Egyptian Competition Authority (ECA) Initiates Criminal Proceedings Against Aluminum Parts Manufacturers for Price Fixing

On 3 September the Egyptian Competition Authority (ECA) announced that their Board of Directors decided to initiate criminal proceedings against 14 manufacturers of aluminum profiles for allegedly engaging in price fixing. This step is the result of an extensive investigation by the ECA into the market for aluminum profiles.

Earlier this year the ECA commenced an investigation into the aluminum profile market. In particular, the ECA sought to determine if the conduct of key competitors had negative impacts on competition in the aluminum manufacturing market. The investigation revealed that a group of companies colluded to increase and stabilize the price of aluminum profiles in Egypt. The ECA found that the agreement to raise and stabilize prices for aluminum profiles constituted a horizontal agreement prohibited under the Egyptian Competition Law. In their findings the ECA went on to elaborate that the agreement had negative impacts on competitors and consumers. The agreement harmed competitors as it disrupted market mechanisms and prevented companies from reducing costs through innovation. Furthermore, it affected consumers as the agreement lead to higher prices for consumers and increased profits for the offenders.

Considering the serious offences committed by the 14 members of the cartel, the ECA now resolved to initial criminal proceedings and seek criminal sanctions against the offenders. As a result of these proceedings sanctions may be imposed on the companies as well as relevant individuals.

To ECA’s actions fit into the authorities’ wider efforts to prevent similar offenses. Over the past year we have see the ECA intensifying their endeavors to raise awareness for the Egyptian antitrust regime. The authority is increasingly active in publishing their decisions, published guides, and organized seminars and conferences to engage the business community. As part of this campaign the ECA also has taken steps to advertise the Egyptian leniency program.

Under the Egyptian leniency program persons or businesses engaged in violations of the competition law, may be granted full or partial amnesty from sanctions, if they come forward and reveal or aid in the investigation of a violation. To benefit from preferential treatment under the leniency program, the Egyptian Competition Law requires that an applicant not only reveals the the violation. They also must provide supporting evidence they may have that helps in proving the violation. The first person to come forward may be granted full exemption form sanctions. Subsequent applicants may—in the discretion of the competent court—be grant a partial amnesty. For a more detailed overview of the Egyptian leniency program see our client update on the Egyptian leniency program of 10 February 2023.