Saudi Arabia

The Saudi Competition Law (Royal Decree No. (M/75) of 1440H, as amended) (the “Competition Law”) and its Implementing Regulations (the “Regulations”) have been in force for a substantive period, establishing a comprehensive legal framework (the “Competition Regime”). The General Authority for Competition (“GAC”) maintains an active and vigilant oversight of Saudi markets. Nevertheless, experience indicates that market participants often remain underprepared in navigating the full scope of the Regime’s prohibitions. Drawing from recent engagements, we observe that the most common compliance pitfalls are recurring themes: commercial arrangements, often well-intentioned, that inadvertently constitute resale price maintenance; output controls disguised as demand forecasting; and territorial management practices that cross into market partitioning. This article expands on our previous analysis of the GAC’s investigatory powers by detailing these persistent risks, elucidating the GAC’s enforcement perspective, and offering practical guidance to help businesses avoid regulatory exposure. Fixing Resale Price – The Conflation of Recommendation and Control The most consistent compliance risk arises from interference in the pricing autonomy of downstream customers. While rarely explicit, this practice commonly manifests through the circulation of recommended sale prices (“RSPs”). The critical issue emerges when RSPs are implemented with an expectation of adherence, reinforced through mechanisms such as: (i) conditioning commercial funding, stock compensation, or key account alignment on price compliance; or (ii) linking promotional support, rebates, or loyalty payments to a retailer’s maintenance of a specific shelf price. The GAC views such practices as violations of Article 5, Paragraph 1 of the Competition Law, which prohibits fixing or suggesting prices or other sale conditions. The GAC’s analysis is effects-based. Consequently, if internal guidance operates as a de facto directive, or if commercial benefits are withheld for price non-compliance, the GAC will likely characterize the conduct as illicit price-fixing. It is a safe conclusion that “non-binding RSPs” do not constitute a safe harbour where the commercial reality demonstrates a contrary effect. The key takeaway under article 5.1. is to ensure price guidance remains genuinely optional and to decouple all trade expenditure from adherence to a specific shelf price. Output Controls – A High-Risk Endeavour A similarly significant risk area involves the control of product or service quantities. This rarely appears as an overt directive to limit sales, but rather as periodic supply caps or gates applied to customers, channels, or regions. These are often framed as demand-planning exercises but function as hard stops once thresholds are met. A more complex variation involves pre-price-increase supply throttling to prevent “overstocking,” sometimes coupled with threats of clawbacks if a distributor exceeds an allotted cap. In legal terms, articles 5.2, 5.3, and 5.7 of the Competition Law prohibit practices that determine production quantities, limit the flow of goods, or restrict distribution. The GAC will look beyond commercial justifications to assess whether supply is being restricted for an anti-competitive purpose. Therefore, enforcing purchase ceilings, particularly in anticipation of pricing actions, is inherently risky. To manage commercial volatility, companies should utilize neutral tools related to credit, logistics, and service levels, tied to objective risk factors—not volume ceilings linked to commercial timing. Territorial Management Sliding into Market Partitioning In regionally structured supply chains, efforts to prevent cross-border “leakage” from neighbouring jurisdictions can swiftly devolve into prohibited market allocation. A company concerned that distributors in a higher-priced jurisdiction are sourcing products from a lower-priced neighbouring market may be tempted to implement restrictive measures. In this context, side letters or policies that penalize exports into neighbouring markets, delisting specific SKUs, or engineering portfolio differences primarily to render parallel imports less profitable—absent legitimate regulatory or consumer protection reasons—may be construed as anti-competitive territorial protection. Article 5.6 of the Competition Law contains a broad prohibition on allocating markets by geography, customer type, or sales channel. Furthermore, article 5.3 expressly targets restrictions on the free movement of goods. The Competition Regime adheres to the established distinction between active and passive sales: while a supplier may, in certain vertical contexts, restrict a distributor from activelytargeting sales in another distributor’s exclusive territory, it cannot prohibit passivesales—that is, responding to unsolicited orders from customers in that territory. This principle is clarified in the new GAC Guidelines on Dealing with Vertical and Horizontal Relationships, issued in July 2025. The Rebate Trap Rebates and trade expenditure are not inherently unlawful, and the Competition Law does not prohibit discounting. Liability arises when these commercial levers are structured to achieve prohibited outcomes. High-risk rebate structures include: (i) progressive rebate tiers tied to volume targets that effectively compel purchases irrespective of demand; (ii) conditional support linked to a customer’s adherence to a specific shelf price or promotion; and (iii) selective, non-transparent funding that advantages one key account over similarly situated