Merger Control 2023 Comparisons

The key merger control legislation in Qatar is:

• Law No 19 of 2006 Concerning the Protection of Competition and the Prevention of Monopoly Practices (“Competition Law”); and
• Ministry Resolution No 61 of 2008 implements Executive Regulations of Law No 19 of 2006 Concerning the Protection of Competition and the Prevention of Monopoly Practices (“Executive Regulations”).

Relevant legislation includes:

• Law No 13 of 2000 and its amendments – Qatar’s investment law regulating the investment of non-Qatari capital in economic activities;
• Qatar Law No 1 of 2019 on Foreign Direct Investment, now allows complete foreign ownership of a Qatari entity in any economic sector subject to the approval of the competent department. Qatar Law No 13 of 2000, by contrast, allowed for complete foreign ownership only in specific sectors and subject to approval from the Minister of Economy and Commerce;
• Qatar Financial Market Authority (QFMA) Regulations, QFMA Law No 8 of 2012 as amended by Law No 22 of 2018 and QFMA Offering and Listing of Securities on the Financial Markets Rulebook (“Securities Rulebook”) of 2021, and the Qatar Central Bank (QCB) Law No 13 of 2002 may include certain requirements (depending on the transaction activity) that must be complied with, and the Qatar Stock Exchange (QSE) is also involved on listed companies’ level of reviewing and supervision; and
• Commercial Companies Law No 11 of 2015 as amended by Law No 8 of 2021.

Protect Competition and Prevent Monopolistic Practices’ Committee (the “Committee”). The Committee includes the following members:

• a private sector representative who is nominated as president by the Minister of Economy and Commerce;
• two representatives of the Ministry of Economy and Commerce, among whom one is named as vice president;
• a representative of the Energy and Industry Ministry;
• a representative of the Finance Ministry;
• a representative of the Ministry of Justice;
• a representative of QCB;
• a representative of the General Authority of Customs and Ports; and
• two experts nominated by the Minister of Economy and Commerce.

Notification is compulsory for all transactions within the Scope of the Competition Law and Executive Regulations.

Any violation of the Competition Law will be penalised by a fine of no less than QAR100,000 and no more than QAR5 million.

The Competition Law applies to the following transactions:

• persons intending to possess assets, ownership rights or usufructs;
• persons intending to buy stocks; and
• persons intending to create consortiums, mergers, or combine the management of two ‒ or more ‒ corporate persons in a way that leads to domination in the market.

The Competition Law exempts state actions and institutions under the supervision of the state. The Minister has the right to exempt agreements that promote consumers’ welfare. 

The Committee has the right to exclude any mergers or acquisitions deemed by it to contribute to economic development in a way that may compensate for the prejudice to competition.

“Domination” is used synonymously with “control”, which is defined as “the ability of a person, or group of persons working together, to control the market of products in order to affect prices or quantities without competitors having the ability to limit such effect”. Control under Qatari Laws is broadly equivalent to holding a dominant position. However, there are no exact or accurate metrics that have been provided under Article 10 of the Competition Law.

The Competition Law and Executive Regulations apply to all violations that influence the local Qatar market, including violations committed by institutions based outside Qatar. Further, the Competition Law and Executive Regulations apply to all activities (undertaken by factories, institutions, and companies) across all economic sectors (industrial, commercial, agricultural, or services) in violation of the same and which influence the Qatar market.

As of today, there are no exact jurisdictional thresholds identified by the Competition Law, the Executive Regulations, or any Committee decisions.

Jurisdictional thresholds are, as a matter of practice, denoted and determined in accordance with the Qatar Competition Regulator on a case-by-case basis, and the authority shall take into consideration the potential impact of a particular transaction on an “individual basis”.

Since there are no established jurisdictional thresholds, there are no methods for calculating said jurisdictional thresholds. The jurisdictional thresholds are based on the Committee’s subjective analysis of how a specific transaction can affect the Qatar market on a case-by-case basis. The Executive Regulations identify four elements for the Committee to take into consideration in its threshold analysis:

• the effect of such agreement or contract on free competition in the market;
• the benefits derived by the consumer from such agreement or contract;
• the considerations of maintaining the quality of the product and the security and safety requirements so as not to adversely affect competition; and
• the extent of compatibility between the conditions of such agreement or contract and the established commercial practices of the activity, the subject matter of such test.

