The Competition Law
Ali Sharif Zu'bi Advocates & Legal Consultants
Jordan enacted its Competition Law in 2004. The law came into force on the date of its publication in the Official Gazette on September 1 2004 and replaced the Temporary Competition Law of 2002. Before 2002, there was no specific legislation governing competition in Jordan.
The law applies to all production, commerce and services in the Kingdom of Jordan and all economic activities outside the country that have a direct effect in Jordan.
The Committee for Competition Matters and the Competition Directorate
The Competition Law established the Committee for Competition Matters, which is responsible for presenting opinions and advice on the general plan for competition, as well as reviewing matters related to the Competition Law, including draft laws and regulations.
The law also created the Competition Directorate in the Ministry of Industry and Trade, which has the following duties and responsibilities:
- Contributing to the general competition plans and legislation.
- Promoting, protecting and encouraging free competition.
- Gathering information and conducting investigations to uncover any violations of the competition rules.
- Issuing opinions on matters related to its activities.
- Cooperating with similar bodies outside of Jordan in exchanging general information and data.
Any practices intended to prevent fair competition, and deemed in contravention of the Competition Law, are prohibited, especially those aiming to fix the prices or quantities of products; share the market on the basis of geographical regions; set barriers to the entry of new enterprises, thus eliminating them; or collude in bids by over- or under-bidding with the intention of preventing competition.
An enterprise that is dominant in the local market is also subject to the provisions, and is prohibited from discriminating against customers or preventing them from dealing with any competing enterprise. Any attempt to monopolise the resources necessary to a competing enterprise with the intention of manipulating market prices is also prohibited.
The resale of a product below its natural price (dumping) is prohibited if the action is intended to limit competition. Any violation of this provision will result in the fine of between JD200 ($282) and JD20,000. The provision does not apply to perishable goods, or to sales with the intention of liquidating a business or to restock at lower prices.
Any activity resulting in the full or partial transfer of ownership, interest, property, rights, shares or obligations from one enterprise to another is considered an operation of economic concentration.
If the economic concentration would result in the enterprise holding a dominant position in the local market (40% or more of the total local market transaction) then the enterprise must first receive approval from the Minister of Industry and Trade. This may be obtained by submitting a petition to the Competition Directorate, on the form adopted by the Ministry of Industry and Trade. The form must include copies of the articles and memoranda of the enterprises concerned; a copy of the agreement of concentration; a list of the most important products and services provided by the concerned enterprises; a report of the positive effect of the operation on the market; financial statements of the most recent fiscal years of the concerned enterprises; a list of shareholders and partners of the concerned enterprises; a list of officers and members of their management boards, as well as members of the board of directors; and a list of branches of each enterprise.
The Competition Directorate must publish an announcement regarding the petition in two daily newspapers at the expense of the applicant. The Minister of Industry and Trade may then approve the operation so long as it does not negatively affect competition, or if the suggested economic benefits outweigh the latter. The Minister of Industry and Trade may also allow the operation to continue provided that the enterprise agrees to meet the minister's conditions.
The Court of First Instance can hear cases related to any violations of the Competition Law. Any cases concerning inconsistencies with the competition provisions must provide evidence derived from: the Minister of Industry and Trade's decision on the recommendation of the director, enterprises from the private sector, licensed consumer protection associations, at least five consumers who have suffered harm, chambers of commerce and industry, and professional and syndicate organisations.
The court may then allow an order of declaration to show the extent of damages resulting from the breach of the Competition Law, order a removal of the violation within a period set by the court, and set a suitable penalty for the violators.
An officer of the Competition Directorate carries out the necessary investigations and may:
- Enter, during daily working hours, commercial establishments, offices and stores to conduct inspections and searches.
- View and seize documents, records and files, or obtain copies or photos of these files.
- Question people suspected of violating the Competition Law, and record their testimony in transcripts issued for that purpose.
Any person who prohibits an officer from carrying out his duties, or destroys or conceals documents, may be fined between JD500 and JD5,000.