INTRODUCTION: COMPETITION LAW AND POLICY IN DEVELOPING COUNTRIES
Competition law is the body of law that prohibits anti-competitive agreements, abuses of market dominance or monopolization, as well as mergers that impede competition. Its ultimate goal is to protect a competitive process in the market and ensure the welfare of society as a whole. The increasing number of competition regimes over the last 30 years has demonstrated the importance of effective competition law and policy, particularly in developing countries, and the globalization of competition regimes can be observed through the adoption of foreign approaches, such as economic analysis or principles. This has resulted in a significant level of global competition law convergence.Footnote 1
In addition, the development of competition regimes in developing countries indicates a move towards the achievement of diverse socio-political goals. In particular, the various purposes of competition law and policy often lead to the assertion of economic democracy, implying the protection of individual economic freedom by prohibiting anti-competitive practices.Footnote 2 Therefore, the lexicons of globalization of the market and competition regime, and the convergence of competition laws and socio-political objectives in the developing world comprehensively illustrate the stages of competition law development. In other words, developing countries have applied general competition norms from the western world, mixed with their own localized socio-economic aims.
First, the appropriate implementation of competition law is one of the central elements in the globalization of national economies. For example, boycott cartels or refusals to deal by domestic firms holding a market-dominant position can be used as barriers to market entry that impede the introduction of competition from foreign companies. Therefore, vigorous competition law enforcement is often understood as a prerequisite for free international trade.Footnote 3 When a country accommodates free trade, more discussion about the implementation of competition law is therefore necessary.Footnote 4
Secondly, demonstrating the importance of competition law, more than 130 countries have adopted competition laws or similar regulatory frameworks.Footnote 5 Despite the different cultural, economic and legal backgrounds across regions,Footnote 6 it appears that competition regimes around the world have become increasingly more harmonized than in the past, thus avoiding conflict as a result of dissimilar approaches. In particular, the convergence of competition laws helps to prevent discriminatory enforcement against multinational undertakings. Moreover, learning foreign legal techniques and approaches in public enforcement has enhanced the progress of localized harmonization.
Thirdly, despite the increasing importance of the convergence of competition laws, there is notable divergence between competition regimes due to countries’ distinctive social norms and different historical backgrounds. Critically, a large number of developing countries have experienced economic concentration by private entities, which often makes people demand the dispersal of private economic powers. For example, the negative reaction among Egyptians to economic power in certain sectors like the steel industry has revealed their concerns about the threat economic power poses to the country's democratic process.Footnote 7 This was also related to the issue of the independence of the competition authority.Footnote 8 The idea of improving individual economic freedom by prohibiting abuse or misuse by a monopolist thus appears to be important in developing countries. Moreover, demands for economic reform often accompany the process of overall democratic reform. Therefore, the development of competition law involves a certain vocabulary, including the globalization of markets and competition regimes, the convergence of substantive rules and the emergence of socio-political objectives regarding economic freedom for democracy.Footnote 9
Given the importance of socio-political goals in competition law, it is necessary to discuss the development of competition policy from a comparative perspective. The early concepts of modern competition law and policy were developed in western competition regimes, such as those of the USA and the European Union (EU).Footnote 10 In recent years, there has also been notable progress in developing countries, which has been modelled on the substantive competition provisions of the aforementioned western regimes. The fledgling competition regimes have established competition policies that can fit into their backgrounds by mixing their own legal and social systems with the competition frameworks of other countries.Footnote 11 Therefore, the historical development of each competition regime has taken a unique shape that is often different from that of other regimes.
For example, a number of competition regimes in Asia, such as those in Korea and Japan, have highlighted their own socio-economic-political goals, which are related to the idea of fairness in competition,Footnote 12 mainly to resolve the problem of economic concentration.Footnote 13 In these countries, people often believe that the dissolution of private economic power is vital to achieving the objective of economic democracy, therefore protecting individual economic freedom. Similarly, competition laws and policies in Islamic countries, especially in Africa, have revealed their own characteristics that are different from those of other systems.Footnote 14 In particular, private economic power often involves political power, prompting concern regarding harm to economic and democratic progress, as shown in Egypt's steel industry.Footnote 15
In particular, Egypt was one of Africa's early adopters of competition policy and has recently shown its enthusiasm for the vigorous enforcement of competition law.Footnote 16 Its socio-political and economic developments are also testament to the possibilities for dramatic transformation relating to competition policy.Footnote 17 In addition to the adoption of foreign ideas, the issue of socio-economic aims has also become central to the Egyptian competition regime, possibly as a result of public demand or political reasoning. Moreover, the democratization movement in Egypt made the government determined to protect a competitive process that improves social and economic welfare, reflecting modern ideas of allocative efficiency, while admitting the influence of some traditional thoughts on competition culture.
