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Modernization of Competition Law and Policy in Egypt: Past, Present and Future

  • Dong-Hwan Kim (a1) and Yo Sop Choi (a1)

Abstract

Competition laws and policies play an important role in developing countries. More than 130 countries have adopted either a competition law or a similar framework of anti-monopoly laws that aims to improve social welfare. Most African countries have already started developing their competition regimes, and regional trade organizations in Africa have provided competition sections in their free trade agreements to enhance enforcement cooperation. For fledgling competition regimes in Africa, the improvement of effective public enforcement and competition law culture has become an essential driver of competition law development. In particular, Egypt has demonstrated its efforts towards the modernization of competition law and the enhancement of fair and free competition, which is an example of the development of the competition regime in a developing African country. This article discusses the development of the Egyptian competition regime from a comparative perspective and suggests proposals for its further modernization.

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*

Assistant professor, Department of Arabic, Hankuk University of Foreign Studies, South Korea.

**

Associate professor of law, Graduate School of International and Area Studies, Hankuk University of Foreign Studies, South Korea.

This work was supported by the Hankuk University of Foreign Studies Research Fund.

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1 See, for example, Gerber, DJEconomic development and global competition law convergence” in Sokol, DD, Cheng, TK and Lianos, I (eds) Competition Law and Development (2013, Stanford University Press) 13.

2 See, for example, Van den Bergh, RComparative Competition Law and Economics (2017, Edward Elgar) at 115.

3 See, for example, Matsushita, M, Schoenbaum, TJ and Mavroidis, PCThe World Trade Organization: Law, Practice, and Policy (2nd ed, 2006, Oxford University Press) at 855–56.

4 See, for example, Both, GDDrivers of international cooperation in competition law enforcement” (2015) 38/2World Competition 301.

5 See, for example, Whish, R and Bailey, DCompetition Law (8th ed, 2015, Oxford University Press) at 1.

6 Cheng, TKHow culture may change assumptions in antitrust policy” in Lianos, I and Sokol, DD (eds) The Global Limits of Competition Law (2012, Stanford University Press) 205 at 206. The existence of various cultural backgrounds often undermines the possibility for the convergence or globalization of competition law.

7 Schwartz, MThe Egyptian uprising: The mass strike in the time of neoliberal globalization” (2011) 20 New Labor Forum 33 at 35.

8 Afifi, YIndependence of the Egyptian Competition Authority: Assessment and recommendation” (2010) 3 Global Antitrust Review 1 at 28 and following.

9 The idea of economic freedom is often emphasized by European competition critics discussing the ordoliberalism of the Freiburg School. See, for example, Ayal, AFairness in Antitrust: Protecting the Strong from the Weak (2014, Hart Publishing) at 22; Choi, YSCompetition policies and laws of India and China: The cases of developing countries with large economies” (2016) 19/3Inha Law Review 53 at 5457.

10 The trend in competition legislation in recent years has leaned towards the dominance of the two leading models: the US and the EU competition frameworks. See Dabbah, MCompetition law and policy in developing countries: A critical assessment of the challenges to establishing an effective competition law regime” (2010) 33/3World Competition 457 at 461.

11 YS Choi “Convergence of competition laws in northeast Asia, and the role of the EU competition regime” (2016) Global Legal Issues, Korean Legislation Research Institute 7 at 8–9.

12 A Bhattacharjea “Who needs antitrust? Or, is developing-country antitrust different? A historical-comparative analysis” in Sokol, Cheng and Lianos (eds) Competition Law, above at note 1, 52 at 58; Choi, YS and Fuchikawa, KCompetitive analysis of competition laws on buyer power in Korea and Japan” (2010) 33/3World Competition 499; Gerber, DJAsia and global competition law convergence” in Dowdle, MW et al. (eds) Asian Capitalism and the Regulation of Competition: Towards a Regulatory Geography of Global Competition Law (2013, Cambridge University Press) 36 at 38; Lee, JKorea” in Williams, M (ed) The Political Economy of Competition Law in Asia (2013, Edward Elgar) 47. The influence of fairness in competition law can also be found in Taiwan, Thailand and Indonesia.

