Egyptian Competition Authority (ECA) Uncovers Further Competition Law Violations by Education Related Businesses

On 8 January 2024, the board of directors of the Egyptian Competition Authority (ECA) determined that cooperative associations violated Egyptian competition law by colluding and exchanging competition related information in in relation to contracts with the General Diwan of Minya Governorate for the supply of school meals.

During their investigation, the ECA found that several cooperative associations agreed to adopt a uniform approach when engaging in contracts with the General Diwan of Minya Governorate for the supply of school meals. This included agreements (1) to align on offers, (2) on rotational bidding whereby businesses would abstain from participating in specific tenders to avoid competing with others, and (3) to exchange of information on tenders, contracts awarded, technical specifications, and pricing. The ECA found that these practices violated article 6(c) of Law 3/2005, the Egyptian Competition Law. 

The ECA determined that through these violations the cooperative associations negatively affected the efficiency of government spending, resulting in waste of public fund. In their investigation report the ECA stressed that such actions not only undermine fair competition and harms consumers but also impedes government spending efficiency. This ultimately prevents various government agencies from acquiring goods and services at optimal prices and quality, directly impacting public welfare.

In response to these and previous violations in the context of public tenders the ECA established a department dedicated to oversee and examine public tenders. The primary objective of this department is to combat collusion and promote fair competition in government tenders. In addition, the ECA launched an awareness campaign seeking to increase the capacity of relevant personnel of government entities to detect manipulative methods employed by bidders in government tenders.

The recent action against suppliers of school meals is another piece in an ongoing series of investigations into the education industry and related sectors by the ECA. Most recently an ECA investigation concluded in early January 2024 led to 33 printing houses having been found to have colluded in public tenders for schoolbooks (for more details see our client update of 3 January 2024). Also in 2023, the ECA conducted several investigations into the education sector. In their decision of 25 February 2023, the ECA determined that the representative offices of two foreign publishing houses, in close cooperation with their authorized, Egyptian distributors, had engaged in horizontal agreements aimed at artificially increasing the price of educational textbooks in Egypt (for more details see our client update of 26 February 2023). Furthermore, in the second half of 2023, the ECA investigated violations of article 6(c), by 11 public and private schools and found them to have abused their dominant position in the market by restricting the sale of uniforms to exclusive outlets (for more details see our client update of 24 September 2023). 

The ongoing scrutinization of public tenders and consumer facing businesses by the ECA emphasizes the ECA’ commitment to raising competition law compliance in these areas. Businesses should take this trend serious and revisit their internal oversight and compliances processes. It is advisable to implement robust compliance programs that include training for sales and other related staff as well as monitoring of activities for competition law compliance.