12
magazine
ALRAQABA
Legislations
able in the market. They prohibited the ones
in control to affect their quantity or price. They
considered that a misuse of the dominant posi-
tion. The following are the practices related to
products prices, which are mentioned in article
(4) of Kuwaiti Law:
- Affecting products prices by increasing
them, lowering them, fixing them, or by
fictive transactions, or any other way that
contradicts market mechanisms for dam-
aging other competitors.
Because the process of determining prices
according to the market mechanism depends
on the forces of supply and demand, which
changes automatically until a balance is struck
between them that satisfies everyone. After
that, it is prohibited to determine prices using
other mechanisms.
Agreement on price determination can happen
in a direct way when parties agree to achieve
this result directly. Whether it depended on
determining the full price of products, or part
of the total price of the product. For example,
agreeing on specifying a maximum discount
given by sellers to buyers, or giv-
ing buyers long time for paying
for merchandise considering it
is part of reducing its value. In
addition, agreement on deter-
mining prices can occur in an
indirect way. For example, mak-
ing fictive transactions showing an increase of
demand for the purpose of increasing supply
and therefore increasing the price.
It is noticed that the Legislator required in this
case the intent of harming other competitors.
However, if the purpose was to make a legiti-
mate benefit, then these agreements are not
prohibited.
- Fabricating a sudden abundance of prod-
ucts that leads to trading them with an un-
real price, which affects the economics of
other competitors.
This means that the competitor deliberately
changed products quantity so that it leads to
price changes and ultimately affecting other
competitors.
- Selling products lower that its cost with the
intention to harm other competitors.
This is known as aggressive pricing, where the
competitor lowers his/her prices too much that
it exceeds the familiar limit regarding legitimate
competition.
This policy aims to gain control and access a
dominant position, because small competitors
cannot put up with these losses
resulting that they exit the mar-
ket. When they are eliminated,
the competitor raises the prices
up again to compensate for his/
her losses after gaining a bigger
control on the market.
Agreement on price
determination can
happen in a direct
way when parties
agree to achieve this
result directly
