

Decision to Issue the Law

Law No. 3 of 2005 Issuing the Law on Protection of Competition and Prevention of Monopolistic Practices

In the Name of the People The President of the Republic The People's Assembly has decided the following law, which we have issued:

(Article One) The provisions of the accompanying Law shall apply regarding the protection of competition and the prevention of monopolistic practices.

(Article Two) The Prime Minister is the Minister responsible for applying the provisions of the accompanying Law.

(Article Three) The executive regulations for the accompanying Law shall be issued by a decision of the Prime Minister within one month from the date of implementation of this Law.

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(Article Four) This Law shall be published in the Official Gazette and shall come into force three months after the day following its publication. This Law shall be stamped with the State seal and enforced as one of its laws. Issued at the Presidency on 6 Muharram 1426 AH (Corresponding to 15 February 2005 AD). Hosni Mubarak

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Law on Protection of Competition and Prevention of Monopolistic Practices

Article 1

The practice of economic activity shall be conducted in a manner that does not prevent, restrict, or harm free competition, all in accordance with the provisions of this Law.

Article 2

In the application of the provisions of this Law, the following words are intended to have the meanings indicated alongside each:

(a) Persons: Natural persons, legal entities, economic entities, unions, associations, financial conglomerates, and conglomerates of persons by any method of establishment, and other related parties as determined by the executive regulations in accordance with the objectives and provisions of this Law.

(b) Products: Goods and services.

(c) The Authority: The Competition and Anti-Monopoly Protection Authority established in accordance with the provisions of this Law.

(d) The Council: The Board of Directors of the Competition and Anti-Monopoly Protection Authority.

(e) Economic Efficiency: Reducing the average variable cost of products, or improving their quality, or increasing their production or distribution volume, or producing new products or expediting their production or distribution.

(f) Sectoral Authorities: Authorities concerned with supervising and monitoring economic activities in a specific sector.

(g) Economic Concentration: Any change in physical control or influence over one or more persons, resulting from any of the following cases:

• 1- The merger of one or more persons into an existing person who retains its legal personality after the merger, or the creation of a new person by combining at least two persons who were previously independent, and the dissolution of their legal personality or any part thereof.

• 2- The acquisition by one or more persons, directly or indirectly, of control or physical influence over another person or part thereof pursuant to a contract, or by purchasing securities or assets, or by other means. The acquisition may be individual or collective.

• 3- The creation of a joint venture or the acquisition by two or more persons of an existing person with the aim of creating a joint venture that conducts economic activity independently and permanently.

The following cases are not considered economic concentration:

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(1) Added by Law No. 56 of 2014, Official Gazette No. 36 (Repeated Ha) on 2 July 2014. (2) Added by Law No. 56 of 2014, Official Gazette No. 36 (Repeated Ha) on 2 July 2014. (3) Added by Law No. 175 of 2023, Official Gazette No. 53 Supplement (A) on 29 December 2023.

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• 1- The temporary acquisition by any company operating in the securities field of securities of a person with the aim of reselling them within one year from the date of acquisition, provided that it does not exercise any voting rights or take any action or measure that would influence the strategic decisions or commercial objectives of the acquired person. The Authority may extend this period upon request if the acquirer proves that it is impossible to resell the securities within one year, as determined by the executive regulations of this Law.

• 2- The occurrence of a merger or acquisition between companies belonging to the same person, and this process is considered restructuring. The obligation to notify arises only in the case of a change in control or physical influence, directly or indirectly.

(h) Control: The ability of a person or persons controlling to exercise effective influence, directly or indirectly, by directing the economic decisions of one or more other persons, either based on a majority in voting rights or on the ability of the controlling person to veto economic decisions specific to the person or other persons, or by any other means. This includes any situation, agreement, or ownership of shares or stakes of any proportion, provided that it leads to actual control over management or decision-making.

(i) Physical Influence: The ability to influence directly or indirectly the policy of another person, including their strategic decisions or commercial objectives, as determined by the executive regulations of this Law.

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(4) Added by Law No. 175 of 2023, Official Gazette No. 53 Supplement (A) on 29 December 2023. (5) Added by Law No. 175 of 2023, Official Gazette No. 53 Supplement (A) on 29 December 2023.

