In today’s rapidly transforming Saudi economy, competitive fairness is not just a regulatory ideal it is a legal imperative. As the Kingdom accelerates toward its Vision 2030 goals, the role of competition law has emerged as a cornerstone of the national legal and economic agenda. The Competition Law, administered by the General Authority for Competition (GAC), serves as a powerful instrument to protect market integrity, promote innovation, and ensure consumer welfare across all sectors of the economy.
The Legal Pillar Behind a Diversified Economy
Saudi Arabia’s Competition Law was first enacted in 2004 and subsequently amended significantly in 2019 to reflect international best practices. These reforms weren’t merely technical—they were strategic. They signalled a departure from informal market controls and a move toward structured oversight, particularly in sectors newly opened to privatisation and foreign investment.
The law’s provisions go beyond penalising monopolistic behaviour. They aim to create a level playing field in which entrepreneurship can flourish and SMES can scale without artificial barriers. By prohibiting practices such as price fixing, collusion, and abuse of dominance, the law safeguards not only current competition but also the market’s future dynamism.
Market Power and the Risk of Overreach
Holding market power in Saudi Arabia is not unlawful. But misusing it is. This distinction is central to how the law operates. Firms with significant market share—typically 40% or more—must exercise heightened caution. Predatory pricing, exclusive supply arrangements, or unjustified refusals to deal can trigger scrutiny, particularly where such conduct suppresses innovation or deters entry by smaller players.
Merger control, another key pillar of the law, has been reshaped to ensure that consolidation does not come at the cost of market diversity. High-value mergers and acquisitions must be pre-notified to the GAC, which retains the authority to approve, condition, or prohibit deals that may distort market structure.
The Cost of Non-Compliance
Enforcement in Saudi Arabia is no longer theoretical. The GAC has rapidly scaled its investigative and sanctioning powers, issuing significant penalties in recent years. These include fines of up to 10% of a company’s annual revenue, or SAR 10 million where revenue is unquantifiable, as well as structural remedies such as the unwinding of anti-competitive agreements or forced divestitures.
But compliance is not just about avoiding fines. It is about fostering a culture of lawful competition. The GAC actively engages with the business community through guidelines, public consultations, and awareness campaigns, particularly targeting SMES and new entrants who may lack in-house legal infrastructure.
International Context and Cross-Border Relevance
As Saudi Arabia emerges as a regional investment hub, the implications of its competition law extend far beyond its national borders. The GAC’s collaboration with international authorities and participation in multilateral fora underscore the Kingdom’s commitment to global norms, particularly in sectors such as e-commerce, fintech, and digital infrastructure.
For multinational corporations, this means increased scrutiny of both local and global practices. Joint ventures, pricing strategies, and supply agreements must be reviewed not only for commercial soundness but also for compliance with Saudi competition principles, which are increasingly harmonised with EU and OECD frameworks.
Why Legal Insight Matters
The complexity of competition law in Saudi Arabia lies not only in its rules but in its application. Many businesses fail to recognise that informal understandings, overly aggressive pricing, or exclusivity clauses can raise red flags. As enforcement sharpens and legal thresholds become more defined, proactive legal review and risk assessment are essential.
Boards and executives must view competition law not as a constraint, but as a strategic framework that rewards ethical growth, fosters investor confidence, and supports the Kingdom’s broader economic goals.
Saudi Arabia’s Competition Law is more than a regulatory tool—it is a signal of the Kingdom’s maturity as a rules-based economy. As new sectors open and digital markets expand, the law will continue to evolve. But the message remains clear: market success must be earned through innovation, not protected through dominance.