rivals without objective justification. Such practices may violate article 5.1 of the Competition Law by constituting a fixing of sale conditions or resale price maintenance. For entities in a dominant position, article 6.4. introduces an additional layer of risk, as discriminatory treatment of trading partners can constitute an abuse of dominance. Recurring Abuse of Dominance Issues Entities holding market shares at or above 40% trigger a dominance analysis. Common missteps include leveraging discount structures and funding to discipline retailers that deviate from preferred RSPs and refusing to supply, or threatening delisting, to curb parallel trade or extract favourable terms. While such conduct is problematic for all market players, it is significantly amplified under article 6 for dominant entities. Practices such as price-conditioned supply and discriminatory terms attract heightened scrutiny and pose a substantially greater enforcement risk for dominant entities. Refresher: Key provisions of the Competition Regime the KSA Competition Law empowers the GAC to investigate anti-competitive behaviours in Saudi markets. As a reminder of the provisions addressed under our previous installment, remember that the Compettion Regime enables empowers the GAC to undertake its duties as follows: Article 15 of the Competition Law authorizes investigators of the GAC to inquire, gather evidence, and investigate violations of the Competition Regime where the GAC personnel would have equivalent to law enforcement capacity. Article 16 of the Competition Law authorizes the GAC personnel to seek the assistance of the competent authorities, including law enforcement agencies, to enable them to carry out their duties. Article 16 also prohibits any entity from obstructing the operations of any GAC officers or investigators, including prohibiting or withholding any information, providing misleading information, or concealing or destroying documents that benefit the investigation by the GAC. This is further emphasized by articles 36 through 38 of the Regulations. Such an umbrella of authority is furthered by granting GAC personnel extra-territorial authority to investigate foreign incidents with effects on the KSA market per the provisions of article 35 of the Regulations. A key element in fostering a healthy competitive landscape is recognizing the GAC’s substantial investigatory authority and proactively complying with the Competition Regime. Reiterating Competition Law Compliance As outlined in our previous instalment, proactive compliance measures are critical for mitigating risk under the Competition Regime. The following steps are fundamental to establishing robust antitrust policies and avoiding substantial financial sanctions. Conduct Regular Audits: Entities are advised to undertake legal due diligence reviews of their documents, operations, and commercial correspondence to ensure compliance. This is essential for identifying and remedying potential violations, and for assessing the entity’s overall risk profile, whether or not it is currently subject to GAC scrutiny. Fair Rebates: All entities in the market are encouraged to review their rebate schemes and implement an objective rebate programme, one that does not discriminate between any of the vendors benefiting from its implementation. Implement Employee Training Programs: Entities should provide comprehensive antitrust and competition training to all employees, with a focus on personnel in leadership, sales, and procurement roles. Training should delineate lawful versus unlawful practices, establish clear communication protocols, and detail reporting mechanisms to prevent violations. Establish Robust Internal Policies: Entities must draft and implement internal policies designed to mitigate anti-competitive risks. These should include clear guidelines on interactions with competitors, vendors, and customers, as well as protocols for pricing and market analysis. Seek Proactive Legal and Regulatory Guidance: When navigating complex or novel situations, seek expert legal counsel to ensure compliance and pre-empt regulatory issues. Conclusion Combating anti-competitive behaviour remains a work in progress for market participants. While multiple factors impact a company’s ability to ensure full compliance, consistent internal action and the cooperative nature of the GAC are key elements that enable businesses to successfully navigate the pitfalls of the Competition Regime and mitigate the risks associated with allegations of anti-competitive conduct and abuse of dominance. Authors: Asad Ahmad, Head of Anti-Trust & Competition and Khaled Al Khashab, Associate

5 NOVEMBER 2025 – Global law firm DLA Piper has advised the Saudi Water Partnership Company (SWPC) on the successful close of the Jubail–Buraydah Independent Water Transmission Pipeline Project (IWTP), with a total project value of approximately USD2.2 billion. The project, which includes the development of a 587 km pipeline, will connect the Eastern Province of Jubail to the city of  Buraydah (in the Qassim region). It will be one of the largest water transmission projects in the Kingdom. Developed under a 35-year Build-Own-Operate-Transfer (BOOT) model, the pipeline, once complete, will have the capacity to transfer approximately 650,000 cubic meters per day of drinking water, enhancing water security for more than two million citizens. DLA Piper's role in this project builds on its work with the SWPC across its Independent Sewage Treatment Plant and Independent Water Project programmes. The firm has previously advised on landmark projects, including the first IWTP project, Rayis–Rabigh, and the first Independent Strategic Water Reservoir project, Juranah. The completion of this project reinforces the firm's leading capabilities in Project Finance and sectoral capabilities and knowledge, enabling it to structure and deliver complex, large-scale infrastructure projects that support the objectives of key initiatives, such as the National Water Strategy 2030 and Saudi Vision 2030.   