Unfortunately, many of these issues are not entirely clear in the Competition Law or Executive Regulations. Our understanding of the Competition Law and Executive Regulations is that the Committee has very wide discretion in its analysis. The Executive Regulations provide elements for the Committee to consider but do not limit the Committee to those elements.

Foreign-to-foreign transactions are subject to merger control if they influence the Qatar market – as previously mentioned under 2.5 Jurisdictional Thresholds.

Foreign-to-foreign transactions are subject to merger control if they have an influence on the Qatar market – as previously mentioned under 2.5 Jurisdictional Thresholds.

Joint ventures are captured within the transactions subject to the Competition Law. Joint ventures are not expressly listed as a type of transaction; however, the creation of “consortiums or mergers or to combine the management of two or more corporate persons” is listed. As such, we can comfortably say that joint ventures are subject to the Competition Law and Executive regulations. With that being said, there are no special rules for determining whether joint ventures meet the jurisdictional threshold.

Since there are no clear jurisdictional thresholds for the implementation of the Competition Law and Executive Regulations, the Committee has wide discretion in investigating transactions that appear on its radar. Initially, any person can file a notice to the Committee identifying a specific transaction as potentially problematic. The Committee then has 90 days from the date of receipt of the notice to conduct its investigation and issue a resolution with its decision. 

The Committee, as well as the employees of the Ministry of Economy and Commerce, authorised to act in the capacity of judicial officers by a resolution issued by the public prosecutor, shall have the right to detect and confirm the crimes committed in violation of the provisions of the Competition Law. For such purpose, they shall have the right to enter places, shops, and establishments where the violator practices the activity, inspect such locations, and review the documents and registers thereof.

Implementation may not lawfully proceed before an approval is issued through a Committee resolution or the lapse of 90 days from receipt of the notice without the issuance of a Committee resolution.

Implementation of a transaction prior to receiving clearance from the Committee results in a violation of the Competition Law and the Executive Regulations. The violation can lead to a penalty of anywhere between QAR100,000 and QAR5 million. Further, the person in charge of the actual management of the violating corporate person shall be penalised by the same penalties prescribed for the actions committed in violation of the provisions of the Competition Law and Executive Regulations if it is proven that they had knowledge of said violation and if the prejudice thereby to such obligations imposed on them by such management has contributed to the occurrence of such crime.

In all cases, the court deciding on the violation shall confiscate all profits resulting from activities if it finds a violation of the provisions of the Competition Law.

Besides a special resolution from the Minister of Economy and Commerce, in response to a formal request, excluding a transaction from the scope of the Competition Law and Executive Regulations, there are no other exceptions to the suspensive effect.

With the exception of our response to 2.14 Exceptions to Suspensive Effect, there are no express circumstances that would allow a corporate person to implement a transaction prior to clearance received from the Committee. It is in fact prohibited to complete the transaction prior to the clearance decision or the lapse of the review period prescribed under the Competition Law. If there is no communication issued or exchanged within 90 days, the application shall be deemed as “cleared”.

Technically, there is no express deadline for notification to be made to the committee under the Competition Law or Executive Regulations. However, a transaction may not be implemented without clearance from the Committee as it would result in a violation of the Competition Law and Executive Regulations.

The Competition Law does not require a binding agreement to be in place prior to notification. There is no standard as to when notification can be made, and we encourage parties who feel that their transaction may fall within the scope of the Competition Law to provide notice of the same at the earliest time possible, to receive clearance and avoid delays in the transaction.

There are no filing fees associated with the notice made to the Committee.

Neither party is expressly responsible for filing the notice with the Committee. Any party may report to the Committee any violation of the provisions of the Competition Law or Executive Regulations. As for the obligation to notify, it is on all concerned parties to the economic concentration.

The requirements are as follows:

• the name, address, job and capacity of the reporter, and their interest in providing such a report;
• the name, address, and nature of the business of the reported person;
• the type of the violation and the evidence proving its occurrence; and
• a statement of the damage, if any, incurred by the reporter.

