On 3 January 2023, the board of directors of the Egyptian Competition Authority (ECA) determined that 33 printing houses violated Egyptian competition law when they engaged in collusion and price-fixing in relation to public tenders of the Ministry of Education.
On 3 January 2023, the board of directors of the Egyptian Competition Authority (ECA) determined that 33 printing houses violated Egyptian competition law when they engaged in collusion and price-fixing in relation to public tenders of the Ministry of Education. This decision marked the end of an investigation of the ECA into the practices of printing houses in public tenders for supply of schoolbooks.
During their investigation the ECA found that several printing houses had concluded an agreement to set minimum prices for different items requested in a tender of the Ministry of Education for the supply of schoolbooks for the academic year 2022/2023. The underlying exchange of pricing-related information among the printing houses constituted a violation of article 6(c) of Law 3/2005, the Egyptian Competition Law, 3/2005. The ECA determined that through this violation the publishing houses negatively affected the efficiency of government spending, resulting in waste of public funds. Furthermore, the ECA found that the violation compromised fair competition, and constituted a breach the confidentiality obligations imposed by the the Ministry of Education in their tender. In their investigation report the ECA stressed that collusion in public tenders constituted one of the most serious offenses pursuant to article 6(c) Egyptian Competition Law, as such action not only undermines market structure and harms consumers but also impedes government spending efficiency. This ultimately prevents various government agencies from acquiring goods and services at optimal prices and quality, directly impacting public welfare.
The action taken by the ECA against the publishing houses is in line with the authority’s focus on consumer facing sectors with impact on vulnerable parts of Egyptian society, which is part of the Egyptian government’s larger strategy to ease economic burdens for Egyptians. The education sector is one of the sectors the ECA has taken a particular interest in this afford. In 2023, the ECA conducted several investigations into the education sector. In their decision of 25 February 2023 the ECA determined that the representative offices of two foreign publishing houses, in close cooperation with their authorized, Egyptian distributors, had engaged in horizontal agreements aimed at artificially increasing the price of educational textbooks in Egypt (for more details see our client update of 26 February 2023). Furthermore, in the second half of 2023, the ECA investigated violations of article 6(c), by 11 public and private schools and found them to have abused their dominant position in the market by restricting the sale of uniforms to exclusive outlets (for more details see our client update of 24 September 2023).
The investigation into antitrust violations related to school uniforms lead to the enactment of Ministerial Decree 167/2023 by the Ministry of Education that implemented guidelines proposed by the ECA regarding procurement of school uniforms. This step reflects a wider commitment of the ECA to increase competition law compliance and enhance capabilities of sector specific authorities to prevent and address violations.
Egyptian companies should take note of these decision and the ECA’s increased oversight of competition compliant behavior in general and of sectors with particular relevance for consumers in particular. They need to ensure that they and their staff observe competition regulations. However, the developments are also relevant for foreign companies doing business in Egypt as shown by the ECA’s 2023 investigation into the schoolbook sector, which involved foreign businesses. Considering the comparatively low awareness of competition law and regulations in Egypt, companies should take steps to ensure that their local staff and partners comply with Egyptian competition law. This may involve awareness building through competition guidelines and training for local staff and partners as well as monitoring of their conduct through oversight and reporting mechanisms.
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