The DLA Piper team was led by Adam Haque, a Dubai-based partner in the firm's Projects practice, part of the Finance practice. He was supported by a team from the firm's Dubai and Riyadh offices, including Finance Partner, and Co-Managing Partner of DLA Piper's Riyadh office, Paul Latto, along with Agathi Trakkidi (Finance, legal director), Rhys Rowland (Finance, senior associate), and Trisha Jivan and Abdulrahman Alhusain (both Finance associates). Commenting on the project, Adam Haque said: "This landmark project will transform the way water is supplied to millions of citizens across the region. Developed through the BOOT model, the project is a key example of how the Kingdom is increasing the use of public-private partnership financing for critical infrastructure that aligns with the Saudi Vision 2030. "The successful close of this project is another example of how our cross-border teams can support clients with notable and complex projects." DLA Piper's Finance practice is one of the driving forces of the DLA Piper global practice, providing market-leading insight and advice and representing leading investment and commercial financial institutions, public and private companies and government entities. The team advises clients across the full spectrum of banking/finance and capital markets, including asset-based lending, leveraged and debt finance, capital markets/high-yield bonds, derivatives, digital finance, fund finance, securitisation and structured finance, project finance, real estate finance, corporate treasury and venture finance. About DLA Piper DLA Piper is a global law firm helping our clients achieve their goals wherever they do business. Our pursuit of innovation has transformed our delivery of legal services. With offices in the Americas, Europe, the Middle East, Africa and Asia Pacific, we deliver exceptional outcomes on cross-border projects, critical transactions and high-stakes disputes. Every day we help trailblazing organizations seize business opportunities and successfully manage growth and change at speed. Through our pro bono work and community investment around the world, we help create a more just and sustainable future. Visit dlapiper.com to discover more. Contact Suraj Mashru, Senior PR Manager (UK), DLA Piper, +44 (0) 207 153 2617, [email protected] Jasmine Akouiradjemou, Communications and Events Manager (Dubai), DLA Piper, +971 4438 6119, [email protected]  

The Kingdom of Saudi Arabia has taken a significant step forward in reshaping its arbitration landscape with the release of the Draft Arbitration Law. This development reflects Riyadh’s broader ambitions under Vision 2030 to become a hub for commerce, dispute resolution, and foreign investment in the Middle East. For businesses, investors, and practitioners alike, the law represents a modern, comprehensive framework designed to align with international standards while respecting Saudi Arabia’s unique legal identity rooted in Sharia principles. Modernization and International Alignment The Draft Arbitration Law streamlines procedures and introduces clearer definitions, greater flexibility for parties, and stronger enforcement mechanisms. Importantly, it applies not only to domestic arbitration seated in the Kingdom but also to international commercial arbitration with a Saudi nexus, should the parties agree. This dual scope underscores Saudi Arabia’s desire to attract cross-border commerce and investment by assuring international parties that arbitration proceedings will meet global best practices. Provisions governing interim measures, electronic communications, virtual hearings, and enforcement of awards demonstrate a clear effort to align with UNCITRAL standards while retaining a distinctly Saudi character. Key Highlights Arbitration Agreement: The law recognizes electronic formats and digital signatures, broadening access in today’s digital economy. Tribunal Composition: Arbitrators must have full legal capacity, but there are no restrictions on nationality unless parties agree otherwise, widening the pool of expertise available. Procedural Flexibility: Parties may select their own procedural rules, including institutional rules, provided they do not contravene Sharia and provides for virtual hearings and electronic submissions. This allows alignment with leading international arbitration centers. Interim and Conservatory Measures: For the first time, tribunals can order measures to preserve assets, maintain status quo, or secure evidence. Courts are empowered to enforce these measures quickly. Finality of Awards: Awards are binding and enforceable, with annulment limited to narrow grounds, such as violation of Sharia or public policy, improper tribunal formation, or incapacity of a party. Enforcement: Awards have the same res judicata effect as court judgments, subject to verification by Saudi courts. Certified Arabic translations are required for awards in other languages. A Balancing Act: Modern Standards and Local Identity The Draft Arbitration Law reflects a careful balance between international norms and domestic legal principles. While inspired by global models such as the UNCITRAL Model Law, its mandatory references to Sharia and Saudi public policy maintain continuity with the Kingdom’s legal tradition. This duality will be familiar to regional practitioners, but for international users it provides reassurance that Saudi Arabia is committed to predictability while remaining anchored in its constitutional foundations.   