In the developing world, public enforcement of competition law has been regarded as an important means through which to protect the democratic process by protecting consumers and weaker trading parties.Footnote 18 In particular, competition law reforms often reflect government policy as they aim to promote economic democracy.Footnote 19 For instance, Egypt produced a comprehensive policy on economic reform in 1991, which included market structure reforms. The purpose of this policy was to transform the state economy into a more market-based one to attract direct foreign investment. The government attempted not to intervene in the price mechanisms of the market, and Egyptian economic policy had emphasized the role of the private sector since the 1990s.Footnote 20 Because such liberalization could lead to potential abuse by large companies, Egypt enacted competition laws in an effort to improve a liberalized market economy without distorting competition by monopolies.Footnote 21 Therefore, protecting small businesses and consumers from economic concentration in a liberalized market became one of the tasks of the Egyptian competition regime.Footnote 22
Overall, the increasing number of competition cases since 2015 demonstrates constant improvement in the Egyptian competition regime;Footnote 23 the context of the decisions by the Egyptian Competition Authority (ECA) explains the shift from simple cartel cases to cases of complex abuse of market dominance in certain sectors, such as telecommunications and broadcasting.Footnote 24 This improvement highlights Egypt's modernization efforts because it explains that the ECA is investigating various anti-competitive practices and vigorously enforcing competition law. In addition, the publication of ECA decisions on competition law violations has helped to improve a competition culture in society by educating the public on the consequences of infringing the law.
Features of the Egyptian competition regime can be observed elsewhere in the developing world because many competition regimes have had a similar experience. The recent enforcement of Egyptian competition law may also offer inspiration for other African countries that have had analogous issues relating to the development of competition law. By considering various issues in fledgling competition regimes, this article aims to discuss the development of competition law and policy in Egypt and stresses its modernization after the Arab Spring; competition law appears critical to accomplishing the goals of democratic and economic reform in Egypt.
This article is in two main substantive sections. The first describes the initial position of Egyptian competition law and reforms through effective public enforcement. This section explains the foundation of Egyptian competition policy, focusing on the objectives of the law from both a traditional and cultural perspective. The second section discusses reforms to the Egyptian competition regime and further amendments that have yet to be made. This section explores the development of notable case law and suggests a proposal for modernizing the law's substantive provisions.
FOUNDATION OF COMPETITION LAW AND POLICY IN EGYPT
Objectives and values of competition law from a cultural perspective
Historical background to competition culture in the Middle Eastern region
Several African countries, including Egypt, have an Islamic legal systemFootnote 25 that centres on traditional values, and this has led them to adopt unique approaches to competition culture. In other words, a characteristic Islamic tradition has established a particular legal culture throughout north-eastern Africa. One of the most significant problems in Africa, including Egypt, is the disparity of wealth and the accompanying poverty. Hence, the inequality of wealth and distinctive socio-political demands have affected the foundation of state-led economic and competition policy in this region. Consequently, like other African countries, Egypt has confronted how to balance ensuring efficient market competition (or the free market)Footnote 26 and protecting the disadvantaged in transactions,Footnote 27 which is not an easy task. In reality, the influence of religious traditions relating to competition has gradually reduced; however, it is necessary to discuss the general features of a number of Islamic concepts because certain characteristics or values in a society may have a substantial effect on the development of its competition culture.
