15
magazine
ALRAQABA
the entrance of a new competitor.
The Legislator means by sus-
pending the transactions at any
specified time period, is to sus-
pend dealing with the competitor,
which is known as commercial
boycotting. It means that a competitor refuses
to deal with his/her peers and prevents them
from obtaining his/her products and services.
It also means the agreement that happens
between competitors in order to tighten the
noose on another competitor through stopping
dealing with them. This type of harm cannot be
achieved unless it comes from someone with a
dominant controlling position, or from a group
of traders acting against each other.
The third trend is controlling economic
concentration processes:
Economic concentration processes can be
defined as the processes that lead to the con-
centration of working projects in the market in
a way that changes the structure of the com-
petition. Projects move towards concentration
because it has positive effects. Such as, the in-
crease of the economic performance efficiency
of the new entity resulted from projects merg-
ing, the increase of project’s market power and
reducing work risks. It is also considered an
appropriate escape method for changing proj-
ects that face inevitable liquidation.
Despite all of this, concentration processes
have negative aspects too. Horizontal merg-
ing
(2)
might entail the reduction of working es-
tablishments in the concerned market, or the
rise of a dominant market power, or the con-
centration increase in one industry. This may
result in the possibility of controlling prices and
production. Whereas in the case of vertical
merging
(3)
, the main purpose behind them is
to secure primary materials and secure selling
products. This may lead to market hindrance
because the merge between the producer of
a certain product and the supplier of a main
component of its production can threaten
freedom of competition for other producers of
the same product. Especially, if there were no
other suppliers from that main component. In
addition, the dominance of a producer on the
distributer of the same product can threaten
other producers in the field of
distribution.
Due to what can economic
concentration processes carry
in terms of positive and nega-
tive aspect, the need to adopt
a control policy arose in order to limit the ap-
pearance of dominant position in the con-
cerned market and might that entail from de-
creasing completion.
The Kuwaiti legislator addressed this issue in
Article (8) of Law No.10/2007. They specified
the cases that necessitated inform the Compe-
tition Protection Authority if the resulting share
reached a level that achieves control on the mar-
ket or strengthens the current dominance. Alter-
natively, when the total sale, business or assets
reach a value that enables market dominance or
increases shares. The Competition Protection
Authority studies risks according to the proce-
dures defined by the executive regulation. The
person concerned is informed of the council’s
approval or rejection with 15 days from the date
the decision was issued. The person concerned
must continue procedures in case of approval.
It is worthy to note that the Competition Pro-
tection Authority assumes the control of com-
petition restraining agreements between proj-
ects and the control of misusing the dominant
position through receiving complaints and no-
tification or by searching and looking by itself.
Whereas it assumes control over economic
concentration processes through receiving no-
tices from the parties concerned.
The Law included some exceptions for compe-
tition rules according to Article (6), which stated
that the provisions of the competition protection
law do not apply on projects owned or run by the
State and projects and activities regulated by a
special law. Also, the activities that aim to facilitate
economic activity, research, and development.
Furthermore, the Law allowed the Competition
Protection Authority to do some practices, agree-
ments, contracts and decisions that would limit
competition as an exception and according to
specific terms. Such as that the practices, agree-
ments, contracts and decisions achieve benefits
that exceed the effects of limiting freedom of
competition
■
(2)
Horizontal merging is the merging that occur between projects operating in the same market.
(3)
Vertical merging is the merging that occur between projects operating within different production levels.
The Competition
Protection Authority
studies risks according
to the procedures
defined by the
executive regulation
