Government suggests raising monopoly fine to EGP 500m in Protection of Competition Law amendment

President entitled to appoint authority's board of directors but cannot dismiss them

The Parliament's economic affairs committee started on Saturday discussing a bill submitted by the government to amend certain provisions in the Protection of Competition and the Prohibition of Monopolistic Practices Law.
The government is considering toughening up penalties on violation of Article 6 of the law by imposing a fine of not less than 2% and does not exceed 12% of the total revenues of the violating person or persons, in the fiscal year prior to the offense.
In the case the concerned authority could not calculate the total revenues as mentioned, the fine shall be at least EGP 500,000 and does not exceed EGP 500m.
Furthermore, Article 6 prohibits the agreement, contracting, or the coordination between competitive persons, or collusion between different parties directly or indirectly in any sector as long it would cause any of the following: raise, reduce, or stabilise the underlying product prices, or sharing/splitting market shares based on either geographical areas, distribution centres, customer segments, product quality, or seasons.
The violations also include the “coordination with respect of applying or withdrawing from tenders, auctions, other offers of supply, and restriction of manufacturing, production, distribution, or marketing of certain products, whether their type, size, or availability.”
According to the draft amendments of which Daily News Egypt obtained a copy, the penalty for violating the provisions of Articles 6 bis, 7, and 8, is a fine of not less than 1% and does not exceed 10% of the violating person or persons' total revenues in the fiscal year prior to the offense.
In the event of the concerned authority's failure to calculate the revenues, the fine shall be of at least EGP 100,000 and does not exceed EGP 300m. The fine shall be doubled in the case of reoccurrence of the violation of any of the provisions of Articles 6, 6 bis, 7, and 8 of this Law.
Upon the request of the concerned parties, the Consumer Protection Agency (CPA) is entitled to exempt any agreement, contract, or coordination which aims at achieving economic efficiency from the prohibition, if it was proved that this agreement or contract has a higher benefit for consumers beyond the negative effects of limiting competition or shall not impose competitive restrictions which are not preferred in the situation.
Article 22 bis of the draft amendment imposes a fine of not less than EGP 10,000 and does not exceed EGP 500,000 per each day of delay, by any person who fails to notify the agency in accordance with the second paragraph of Article 19, starting from the date fixed to submit that notice.
Article 26 of the amendments stipulates that no criminal proceedings shall be made against the first person who reports committing an offense in cooperation with others and brings evidence for it. The agency shall maintain his anonymity.
The court may, for the rest of the violators, exempt the defendants from two-thirds of the prescribed penalty if they contributed to the disclosure of the offense's elements or its proofs during any stage of the investigation.
The president shall be entitled to appoint the CPA's board of directors after the approval of the majority members of the parliament, but cannot dismiss them.