13 Choi, YSThe rule of law in a market economy: Globalisation of competition law in Korea” (2014) 15 European Business Organization Law Review 419 at 421–23; Matsushita, MInternational Trade and Competition Law in Japan (1993, Oxford University Press) at 77.

14 See, for example, Choi, YSThe choice of competition law and the development of enforcement in Asia: A road map towards convergence” (2014) 22/1Asia Pacific Law Review 131 at 137–40.

15 See, for example, Lesch, AMEgypt's Spring: Causes of the revolution” (2011) 18 Middle East Policy 35 at 4142; DI Waked “Law, society and the market: Living with Egypt's competition law 2005–2015” (September 2016) at 5–8, available at: <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3091552> (last accessed 17 November 2019).

16 Egypt adopted its first comprehensive competition act in 2005: Law No 3 of 2005 on the Protection of Competition and the Prohibition of Monopolistic Practices.

17 Dabbah, MCompetition Law and Policy in the Middle East (2011, Cambridge University Press) at 237.

18 Ayal Fairness in Antitrust, above at note 9 at 31.

19 The concept of economic democratization often refers to the dispersion of private economic power. See, for example, Matsushita International Trade, above at note 13.

20 See Egyptian Competition Authority “Free market”, available at: <http://www.eca.org.eg/ECA/StaticContent/View.aspx?ID=13> (last accessed 17 November 2019).

21 Dabbah Competition Law and Policy, above at note 17 at 243; Waked “Law, society and the market”, above at note 15 at 8–11.

22 Traditionally, economic concentration is seen as a powerful form of pressure that harms the democratic process, and there have been a number of cases of deconcentration through constitutional amendments, for example in Japan and Germany. See, for example, Hadley, EMAntitrust in Japan (1970, Princeton University Press) at 4.

23 There have been approximately ten competition cases each year. For further detail, see Egyptian Competition Authority “Annual reports”, available at: <http://www.eca.org.eg/ECA/Publication/List.aspx?CategoryID=2> (last accessed 17 November 2019). However, the number of cases seems to be increasing as there were 23 investigations in 2013. See generally Organisation for Economic Co-operation and Development Annual Report on Competition Policy Developments in Egypt in 2013 (2014), available at: <http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=daf/comp/ar(2014)46&doclanguage=en> (last accessed 17 November 2019).

24 For example, “COMESA Competition Commission investigates football broadcasting rights” (28 February 2017) Africanantitrust.com, available at: <https://africanantitrust.com/2017/02/28/comesa-competition-commission-investigates-anti-competitive-restrictive-practices/> (last accessed 17 November 2019).

25 See, for example, Lawan, MIslamic law and legal hybridity in Nigeria” (2014) 58/2Journal of African Law 303.

26 The ECA often emphasizes the concept of the free market. See ECA “Free market”, above at note 20.

27 For example, Dabbah Competition Law and Policy, above at note 17 at 6.

28 Id at 21–22.

29 Many commentators seem to agree that Hisbah has a long history and that it prohibited fraudulent acts (ghishsh) following the words of the prophet, Muhammad: “Whoever cheats, he is not one of us”. See, for example, Hadith vol 3, book 12 at 1315, available at: <https://sunnah.com/tirmidhi/14/118> and Hadith, book 1 at 183, available at: <https://sunnah.com/muslim/1/190> (each last accessed 17 November 2019).

30 Dabbah Competition Law and Policy, above at note 17 at 27–28.

31 Ṭaʿīmah, Dirasāt fi al-Niẓām al-Islāmī [Studies on Islamic systems] (1986, Dār al-Jīl) at 36; see also Kim, D-HThe meaning of fair trade law in the Hisbah system: A comparative perspective” (2019) 18/1Journal of Middle Eastern Affairs 75.

32 Ṭaʿīmah, id at 28.

