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Riyadh fines 14 cement firms for price fixing

17 April 2023

Saudi Arabia’s antitrust body, the General Authority for Competition (GAC), has fined 14 cement companies SR140m ($37.3m) for price manipulation.

The firms are Al-Safwa Cement, Al-Madina Cement, Umm al-Qura Cement Company, Al-Jawf Cement, Qassim Cement, Najran Cement, Southern Province Cement, United Industrial Cement, Yamama Cement, Riyadh Cement (Saudi White Cement), Arabian Cement, Saudi Cement, Yanbu Cement and Hail Cement.

Each of the producers has received a SR10m fine for infringing Article 4 of the kingdom's competition law.

The 14 manufacturers, which control most of the country’s cement market, were found guilty of reaching an illegal agreement among themselves to raise cement prices and their market share in local markets.

The law prohibits practices, agreements or contracts among currently or potentially competing firms that lead to the restriction of commerce or violation of competition by controlling the prices of goods and services intended for sale by increasing, decreasing or fixing them to harm the market.

This applies to any contract, whether it is written or verbal, expressed or implied, in the objective of such a practice. Firms enjoying dominant status are also banned from carrying out any practice that restricts competition.

Investigation

The GAC investigated based on preliminary indications and complaints it had received about several firms in the cement sector manipulating the prices to benefit themselves.

The authority added that the resolutions had been published at the expense of the violators.

These decisions were final, as the Administrative Court of Appeal in Riyadh rejected the lawsuits filed by those companies to challenge the decisions issued against them.

The GAC also appealed to all entities subject to the competition law and its implementing regulations to abide by them and to apply provisions that encourage consumer choices and promote market development and efficiency with justice and transparency.

Earlier this month, the GAC penalised two establishments for colluding in a project at the Saudi Authority for Industrial Cities & Technology Zones, known as Modon, with a total fine of SR2.11m.

In March, the GAC increased the minimum turnover threshold for merger control filings from SR100m to SR200m, to reduce the number of unnecessary notifications, facilitate procedures and cut down financial expenses, particularly those of small and medium-sized enterprises.

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Eva Levesque

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