It is first necessary to discuss several sources that influence Islamic culture, such as the Quran. The Quran requires both states and the public to establish economic justice and fairness by prohibiting the economic exploitation of private entities. Islamic regimes, therefore, favour bans on the abuse of economic power, implying a priority for social justice.Footnote 28 In the context of competition and market regulation, the principle of Hisbah Footnote 29 may have contributed to the concept of market intervention as a cultural foundation. The Hisbah principle refers to “accountability” from a religious perspective; it often means that a Muslim should intervene in private matters and bring action against an individual who has committed a wrongful act, including involving commercial activity. It seems that Egypt has limited the scope of the Hisbah principleFootnote 30 and the idea has narrowed in modern Egyptian society. The Hisbah structure has continued in the wider Islamic region, but was abolished in Egypt in 1819.Footnote 31 Although its substantive features were repealed, this tradition has been the foundation of the cultivation of traditional approaches to anti-competitive practices, especially relating to the abuse of market dominance.
It appears that Hisbah has influenced not only ideas regarding the prevention of unfair commercial practices but also the founding principles of social equality and anti-discrimination,Footnote 32 which are often crucial in the early stages of competition regimes. The Hisbah ideology was formerly implemented to monitor the fairness of businesses, focusing on downstream levels or the distribution of goods.Footnote 33 One may argue that Hisbah does not accommodate modern competition law and policy; however, it may have affected the enhancement of social welfare by preventing private monopolization, which is a distinctive feature of the competition regime.
Modern competition law in Egypt: A focus on market economy
The foundation of the Egyptian competition regime is the Egyptian Constitution of 2012. Article 27 of the amended constitution, added in 2014, sets out the basic principles that must underlie the economic system. This article states that “[t]he economic system is committed to the criteria of transparency and governance, supporting competitiveness … achieving balanced growth; preventing monopolistic practices …; and achieving balance between the interests of different parties … to protect consumers”. The provision further emphasizes the value of balanced growth by stating that “[t]he economic system is socially committed to ensuring equal opportunities and a fair distribution”, which confirms its aim of redistributing wealth.
In light of this founding guidance, the ECA also published a paper regarding its general competition policy. This paper reflects the ECA's views about the ultimate goal of competition law. The ECA emphasizes that the Egyptian competition regime aims to ensure economic freedom and to promote the competitive process through the effective enforcement of the Egyptian Competition Law that was formally adopted in 2005 (the Act)Footnote 34 and improvements in Egypt's competition culture.Footnote 35 Moreover, the ECA explained that government policy had shifted towards liberalization and a free market economy, requiring competition legislation. Accordingly, article 1 of the Act articulates that economic or business practices should not prevent, restrict, or harm “the freedom of competition”, which is the ultimate objective of the Egyptian competition regime. The ECA's policy guidance also aims to achieve the goal of free competition by implementing general competition law approaches, as set out below.Footnote 36
First, the ECA primarily focuses on market studies and the vigorous enforcement of its three substantive provisions regarding anti-competitive agreements at both horizontal and vertical levels, as well as tackling abuses of a market-dominant position through ex officio investigations and complaints. It also aims to establish a system to collect comprehensive information about economic activities in the various sectors and industries.Footnote 37 Secondly, the ECA considers the importance of a competition culture and cooperation with other government authorities for meaningful coordination.Footnote 38 Thirdly, it scrutinizes the quality of the agencies, such as their training, enforcement systems and the transparency of their enforcement.Footnote 39 Fourthly, it acknowledges the significance of cooperating with competition authorities in other countries and considers effective extraterritorial applications of the Act,Footnote 40 including coordination with international organizations.Footnote 41
According to the ECA's policy paper, the ECA's priority is to generate a competitive environment that is the foundation of a free market. In addition, the paper clarifies the ECA's policy of cooperating closely with other governmental bodies that deal with policies relating to consumer protection. Furthermore, it announced that the ECA's competition policy will develop according to the demands of current and future policy in Egypt. Therefore, it considers each stage of the state's policy for economic development on an annual basis.Footnote 42 The ECA policy paper indicates its adoption of general principles for competition law advocacy; one of the ECA's main concerns is to establish a competition culture that improves the public's awareness of competition law enforcement and its coordination with other authorities.Footnote 43
In the initial stage of Egyptian competition law development, the ECA focused on the implementation of its substantive provisions and the improvement of competition culture, rather than on other political issues. Interestingly, competition culture lies at the heart of competition policy in Egypt, which is very similar to the approach in other African countries.Footnote 44 The successful development of competition policy depends on whether it can be embedded in a vibrant competition culture in an individual jurisdiction. Therefore, Egyptian competition policymakers have given the impression that they are focusing on the progress of the culture, advancing beyond the old Hisbah principle towards a competition culture in the context of a market economy.