33 ͑Aqlah, N SalāmahAl-tarīkh al-iqtiṣādī li al-daulah al-islāmiyyah [Economic history of Islamic state] (2009, ʿImād al-dīn li al-Nashr wa al-tauzīʿ) at 136.

34 Law No 3, above at note 16.

35 See ECA “General policy of the ECA” (in Arabic) at 4, available at: <http://www.eca.org.eg/ECA/Upload/StaticContent/Attachment_A/3/ECA%20General%20policy.pdf> (last accessed 27 November 2019).

37 Id at 6–7.

38 Id at 6 and 9.

39 Id at 10.

40 Art 5 of the Act articulates its extraterritorial application to undertakings whose acts result in “the prevention, restriction, [of] or harm [to] the freedom of competition” in the Egyptian market, which constitutes a crime under the Act.

41 ECA “General policy”, above at note 35 at 9–12.

42 Id at 14.

43 Fels, A and Ng, WRethinking competition advocacy in developing countries” in Sokol, DD, Cheng, TK and Lianos, I (eds) Competition Law and Development (2013, Stanford University Press) 182 at 183.

44 See, for example, Muddida, R, Ndiritu, SW and Ross, TWKenya's new competition policy regime” (2015) 38/3World Competition 437 at 441.

45 Speelman, PCompetition law in the Middle East and North Africa: The experiences of Tunisia, Jordan, and Egypt” (2016) 48 New York University Journal of International Law and Politics 1227 at 1245.

46 AF Ghoneim “Competition law and competition policy: What does Egypt really need?” (ERF working paper 0239), available at: <https://erf.org.eg/wp-content/uploads/2017/05/0239Ghoneim.pdf> (last accessed 17 November 2019).

47 Dabbah Competition Law and Policy, above at note 17 at 237–38.

48 Id at 238–39; Furse, MAntitrust Law in China, Korea and Vietnam (2009, Oxford University Press) at 24.

49 LM Abdellatif and AF Ghoneim “Competition, competition policy and economic efficiency in the MENA region: The case of Egypt” part I (January 2005), available at: <https://www.researchgate.net/publication/277102642_Competition_competition_policy_and_economic_efficiency_in_the_MENA_region_the_case_of_Egypt> (last accessed 17 November 2019). In particular, the Europeanization of competition law through cooperation provisions has been evident in other developing countries. See, for example, Q Wu Competition Laws, Globalization and Legal Pluralism: China's Experience (2013, Hart Publishing) at 44. However, some argue that the Act does not reflect an accurate transplantation of foreign laws because of some missing foreign concepts or wording. See, for example, HM El-Kassas “The political determinants of the Egyptian competition law” (LLM thesis, 2006) at 41, available at: <http://dar.aucegypt.edu/handle/10526/4717> (last accessed 17 November 2019).

50 A vertical agreement that impedes competition is often considered to be a hardcore restriction with regard to trade between countries because it forecloses the market.

51 KH Attia “Developing effective relations with public prosecutors: The case of Egypt” The ICN Workshop, available at: <http://old.internationalcompetitionnetwork.org/uploads/library/doc716.pdf> (last accessed 27 November 2019).

52 This article does not deal with issues of merger control in Egypt. For further detail about Egyptian merger control, see Far, M ElLessons from the backyard of the EUMR: The Hyma plastic case in Egypt” (2012) 33/10European Competition Law Review 445.

53 See, for example, Fox, EMWorld competition law: Conflicts, convergence, cooperation” in Dhall, V (ed) Competition Law Today: Concepts, Issues, and the Law in Practice (2007, Oxford University Press) 224 at 241.

54 See “The exclusive broadcasting contract in the case between Confederation of African Football and Jazeera Sports Channel” (ECA press release in Arabic), available at: <http://www.eca.org.eg/ECA/upload/Publication/Attachment_E/125/%d8%b9%d8%b1%d8%b6%20%d8%a7%d9%84%d8%aa%d9%82%d8%b1%d9%8a%d8%b1.pdf> (last accessed 27 November 2019).