The report shall be accompanied by the supporting documents, if any. The Committee may ignore the investigation of any report not meeting the above particulars.

There is no indication that the above report must be made in a specific language. Nonetheless, we recommend submitting an Arabic translation and any accompanying document in the event that the report is submitted in a non-Arabic language.

In the event that the notice is considered incomplete, the Committee has the option of disregarding the notice and not taking any action.

At a minimum, the Committee would disregard the notice if the notifying party were deemed to have supplied inaccurate or misleading information. The Committee has wide discretion regarding imposing penalties or referring a matter to the judiciary. The Committee has the power to prohibit a transaction and take remedial steps to prevent the hindrance to competition and the Qatari market and impose penalties (Article 15). The Committee is allowed to cancel the approval granted if based on untrue or fraudulent misleading information provided by the parties (Article 12).

The process is initiated by an application made to the Minister of Economy and Commerce to exclude a certain transaction from the Competition Law and Executive Regulations. The Minister may refer the application to the Committee for consideration and preparation of a report. 

The Committee would then have 30 days from receiving the Minister’s referral, to prepare a report about such application, which can be extended for similar periods. The Committee would then present the final report to the Minister for a decision. 

The entire process may not exceed 90 days, or it would be deemed an implied clearance.

The Competition Law does not allow for pre-notification discussions with the authorities. The Committee encourages any institution planning to acquire assets, intellectual property rights, or shares, or planning to undergo mergers and acquisitions, that result in a dominant market position, to inform the committee of their decision in writing.

There is no limitation on what the Committee may request during its investigation. However, there is no indication that such requests will stop the clock for the 90-day timetable.

There are no short-form, fast-track, or other types of accelerated procedures for review by the Committee.

The substantive test is worded as follows: “Does the contemplated transaction influence the Qatar market in a way that causes prevention, hindrance, or damage to competition?” However, there is no clear information on the tests employed by the Competition Authority to evaluate effects existing or created due to the economic concentration.

Relevant markets are determined by the relevant products and the geographical area.

The expression “relevant products” shall mean all such products, each of which is considered as a substitute or can replace the other product from the point of view of the recipient of the service or product, including such products provided by the competitors in other markets in the vicinity of the consumer.

The expression “geographical area” shall mean such market that includes the geographical area where the competition circumstances are identical and where the sellers and the purchasers deal in products to determine the prices.

Where parties’ activities overlap, there is no de minimis level below which the competitive concerns are deemed unlikely. This decision would go back to the Committee’s subjective analysis on a case-by-case basis.

Unfortunately, at this stage, the Competition Law and Executive Regulations do not provide guidance on this issue. However, it is likely that case law would play a relatively small role in influencing the enforcement of the Competition Law.

The authorities will investigate the following competition concerns.

• Effects on the prices of products may be viewed through the following elements:
1. the share of such person in the relevant market and their position compared with the other competitors;
2. the acts of such person in the relevant market during the previous period;
3. the number of the competing persons in the relevant market and their relative effect on the structure of the market;
4. the extent of the ability of such person and its competitors to reach the required production materials; and
5. the presence of obstacles preventing the entry of other persons to the relevant market.
• Co-ordination or agreement among the competing persons.
• Vertical concerns and elimination of competition – it may not be agreed or contracted between a person and any of their suppliers or clients to the extent such agreement or contract may limit competition. Such issue is evaluated on the basis of the test made by the Committee for each case individually in the light of the following elements:
1. the effect of such agreement or contract on free competition in the market;
2. the benefits derived by the consumer from such agreement or contract;
3. the considerations of maintaining the quality of the product and the security and safety requirements so as not to adversely affect competition; and
4. the extent of compatibility between the conditions of such agreement or contract and the established commercial practices of the activity, the subject matter of such test.

The authorities do not expressly consider economic efficiencies. The Competition Law does, however, refer to economic benefit wherein it allows for a complete exemption in the cases of mergers and acquisitions deemed by the Committee to contribute to economic development in a way which may compensate for the prejudice to competition.

There are no formally approved additional considerations that the Committee may take into account where such considerations fall outside the scope of application of the Competition Law.