Important matters for development: Convergence and modernization
The substantive provisions of Egyptian competition law: A comparative perspective
The increasing process of integrating into the global economy, largely stemming from outside pressures from the International Monetary Fund and the World Bank,Footnote 45 has expedited the liberalization of Egypt's market and improved competition to attract direct foreign investment.Footnote 46 This may mean that the Egyptian competition regime has moved closer to western competition law systems.Footnote 47 Remarkably, similar to the position in many developing Asian countries, Egyptian competition law and policy appear to have strong connections to those in Europe. This is shown through Egypt's intimate cooperation with the European authoritiesFootnote 48 following the EU–Egypt Association Agreement, which created an EU-style competition framework.Footnote 49
The substantive provisions of the Egyptian competition law are as follows. Articles 6 and 7 of the Act prohibit anti-competitive agreements between competitors, and between suppliers and distributers, respectively;Footnote 50 and article 8 proscribes abuse of a market-dominant position. Together, these three articles provide a non-exhaustive list of prohibited practices.Footnote 51 Article 3 determines how relevant markets must be defined; and article 4 describes when firms in a market will be presumed to have market dominance. Therefore, article 4 provides an unambiguous test of the market share-based presumption of market dominance, establishing a threshold of 25 per cent, which is similar to, but not exactly the same as, that in the competition law provisions of many Asian countries. According to article 4, an undertaking that holds a market share exceeding 25 per cent can be presumed to affect prices and supply in the market, and must thus bear more responsibility than smaller firms do. Article 19 also provides for merger control.Footnote 52
In effect, provisions that contain presumptions of market dominance are popular in developing competition regimes, particularly in Asia. For instance, most Asian countries, including Korea and China, provide crystal clear presumption thresholds, which are often crucial to the predictability of effective enforcement. If there is a presumption of market dominance based on market share and an undertaking's market share exceeds this threshold, it must be careful in executing its business strategy to avoid violating competition laws. Unlike the regimes in the US and the EU, newly adopted competition regimes do not normally have a long history of case law to provide guidance regarding the market dominance presumption. Therefore, these statutory provisions enhance the predictability of the rule regarding the abuse of market dominance. Clear guidance is also critical when avoiding enforcement agencies’ discretion, which may be biased due to politics or corruption.Footnote 53 To conclude, Egypt, like many other jurisdictions, makes use of a strong presumption method and indicates its acceptance of a general competition law framework that is widely used in other developing countries.
Globalization efforts and cooperation strategies
To improve overall competition policy, the ECA also stresses cooperation with agencies in other countries as well as international organizations. It currently co-operates with regional trade organizations such as the Common Market for Eastern and Southern Africa (COMESA).Footnote 54 In particular, unlike the US and the EU, most developing countries lack experience of extraterritorial applications. However, recent ECA efforts illustrate its interest in coordinating with international regimes to ensure effective extraterritorial application of the law against the anti-competitive practices of multinational enterprises, as shown in a recent case involving the media sector.Footnote 55 For example, the ECA decision against the Confederation of African Football, regarding its abuse of market dominance relating to exclusive broadcasting rights, prompted the COMESA Competition Commission to investigate the case in cooperation with the ECA.Footnote 56
In particular, the global convergence of competition laws influences the degree of effective cooperation between competition authorities. For instance, the transplantation of substantive competition provisions is not new in Africa. Egypt is a member of COMESA, whose treaty includes a competition section. Article 55 of the treaty, which contains language inspired by the EU, addresses the competition issues of anti-competitive agreements. Article 55(1) states the aim of the competition section, which is to prevent “any practice which negates the objective of free and liberalised trade”. It further proscribes anti-competitive practices, such as agreements between undertakings, decisions by business associations, and concerted practices that have, as their object or effect, the prevention of competition. Furthermore, article 55(2) provides individual exemptions where the undertakings satisfy some conditions (such as production and distribution improvements, or technical or economic promotions to ensure fairness for consumers), unless the practice in question imposes restrictions that are inconsistent with the treaty's objectives or have the effect of eliminating competition.