55 For further detail about the ECA's decision on beIN and CNE in 2017, see E Solyman “Egyptian Competition Authority watchdog says beIN Sports agreement with CNE legally invalid” (12 July 2017) Daily News Egypt, available at: <https://wwww.dailynewssegypt.com/2017/07/12/egyptian-competition-authority-watchdog-says-bein-sports-agreement-cne-legally-invalid/> (last accessed 27 November 2019). A number of court decisions relating to beIN Sports were made, including decisions of the Economic Criminal Court of Appeal in Cairo nos 2017-280 and 2017-1507. For further discussion of the trend towards regional cooperation regarding competition enforcement, see Fox “World competition law”, above at note 53 at 237.

56 Far, M El and Momtaz, MAEgyptian competition enforcement: Putting COMESA and LAS cooperation into practice” (2017) 8 Journal of European Competition Law and Practice 586 at 590.

57 The full text is available at: <http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E101:EN:HTML> (last accessed 17 November 2019). The influence of the substantive EU provisions on free trade agreements in Asia is evident. See also Choi “Convergence of competition laws”, above at note 11 at 25–27.

58 For example, one of the distinctive objectives of the competition regime in South Africa is public interest. See Kelley, L et al. Principles of Competition Law in South Africa (2016, Oxford University Press) at 3.

59 Ma, TAntitrust and democracy: Perspectives from efficiency and equity” (2016) 12/2Journal of Competition Law and Economics 233; Speelman “Competition law in the Middle East”, above at note 45 at 1231.

60 Ghosal, V and Mitra, SAdoption and reform of competition laws and their enforcement: A cross-country perspective” in Mehta, PS (ed) Evolution of Competition Laws and Their Enforcement: A Political Economy Perspective (2015, Routledge) 1 at 9.

61 Gal, MSCompetition Policy for Small Market Economies (2003, Harvard University Press) at 48.

62 See, for example, MA Momtaz “Egypt: Competition authority” (14 August 2017) Global Competition Review, available at: <https://globalcompetitionreview.com/insight/the-european-middle-eastern-and-african-antitrust-review-2018/1145575/egypt-competition-authority> (last accessed 17 November 2019).

65 See “Decision on Telecom Egypt” (ECA press release, in Arabic), available at: <http://www.eca.org.eg/ECA/upload/Publication/Attachment_E/123/عرض%20التقرير.pdf> (last accessed 28 November 2019).

66 For example, case 85/76, Hoffman-La Roche v Commission, ECLI:EU:1979:36.

67 See ECA “2017 annual report” (in Arabic) at 13–15, available at: <http://www.eca.org.eg/ECA/upload/Announcement/Attachment_A/86/Annual%20Report%202017-Final.pdf>  (last accessed 28 November 2019).

68 Case nos 2017-280 and 2017-1507, above at note 55.

69 “Egypt fines Qatar's beIN Sports CEO Nasser Al-Khelaidfi $22 million” (30 January 2018) Al Arabiya English, available at: <http://english.alarabiya.net/en/sports/2018/01/30/Egypt-fines-Qatari-Nasser-Al-Khelaifi-400-million-pounds-in-corruption-case.html> (last accessed 17 November 2019).

70 El Far and Momtaz “Egyptian competition enforcement”, above note at 56 at 588–89.

71 SA Alam “Proving a cartel without leniency programme: The Egyptian experience” The ICN Workshop, available at: <http://old.internationalcompetitionnetwork.org/uploads/library/doc724.pdf> (last accessed 27 November 2019).

72 See, for example, Lande, RHCreating competition policy for transition economies” (1997) 23 Brooklyn Journal of International Law 339 at 342.

73 Competition cases in Korea, China and Japan are often mentioned as useful citations. See, for example, Muddida et al “Kenya's new competition policy regime”, above at note 44. Vigorous enforcement can be supported by improving the competition culture. See also Choi “The choice of competition law”, above at note 14 at 146–49.

74 Furse Antitrust Law, above at note 48 at 259. Korean competition law includes a unique provision regarding unfair business practices that covers all types of commercial acts, the so-called catch-all provision.