There are no special considerations in the substantive review of joint ventures. Co-ordination issues between joint-venture parents may be investigated if such issues influence the Qatar market competition.

When a violation is proven, the Committee shall issue a warning via registered letter to the person responsible for committing the violation, requiring them to comply with the Competition Law immediately or within a certain deadline.

If the person responsible for committing the violation fails to comply within the appointed deadline, the Committee refers the case to the Minister of Economy and Commerce, who, in turn, refers the case to the judiciary. 

The judiciary will then implement a financial penalty (QAR100,000–QAR5 million) and confiscate the profits accrued from the violating activity and other amounts the violator has collected by illegal competition.

The person in charge of the actual management of the violating corporate person shall be penalised by the same penalties prescribed for the actions committed in violation of the provisions of the Competition Law and Executive Regulations if it is proven that they had knowledge of said violation and if the prejudice thereby to such obligations imposed on them by such management has contributed to the occurrence of such crime.

There is no indication that the parties cannot negotiate with the Committee or provide alternative remedies to rectify a violation of the Competition Law. However, it is within the Committee’s scope of authority to accept or decline such alternative remedies.

There is no legal standard that remedies must meet to be deemed acceptable. They do, however, need to comply with the Committee′s instructions to remedy the violation.

Unfortunately, there is no reliable source of publicly available information on this issue.

Once a violation is confirmed by the Committee, a letter will be issued to the violator with the Committee′s instructions to remedy the violation. There is no indication of when the parties may negotiate remedies with the Committee.

Unfortunately, there is no reliable source of publicly available information on this issue.

A resolution may be issued by the Committee as a formal decision permitting or prohibiting a transaction. There is no evidence that indicates any decision made by the Committee has been made public.

Unfortunately, there is no reliable source of publicly available information on this issue.

Unfortunately, there is no reliable source of publicly available information on this issue. In the event it issues a conditional approval, the Committee will outline the conditions.

There are no express third-party rights under the Competition Law or the Executive Regulations. However, any party may report a potential violation with supporting documents to the Committee. There is no prohibition on a third party doing so and providing documents establishing the violation and impact of the violation on the Qatar market competition.

There is no public information concerning the Committee contacting third parties as part of its review process, however, there is no prohibition on the Committee seeking such information as it has wide discretion under the Competition Law and Executive Regulations to investigate a violation of the same.

Members of the Committee, employees, and Ministry delegates are prohibited from disclosing any information or data related to the work of the Committee or sources of information in previous cases and cases under review. It is prohibited to use any information, data, or sources of information for a purpose other than the intended submission purpose.

Part of the Committee’s express objectives is to liaise with counterpart committees in other countries to discuss issues of common interest. The information or data gathered as part of the Committee’s investigations may only be used for the intended purpose of the submission, and, as such, the Committee may not disclose said information to counterpart committees in other countries.

Violations of the Competition Law and Executive Regulations, if unremedied in compliance with the Committee’s directives, would ultimately be referred to the judiciary. A decision will be issued by the Court of First Instance, concerning the matter. A party may choose to appeal the decision to the Court of Appeals and ultimately to the Court of Cassation.

An appeal must be made within 30 days of the Court of First Instance’s decision.

Unfortunately, there is no reliable source of publicly available information on this issue.

There is no applicable information in this jurisdiction.

There have not been any recent changes to the legislation or implementing regulations. We anticipate some changes in the near future as the overwhelming trend in the region has become an active merger control department. The establishment of the De-monopolisation and Competition Protection Committee at the Ministry of Commerce and Industry, which has recently issued notices to large Qatari companies in relation to exclusivity and pricing matters, paves the way towards change.

Unfortunately, there is no reliable source of publicly available information on this issue. It is difficult to assess and get a clear picture of actual fines imposed, the deals that have been blocked by the authorities, or the remedies that have been implemented and issued in favour of one of the parties in the state of Qatar.

Pursuant to the Committee’s website, it should issue a regular newsletter that outlines all decisions, recommendations, and measures that it has taken. The Committee apparently prepares an annual report about its activities, future plans, and recommendations to be submitted to the Minister of Economy and Commerce and referred to the Council of Ministers. However, the firm is unaware of any Committee newsletters or reports that have been made public.