The overall structure of COMESA's competition provision seems to be modelled on the European competition provision on anti-competitive agreements: article 101 of the Treaty on the Functioning of the European Union.Footnote 57 Foreign regimes have therefore affected the design of the competition regulatory framework. This enables the ECA to adopt approaches that are often similar to those in article 101, which may affect the convergence process.
EGYPTIAN COMPETITION LAW AND POLICY AFTER THE ARAB SPRING
The role of competition policy in the market economy
Political economy of competition law: The role of political and public support
The objectives of competition law play an important role in the development of a competition regime. Competition laws in many developing countries provide a wide range of goals, thereby ensuring the broad discretion of the competition authority. One of the major reasons for the popularity of socio-political goals in fledgling competition regimes is public support for the protection of public interests.Footnote 58 In some countries, the redistribution of wealth, rather than efficiency, is often the crucial purpose behind protecting the public interest. This approach is often linked with democratization, which implies strengthening the rule of law in economic activities. This seems inevitable in countries where the disparity of wealth is significant. Some have argued that one of the main aims of competition law is to support the progress of “democratic transition and stability” by addressing private concentrations with low import penetrations.Footnote 59 This is the current situation in Egypt following the Arab Spring.
Some commentators have argued that there are several factors influencing the development of competition regimes around the globe through evolutionary amendments, such as political and economic changes. These changes may also include various elements, such as changes in global and domestic markets and political leadership.Footnote 60 Egypt has experienced radical socio-political and economic changes, including in its political leadership after the Arab Spring, which have required a further evolution of its competition regime. Moreover, as discussed above, efficiency is important for developing economies, as developing countries with small economies often cannot sacrifice economic efficiency in favour of broader economic policy goals.Footnote 61 Therefore, the Egyptian competition regime that has experienced democratization must consider an appropriate balance of various objectives and economic efficiency.
Case law that reflects recent decisions
The recent development of Egyptian cases, especially after the Arab Spring, indicates possible future progress.Footnote 62 In particular, there were a substantial number of cartel investigations in the early 2000s, such as those in the meat, glucose, corn starch and mobile telecommunications markets,Footnote 63 which were later determined to violate article 6 of the Act. Following these cartel cases, especially after early 2013, the ECA began to focus on the abuse of market dominance. Although it later dropped most of the cases, the ECA initiated numerous important investigations into the abuse of a market-dominant position. For example, it examined several industries and sectors, including airlines and internet services.Footnote 64
Based on its experience in these investigations, the ECA has recently made decisions regarding abuses of market dominance in areas of the new economy, such as telecommunications and broadcasting. It received complaints about the abusive practices of Telecom Egypt in 2014 and decided that the company had infringed article 8 of the Act through its discriminatory treatment and anti-competitive tying conduct, which had harmed its rivals at the downstream level; the ECA concluded that this conduct had impeded competition in the market. Furthermore, the ECA provided a decision paper exceeding 50 pages that revealed its thorough investigation of the case relating to telecommunications and networks. The ECA confirmed that discrimination against the firm's rivals was in breach of article 8 of the Act, and so it notified the Prosecutor's Office and subsequently issued administrative orders.Footnote 65 This experience of investigations led to more vigorous enforcement against foreign companies.
In 2017, the ECA also announced that it had issued a decision regarding two administrative orders against a large undertaking, Qatar's beIN Sports (beIN). The ECA asserted that beIN, a sports channel company with exclusive broadcasting rights for football championships, had infringed the competition rule regarding abuse of market dominance. One interesting aspect of the language used in the announcement was that a market-dominant undertaking has a duty of “special responsibility”, which may originate from European competition law.Footnote 66 In this case, the ECA affirmed that the administrative orders aimed to ensure wider choice for consumers. The ECA further stated that it would continue to ensure the company's full compliance with the Act, thereby eliminating its abuse of market dominance by participating in the prosecutors’ investigations and providing technical support to the authorities of neighbouring countries upon request.Footnote 67
In January 2018, the Economic Criminal Court of Cairo issued a judgment imposing a fine of EGP 400 million (equivalent to USD 22 million) on beIN for violating article 8(d) and (g) of the Act. This decision upheld the ECA's sanctions on a foreign undertaking.Footnote 68 With regard to the case, the ECA asserted that beIN's abuses of market dominance not only impeded competition in the market but also harmed consumer welfare.Footnote 69 Several approaches to abuses of market dominance in Egypt can be seen by looking at these recent cases.
