Client Updates

Egyptian Competition Authority Sets Precedent and Tackles RPM in Vertical Agreements

On 18 May 2024, the Egyptian Competition Authority (ECA) for the first time took action against a retail price maintenance (RPM) scheme and most favored nation (MFN) clauses.

On 18 May 2024, the Egyptian Competition Authority (ECA) for the first time took action against a retail price maintenance (RPM) scheme and most favored nation (MFN) clauses. Through their investigation the ECA discovered that eight manufacturers and suppliers in the household appliances market violated the Egyptian Competition Law by making RPM and MFN clauses.

In 2023 the ECA introduced guidelines limitations concerning the application of RPM and MFN clauses in horizontal agreements. Earlier this year the ECA expanded these guidelines to include a ban of such clauses in vertical agreements. The attention of the ECA to RPM and MFN clauses was in part motivated by pressures posed by several, substantial devaluations of the Egyptian Pound since 2022.

These devaluations caused retailers to introduce substantial price increases over the past years. Following these price hikes some manufacturers and suppliers started to adopt RPM and MFN clauses. Through their investigation the ECA found that manufacturers and suppliers in the household appliances market were concluding contracts with both organized retail chains and independent small stores, stipulating minimum resale prices and price unification provisions thus limiting inter-distributor competition. In addition, suppliers retaliated against distributors and retailers that did not act in accordance with the imposed minimum RPM. The ECA found that this conduct was direct violation of article 7 of the Egyptian Competition Law.

DownloadRead ArticleLISTEN HERE

Strategic Locations

Bremer maintains offices throughout the Near and Middle East and Africa, positioning clients for success in the region.

Egypt

21 Soliman Abaza
GIC Tower 3rd Floor
El-Dokki, 12311 Giza
Cairo, Egypt
egy@bremerlf.com

UAE

UG08-G1 RAKEZ
Amenity Center
Ras Al Khaimah
United Arab Emirates
uae@bremerlf.com

Saudi Arabia

4461 Al Hamdi
Ar Rabwah
Riyadh 12816
Saudi Arabia
ksa@bremerlf.com

Kuwait

Sahab Tower
Level 18
Mohammad Thunayan Al-Ghanim Street
Kuwait City, Kuwait
kwt@bremerlf.com

London

Nymphenburger Str. 190
D-80636 Munich

UAE

Nymphenburger Str. 190
D-80636 Munich