The Egyptian Competition Authority (ECA) Issues Fines Against Petroleum Product Distributors

The Egyptian Competition Authority (ECA) recently took actions to address competition law violations in the petroleum product distribution market. Specifically, the authority found two companies, both wholly public owned, to have abused their dominant position in the market though tying and bundling.

The two publicly owned companies required customers who sought to purchase bitumen 60/70 to also purchase emulsions and bituminous solutions. The ECA found that this conduct violated the prohibition of tying and bundling of article 8 Law 3/2005, Egyptian Competition Law. Under Egyptian law tying and bundling is permissible, unless the business engaging in tying and bundling has a market dominant position. For businesses with market dominant positions tying and bundling is a per se violation. Hence, tying and bundling by market dominant businesses is a violation of article 8 Competition Law, regardless of whether the practice has negative impact on competition.

In responds to the violations discovered the ECA issued explanatory guidelines regulations governing market dominant positions and obligations and restrictions imposed on dominant businesses by the Competition Law. These guidelines aim to clarify the authority’s position and interpretation of the relevant provisions of the Competition Law.

The action taken by the ECA against two publicly owned companies underscores the commitment of the ECA to enforce the countries antitrust regime. In a region where authorities have traditionally shied away from pursuing public sector entities and publicly owned companies, the actions of the ECA are very welcome. The equal treatment of publicly and privately owned companies levels the playing field and provides a basis for healthy competition.