First, the ECA focused on imposing the concept of special responsibility on a market-dominant undertaking. The notion of special responsibility is often related to fairness, meaning that social values may be more important than economic efficiency. Secondly, the ECA appears to have emphasized the importance of coordinating with prosecutors and competition authorities in other jurisdictions. Effective cooperation with the Prosecutor's Office is imperative to preventing hardcore practices, and it may improve the competition culture through announcements about cases in the daily newspapers. In addition, when an undertaking's abusive conduct affects multiple competition jurisdictions, it is necessary to coordinate with the authorities concerned with the harm stemming from the practices. Thirdly, the beIN case confirmed that the ECA does indeed apply the Act to foreign companies under the principle of extraterritorial application.Footnote 70 This can help the ECA to improve public enforcement against violators from other countries.
To conclude, the early development of competition enforcement in Egypt demonstrates its focus on the implementation of basic substantive provisions such as the cartel rule. For example, the ECA provided a variety of economic evidence to prove the existence of a hardcore cartel in the cement market, relating to price-fixing and output restrictions by using its leniency programme.Footnote 71 Thereafter, it became concerned with more complex cases involving telecommunications and the media, which require economic studies and the examination of foreign examples.
Modernization of competition law: Not one-size-fits-all, but a tailored framework
Some discussions for competition law development
The formulation of competition law and policy is crucial to economic development. Although each country has a different background, most competition regimes have displayed converging views on the value of the competitive process. Therefore, although Egyptian competition policymakers adopted globally standardized frameworks, they had to adapt them to suit local circumstances.Footnote 72 In other words, the existing substantive provisions of the Act indicated the acceptance of globally popular general frameworks, while the implementation of special responsibility in the beIN case highlights its localized competition norm within a foreign example.
There are some issues that most competition regimes in developing countries, including Egypt, should address. Most of all, improving the competition culture is the foundation of effective enforcement. Thus, the role of the competition authorities regarding public enforcement is critical when improving the competition culture. The example of Korea may give some ideas for the progress of the competition culture in developing countries.Footnote 73 One of the major themes in Korea relating to the concept of economic democratization is the elimination of a high degree of economic concentration by a few large conglomerates, which has often triggered debate about rigorous economic control over private economic entities. It also stimulates public demand for active public enforcement, which results in a heavy volume of cases and effective extraterritorial application of the law. This background has enhanced the competition culture in Korea; in short, vigorous public enforcement is one of the essential elements facilitating effective implementation of the law.Footnote 74 At the centre of Korea's modern and vigorous competition law lies a provision against unfair business practices. Interestingly, this provision bears more than a passing resemblance to the old rules on fair trade under Hisbah.Footnote 75 This indicates that many countries share the common goal of fair trade and free competition that influences a competition culture. Therefore, Egyptian competition policymakers need to consider improving the competition culture through vigorous public enforcement. Recent cases in Egypt demonstrate rapid development; however, to improve public enforcement and transparency in investigation,Footnote 76 the ECA needs to employ more staff. The current number of staff is insufficient for effective enforcement, considering the size of the Egyptian market.
Proposals for further modernization
There is no global standard of competition law that is applicable to all jurisdictions. It is impossible to have a one-size-fits-all competition law framework because of the diversity among countries. Therefore, every country should adapt its competition rules to its local circumstances and background. In other words, a tailored competition law framework may improve the situation of a specific regime. This may eventually require amendments to the legislative framework. Once the competition regime has improved its enforcement and competition culture, it may require further amendments; proposals for development are suggested below.