75 See, for example, Kim, D-HClassification of Islamic unfair transactions upon the view of modern competition law in South Korea” (2018) 22 Arabic Language & Literature 121; Kim “The meaning of fair trade law”, above at note 31.

76 Several discussions have taken place regarding the transparency of the ECA's investigative powers. See Greiss, MInvestigative powers of the Egyptian Competition Authority: A guide for companies in the Egyptian market” (2010) 31 European Competition Law Review 456 at 465.

77 For example, M Greiss “Abuse of dominance under the Egyptian competition law: Investigating peculiarities that may have special effects in the economy” (2010) Mediterranean Competition Bulletin 22 at 23, available at: <http://ec.europa.eu/competition/publications/mediterranean/mcb_2.pdf> (last accessed 17 November 2019).

78 For example, the Korean Competition Act provides a presumption of market dominance when an undertaking's market share exceeds 50%, or when the total market share of three undertakings is above 75%. The Chinese Competition Act also provides a similar framework. For further detail, see Harris, HS et al. Anti-Monopoly Law and Practice in China (2011, Oxford University Press) at 96.

79 For further comparison, see Choi “The choice of competition law”, above at note 14 at 142–44.

80 Ghoneim, AFCompetition law and competition policy: What does Egypt really need?” (2003) 17 Boletin Latinoamericano de Competencia / Boletim Latinoamericano de Concorrncia 46 at 53; M El Far “The Egyptian state of competition: The steel market case study” (October 2014) at 22–26, available at: <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2515698> (last accessed 17 November 2019).

81 Jones, A, Sufrin, B and Dunne, NEU Competition Law: Text, Cases, and Materials (7th ed, 2019, Oxford University Press) at 5556.

82 There are few countries in southeast Asia that have a separate provision for vertical restraints. See, for example, Chew, CDiversity of national competition laws in the ASEAN region and the resulting challenges for businesses operating in the region” in Ong, B (ed) The Regionalisation of Competition Law and Policy within the ASEAN Economic Community (2018, Cambridge University Press) 58 at 84.

83 For example, Leegin Creative Leather Prods, Inc v PSKS, Inc 551 US 877 (2007), overruling the old per se rule on minimum resale price maintenance.

84 Far, M ElEnforcement policy of the Egyptian competition law: Vertical relations” (2014) 35/5European Competition Law Review 214.

85 Id “The Egyptian state of competition”, above at note 80 at 44 and following. Even before the adoption of Egyptian competition law, several governmental decisions were taken to prohibit the abusive practices of monopolists within the steel industry; see Selim, THMonopoly: The case of Egyptian steel” (2006) 2/3Journal of Business Case Studies 85.

86 “COMESA Competition Commission”, above at note 24.

87 There were critical issues surrounding the ECA's independence and its powers relating to sanctions. See, for example, Waked “Law, society and the market”, above at note 15 at 13.

88 There has been external pressure by the US in pursuit of a democratization agenda in Islamic countries. See, for example, Dabbah Competition Law and Policy, above at note 17 at 237.

89 Ibrahim, AN and Far, M ElConstitutionalising the Egyptian competition policy in the post revolutionary reforms” (2011) 3 Mediterranean Competition Bulletin at 4, available at: <http://ec.europa.eu/competition/publications/mediterranean/mcb_3_1.pdf> (last accessed 17 November 2019).

90 Dabbah Competition Law and Policy, above at note 17 at 24.

91 For example, McMahon, KCompetition law and developing economies: Between ‘informed divergence’ and international convergence” in Ezrachi, A (ed) Research Handbook on International Competition Law (2012, Edward Elgar) 209 at 215.

* Assistant professor, Department of Arabic, Hankuk University of Foreign Studies, South Korea.

** Associate professor of law, Graduate School of International and Area Studies, Hankuk University of Foreign Studies, South Korea.

This work was supported by the Hankuk University of Foreign Studies Research Fund.

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Modernization of Competition Law and Policy in Egypt: Past, Present and Future

  • Dong-Hwan Kim (a1) and Yo Sop Choi (a1)

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