Q&A: Competition 2024 – Bahrain

Q&A: Competition 2024 – Bahrain

1. What is the name of the main regulator/ regulators governing competition in Bahrain?

The Promotion and Protection of Competition Law No. 31 of 2018 (the “Competition Law”) states that a public authority for the promotion and protection of competition in Bahrain must be established (the “Authority”). The Authority shall have juridical personality with financial and administrative independence and is subject to the oversight of the Minister of Industry and Commerce.

As of today, the Authority is yet to be formed. Therefore, the Consumer Protection Directorate of the Ministry of Industry and Commerce is currently acting in its place until the Authority is formed.

2. What is market concentration under the Competition Law?

Market concentration occurs when there is a shift in the market that is attributed to several undertakings made by a company. The circumstances where market concentration is established are any (i) mergers, whether fully or partially, of two or more previously independent companies, (ii) acquisitions which leads to direct or indirect control of another company, whether fully or partially, or (iii) the establishment of a joint venture that undertakes all duties of a single independent company. In relation to acquisitions that establish market concentration, such transactions may be taken between companies, or an individual and a company.

3. What is a dominant market position under the Competition Law?

Companies may be deemed to have a dominant position in the market position due to their economic presence and strength, whereby such dominance may enable the company to prevent effective competition. Abuse of its position in the market may directly or indirectly hinder the other players in the market, such as competitors and even consumers. Therefore, the Competition Law regulates companies who have dominant positions in the market and sets out prohibitions to ensure fair competition.

4. What are the prohibitions under the Competition Law?

A company with a dominant position in the market cannot act or refrain from acting in a manner that constitutes an abuse of its dominant position. The following actions or inactions taken individually by the company or collectively with other companies are prohibited under the Competition Law:

1. 1. to directly or indirectly impose selling or purchasing prices, or any other trade conditions;
   2. to limit, production, markets, or technical development, to an extent that is detrimental to consumers;
   3. to apply dissimilar conditions with respect to prices, quality of products, and other terms of business, in any type of contracts and agreements concluded with consumers or suppliers of equivalent legal positions;
   4. to conclude contracts relating to certain products that are subject to the acceptance of obligations which, by nature or commercial usage, have no link to the subject of the original contract, agreement, or transaction; or
   5. to refrain, with no legitimate reasoning, from (i) concluding purchase or sale contracts of any products with any company, (ii) selling of products at a price lower than its actual cost, or (iii) to completely suspend a transaction to eliminate competing companies from continuing their business.