First, it is necessary to consider an amendment to the presumption threshold of 25 per cent in article 4 of the Act. This threshold is very low and may hamper competition and innovation in situations in which the ECA imposes onerous responsibilities on undertakings. Some have argued that the ECA has often been unwilling to determine a market-dominant position based on this threshold.Footnote 77 Nevertheless, this standard may yet impose burdens on undertakings. When a firm's market share reaches 25 per cent, it should consider a possible violation of the Act. Rebuttable presumption standards of 50 per cent for a single undertaking can easily be found in the EU and Asia, although they usually include other supplementary concentration ratio provisions.Footnote 78 There is no universal guidance regarding the market dominance presumption, but EU and Asian countries have established 40–50 per cent thresholds for market dominance, which may be relevant for the Egyptian competition regime.Footnote 79 In effect, there were concerns about the low market share threshold when the Act was being drafted.Footnote 80 It is, therefore, time to consider amending the existing presumption; the 25 per cent threshold may generate problematic false positives or Type I errors, which refer to over-enforcement against harmless conduct,Footnote 81 because the threshold is the essential screen for abuse of market dominance, which gives an impression of possible enforcement against a large number of companies.
Secondly, unlike Egyptian competition law, most competition regimes do not include a separate rule for vertical agreements.Footnote 82 Recently, the distinction between horizontal and vertical agreements has become blurred after mixed agreements rose in popularity. Therefore, Egyptian policymakers should examine whether the existing regulatory framework generates confusion for undertakings. In particular, US case law has accepted the efficiency rationale that treats vertical agreements differently from horizontal ones, considering the benefits of improving inter-brand competition by sacrificing intra-brand competition.Footnote 83 It seems that most competition regimes have embraced the arguments for inter-brand competition without providing a separate rule for vertical agreements. Although the ECA recognizes the economic considerations of vertical restraints,Footnote 84 it does not seem to consider efficiency and inter-brand competition in vertical cases. Therefore, the Egyptian competition regime should consider the development of case law categorizing hardcore and non-hardcore agreements, rather than maintaining articles 6 and 7 of the Act for their classification.
Over the last decade, the Egyptian competition regime has experienced the first stage of development: that is, the general design of its competition policy and a focus on basic cases, such as hardcore price-fixing cartels and abuses of market dominance. It is now time for Egypt to move forward to global standards that provide a reasonable threshold of market dominance and a single provision to encompass both horizontal and vertical agreements.
CONCLUDING REMARKS
In our modern society, the functioning of competition law mechanisms has become one of the essential features of a democratic state; protecting individual economic freedoms from the abuses or misuses of large conglomerates improves economic democracy. This notion has influenced the modernization of Egyptian competition law and policy on the dispersions of economic power, as shown in certain cases, such as the steelFootnote 85 and media sectors.Footnote 86 Furthermore, there has been a notable improvement in the ECA's use of its powers in light of its independence and sanctions on violators.Footnote 87 In particular, Egypt has experienced many changes that indicate its transformation towards liberalization. One of the crucial demands of the Egyptian public is a fair society for economic activities. Therefore, Egypt needs to identify economic democratization based on both internal and external factors,Footnote 88 mixed with Egypt's own cultural elements.Footnote 89 Consequently, ensuring economic order through improving competition law enforcement and the competition culture in Egyptian society can lead to the development of a competitive process.
The Arab Spring in Egypt also played an important role in this development, and it is now necessary to identify the roles and objectives of the Egyptian competition regime. In particular, the transition of the state economy is closely related to the development of competition policy. Moreover, in Islamic countries, the concentration of economic power and wealth seems to be regarded as a phenomenon that undermines public interests.Footnote 90 Therefore, the tailored approach, which adapts popular global standards while simultaneously incorporating its own circumstances, may improve the competitive environment in Egypt.
Lastly, both convergence and localization are significant from a global competition law perspective. Convergence is crucial to avoid possible competition law conflicts, such as discriminatory enforcement against foreign undertakings, and localization is important to satisfy public demands in certain circumstances, for example when there are strong socio-political factors in the market. In effect, it is not easy to create a one-size-fits-all standard for developing competition regimes in practice, although each regime is reluctant to create a unique framework ill-suited to global convergence.Footnote 91 Therefore, localized harmonization should be the focal point for Egypt's development; an appropriate balance between convergence and localization is thus crucial. To conclude, the development of competition law in Egypt should be in line with democratization, and improving the competition culture needs to be part of Egypt's democratic revolution.
CONFLICTS OF INTEREST
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