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(j) Corrective Measures: A set of behavioral or structural measures aimed at removing the harmful effects on competition resulting from the implementation of economic concentration.

(k) Behavioral Measures: Measures that oblige the persons concerned with economic concentration to commit to or refrain from performing certain acts and actions.

Article 3

The relevant market in the application of the provisions of this Law is the market based on two elements: the relevant products and the geographic scope. The relevant products are those that are considered practical and objective substitutes for each other. The geographic scope means a specific geographic area where competitive conditions are homogeneous, taking into account potential competitive opportunities. All of this is in accordance with the standards specified by the executive regulations in accordance with the objectives and provisions of this Law.

Article 4

Control of a specific market in the application of the provisions of this Law is the ability of a person whose share exceeds 75% of that market to have an effective influence on prices or the volume of supply, provided that competitors have the ability to limit that. The Authority shall determine cases of control in accordance with the procedures specified by the executive regulations of this Law.

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(6) Added by Law No. 175 of 2023, Official Gazette No. 53 Supplement (A) on 29 December 2023. (7) Added by Law No. 175 of 2023, Official Gazette No. 53 Supplement (A) on 29 December 2023.

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Article 5

The provisions of this Law shall apply to acts committed abroad if they result in preventing free competition, restricting it, or harming it in Egypt, and constitute crimes under this Law.

Article 6

Agreement or contracting between competing persons in any specific market is prohibited if it causes any of the following:

(a) Raising, lowering, or fixing prices of the products involved in the transaction. (b) Dividing or allocating markets based on geographic areas, distribution centers, type of workers, type of products, market shares, seasons, or time periods. (c) Coordination regarding participation or abstention from entering competitions, tenders, practices, and other supply offers. (d) Restricting manufacturing, production, distribution, or marketing operations of products, including restricting the type or volume of the product or limiting its availability.

The Authority, upon request by interested persons, may exempt from the prohibition in this Article an agreement or contract aimed at achieving economic efficiency if it is proven that the mentioned agreement or contract will achieve

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(8) Amended by Law No. 56 of 2014, Official Gazette No. 36 (Repeated Ha) on 2 July 2014. (9) Replaced by Law No. 190 of 2008, Official Gazette No. 25 (Repeated A) on 23 June 2008, then amended by Law No. 56 of 2014, Official Gazette No. 36 (Repeated Ha) on 2 July 2014. (10) Replaced by Law No. 190 of 2008, Official Gazette No. 25 (Repeated A) on 23 June 2008, then amended by Law No. 56 of 2014, Official Gazette No. 36 (Repeated Ha) on 2 July 2014.

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benefit for consumers exceeding the effects of restricting competition. The executive regulations shall determine the procedures and conditions for submitting the request and the controls for issuing the Authority's decision.

Article 7

Agreement or contracting between a person and any of its suppliers or customers is prohibited if it restricts competition.

Article 8

It is prohibited for anyone who has control over a relevant market to do any of the following:

(a) Do anything that leads to the total or partial prevention of manufacturing, production, or distribution operations of a product for a specific period or periods. (b) Refuse to agree or contract on products with any person or stop dealing with them in a manner that restricts their freedom to enter, remain in, or exit the market at any time. (c) Do anything that leads to restricting the distribution of a product over others, based on geographic areas, distribution centers, customers, seasons, or time periods, among persons with vertical relationships. (d) Suspend the conclusion of a contract or agreement specific to a product on the condition of accepting commitments or products that are by nature or commercial usage unrelated to the product subject to the original agreement, contract, or transaction.

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(11) Added by Law No. 56 of 2014, Official Gazette No. 36 (Repeated Ha) on 2 July 2014. (12) Replaced by Law No. 56 of 2014, Official Gazette No. 36 (Repeated Ha) on 2 July 2014. (13) Replaced by Law No. 56 of 2014, Official Gazette No. 36 (Repeated Ha) on 2 July 2014. (14) Replaced by Law No. 56 of 2014, Official Gazette No. 36 (Repeated Ha) on 2 July 2014.