The Egyptian government designated the educational sector of vital interest for the country due to the sector’s importance for economic development and it affecting all citizens.
The Egyptian government designated the educational sector of vital interest for the country due to the sector’s importance for economic development and it affecting all citizens. This designation lead to the Egyptian Competition Authority (ECA) to take an elevated interest in the sector, which lead to the ECA initiating an investigation into the market for school uniforms. This investigation is the second investigation in markets related to the education sector after the investigation initiated by the ECA into price fixing for school books initiated in February 2023 (for an overview on this investigation see our client update of 26 February 2023). In the current investigation the ECA has turned its attention to the violations found in the school uniform market and found that four educational establishments violated the Egyptian competition law by abusing their dominance to unduly restrict market access of competitors.
The investigation involved both public and private school. The ECA found three schools to have abused their dominant position in the market by restricting the sale of their uniforms to exclusive outlets. Thereby, the schools—in violation of art. 8 Egyptian Competition Law—prevented competitors from entering or expanding in the market. The fourth offender—a private school—entered into a vertical agreement with a ready-to-wear store to manufacture and sell exclusively its school uniforms violating art. 7 Egyptian Competition Law. The ECA found that these practices did not only imposed undue barriers for competitors to enter the market but also restricted the choices for customers—i.e. students and their parents—and thereby lead to overpricing of school uniforms.
In responds to the violations discovered, the ECA issued guidelines on competitive compliance in the school uniforms sector. The guidelines provide an assessment of key practices that should be avoided in order to foster a healthy competition in the market. Such practices include schools exclusively selling uniforms within the school’s premises, limited time dealing with a specific supplier, withholding information on uniform specifications from parents and suppliers, and setting a minimum price for resale.
In addition, the guidelines make several recommendations aimed to promote competitive compliance. The recommendations address a variety of market actors including educational institutions, manufacturers, and suppliers. Those recommendations cover non-discrimination between school uniforms regarding designs, freedom of the parents to purchase from any outlet, prohibition of exclusive agreements with suppliers, and that any changes to specification of uniforms shall be publicly announced two month before the school year starts.
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