Business Confidence and Investor Protection For multinational corporations, joint ventures, and financial institutions, arbitration is often the preferred method of dispute resolution due to its neutrality and confidentiality. The Draft Law goes a long way in addressing investor concerns around enforceability and efficiency, especially by introducing time limits for certain procedures and enabling virtual hearings. These reforms support Riyadh’s strategic goal of becoming a regional hub for finance and trade. Opportunities for the Region For the wider Middle East, the Saudi reform raises the bar. It will encourage greater consistency across jurisdictions, increase investor confidence, and may well inspire similar updates in neighboring states. Given the Kingdom’s role as the largest economy in the GCC, this legislation is likely to influence the direction of arbitration reform across the region. GLA & Co’s Perspective As a firm deeply engaged in regional arbitration, GLA & Co recognizes the importance of this draft law for the legal community and business sector. Nader Al Awadhi, Senior Partner at GLA & Co, commented: “Saudi Arabia’s Draft Arbitration Law is a milestone for the Kingdom and for the region. It brings the Kingdom’s arbitration framework closer to international standards while preserving its unique legal identity. For businesses, it provides clarity, flexibility, and—most importantly—confidence that their disputes will be resolved fairly and efficiently. At GLA & Co, we view this as a positive development that will enhance Saudi Arabia’s role as a regional leader in dispute resolution.” Conclusion The Draft Arbitration Law marks a new era for dispute resolution in Saudi Arabia. By integrating international best practices with local legal traditions, the Kingdom is signaling its readiness to host high-value commercial disputes and to strengthen its attractiveness as a global investment destination. GLA & Co will continue to monitor the progress of this law closely and provide clients with up-to-date analysis and practical guidance. As the Middle East’s leading regional law firm, we remain committed to supporting clients in navigating this evolving landscape and in harnessing the opportunities it presents.

GLA & Company has successfully secured merger control clearance from the Saudi General Authority for Competition (“GAC”) in Saudi Arabia on behalf of Bajaj Auto International Holdings B.V. (the Buyer) in relation to its acquisition of an additional controlling stake in Pierer Bajaj AG (the Target) from Pierer Industrie AG (the Seller). The EUR 50,600,000 transaction grants the Buyer sole control over the Target, marking a significant milestone in Bajaj Auto’s long-standing partnership with the Pierer Group and in its strategic global expansion. GLA & Co’s Antitrust & Competition team, which was led by Asad Ahmad, Head of Anti-Trust & Competition with the assistance of Associates Khaled Al Khashab and Shahad Al Humaidani, advised the Buyer on all aspects of the Saudi merger control process, including preparing and submitting the economic concentration filing, compiling supporting documentation, and engaging with the GAC throughout the review to secure approval in less than a week from submission of filing fee. The Target, Pierer Bajaj AG, was established from the cooperation between Bajaj Auto Limited (“BAL”) and the Seller’s KTM brand in 2007, with the Target’s sole business being Pierer Mobility AG (PMAG), a holding company for KTM AG. The Buyer, a Netherlands-based wholly owned subsidiary of BAL, is part of one of the world’s leading manufacturers of two- and three-wheeled vehicles, headquartered in Pune, India. The Seller, Pierer Industrie AG, is a globally active industrial investment group with a diverse portfolio in the production and distribution of motorbikes, high-performance vehicle components, electric bicycles, and automotive wiring solutions. GLA & Co’s Antitrust & Competition team is recognized for its deep expertise in advising on complex merger control and competition law matters across the MENA Region. The team regularly supports clients in navigating regulatory frameworks, securing clearances for high-value cross-border transactions, and managing antitrust risks in diverse industries. Combining technical legal knowledge with great working relationships with the regulators, the practice is well-equipped to handle all aspects of competition law—from economic concentration filings to anti-competitive behaviour investigations and ensuring compliance in complex multi-jurisdictional deals. Alex Saleh, Managing Partner at GLA & Co, commented, “We are delighted to have supported Bajaj Auto in obtaining merger clearance from the GAC for this strategic transaction. This matter reflects the growing significance of competition law in cross-border industrial investments and demonstrates our ability to navigate complex regulatory processes in Saudi Arabia with precision and efficiency.” This clearance underscores GLA & Co’s leading position in advising on high-value, cross-border transactions and competition law matters across the MENA Region, cementing the firm’s reputation for delivering practical, business-focused legal solutions. For more information, please contact Alex Saleh, Managing Partner, or Asad Ahmad, Head of Antitrust & Competition.