Regulation of RPM in KSA, the UAE, and Kuwait

The prohibition and regulation of agreements that restrict competition lie at the core of competition law. Resale price maintenance (RPM) is one of the most common types of agreements in supplier–distributor relationships, but also one of the most likely to raise competition concerns. RPM is generally defined as an arrangement whereby a supplier imposes or influences the resale price at which a distributor sells the supplier’s products, thereby limiting the distributor’s freedom to determine its own pricing strategy. RPM may take various forms, including the imposition of minimum, fixed, or maximum resale prices, as well as indirect mechanisms such as minimum profit margins or restrictions on discounts. While RPM is not automatically prohibited in all cases, it is widely regarded as a restraint on competition. It may reduce intra-brand price competition and, in certain circumstances, lead to de facto coordination among distributors, potentially amounting to a horizontal infringement.

Although RPM arrangements may serve legitimate commercial objectives, they remain subject to scrutiny under competition laws due to their potential to restrict competition. This client brief provides an overview of how RPM is treated under the competition law regimes of the Kingdom of Saudi Arabia (KSA), the United Arab Emirates (UAE), and Kuwait, together with practical considerations for businesses.

RPM under Saudi law

IN KSA RPM is governed by the Competition Law issued by Royal Decree No. M/75 of 2019 and its Implementing Regulations. The law applies to all entities operating in KSA, as well as to conduct outside the Kingdom that has effects within it. The General Authority for Competition (GAC) is responsible for enforcement. They have issued guidelines providing a structured framework for assessing anti-competitive agreements, including both horizontal and vertical arrangements, with specific attention given to RPM.

The Saudi Competition Law distinguishes between agreements that are anti-competitive “by object” and those that are assessed “by effect”. Agreements classified as anti-competitive by object are considered inherently harmful to competition and are therefore prohibited per se, without the need to demonstrate actual or potential effects on the market. Such agreements are automatically subject to sanctions once established. By contrast, other agreements are assessed based on their effects and may be permissible if they do not result in a restriction of competition, or if they generate efficiencies that outweigh their anti-competitive impact.

At the horizontal level, price fixing between competitors—i.e. entities operating at the same level of the supply chain—is considered a by-object infringement and is prohibited per se. In such cases, there is no need for the GAC to establish the existence of actual harm to competition, nor to demonstrate a specific anti-competitive intent. By contrast, the GAC adopts an effects-based approach when assessing vertical agreements, including RPM.

While not automatically prohibited, the GAC regards RPM as a significant restriction of competition and is therefore subject to scrutiny. In assessing RPM arrangements, the GAC considers a range of factors, including the extent to which the arrangement restricts distributors’ freedom to determine resale prices, the degree of price uniformity it creates in the market, and its overall impact on consumer welfare.

The GAC further distinguishes between different forms of RPM. The imposition of minimum or fixed resale prices is generally considered more restrictive, as it directly limits price competition between distributors and may lead to price alignment across the market. By contrast, the imposition of maximum resale prices is typically viewed as less problematic and may, in certain circumstances, produce pro-competitive effects by preventing excessive pricing and benefiting consumers. However, where such practices are implemented by a dominant supplier, they may still give rise to concerns of abuse of dominance.

RPM may, in certain circumstances, give rise to horizontal concerns. In particular, where a supplier effectively coordinates the resale prices of its distributors—whether directly or indirectly—this may result in a form of alignment among distributors that resembles horizontal price fixing. This may occur even in the absence of direct contact or explicit agreement between the distributors themselves. In such cases, the GAC may characterize the aligned conduct as a horizontal agreement with restrictive effects on competition, which would be prohibited per se, without the need to establish the existence of an explicit arrangement, a common intention to restrict competition, or demonstrable harm to the market.

The GAC also considers indirect forms of RPM, where suppliers impose pricing constraints through mechanisms that, in practice, achieve the same effect as direct price fixing. These may include the use of discount controls, minimum margin requirements, monitoring systems, or incentive and penalty structures that effectively limit the distributor’s ability to deviate from a specified price level. Such arrangements are likely to be viewed as restrictive where they undermine genuine pricing autonomy.

Additional concerns may arise in situations where suppliers operate both upstream and downstream, i.e. where they sell directly to end customers while also supplying independent distributors. In such cases, imposing minimum resale prices on distributors—particularly where those prices exceed the supplier’s own retail prices—may eliminate price competition between the supplier and its distributors, thereby giving rise to both vertical and horizontal concerns. Finally, recommended resale prices may, in principle, be permissible, if they remain genuinely non-binding. However, where such recommendations are accompanied by monitoring mechanisms, incentives, incentives or penalties, or other measures that encourage compliance, they may be recharacterized as indirect RPM and therefore fall within the scope of prohibited conduct.

For further details on the GAC’s guidelines addressing other types of agreements, please refer to our brief on the New GAC Guidelines on Anti-Competitive Agreements: A Compliance Roadmap.

RPM under UAE law

In the UAE RPM is regulated by Federal Decree-Law 36/2023 on the Regulation of Competition, which provides a regime for the prohibition of the conclusion of agreements that restrict competition, the abuse of a dominant position, and the conclusion of economic concentrations that may restrict competition. The law is enforced by the Ministry of Economy and the Competition Regulation Committee, which have the powers to investigate and impose sanctions.

RPM falls within the scope of prohibited conduct where it involves the fixing or imposition of resale prices, particularly minimum or fixed resale prices. Such arrangements are likely to restrict distributors’ pricing autonomy and reduce intra-brand competition, and are therefore generally viewed as anti-competitive.

Although the UAE framework does not formally distinguish between “by-object” and “by-effect” infringements, price-fixing arrangements are treated as inherently problematic. Accordingly, RPM provisions that directly or indirectly fix prices may be considered per se. That said, not all forms of RPM raise the same level of concern. Maximum resale prices may, in certain circumstances, be viewed more leniently, particularly where they do not prevent distributors from offering lower prices and may benefit consumers. However, the absence of detailed guidelines or decisional practice creates some uncertainty as to how these distinctions are applied in practice.

Where the supplier holds a dominant position, RPM may also be assessed as a form of abuse of dominance, particularly where it restricts distributors’ commercial independence or distorts market conditions.

RPM under Kuwaiti law

RPM In Kuwait is governed by Law 72/2020 on the Protection of Competition, which prohibits anti-competitive agreements, abuse of dominant position and practices that distort competition. The law applies to conduct that occurs within Kuwait or has an effect on the competition in the Kuwaiti Market. The law is enforced by the Competition Protection Agency (CPA), which is empowered to investigate anti-competitive conduct and impose penalties, including significant financial fines.

The law explicitly covers agreements that directly or indirectly fix prices or influence market pricing, including vertical arrangements between suppliers and distributors. RPM is, therefore, captured where it involves the imposition of resale prices, particularly minimum or fixed resale prices. Such arrangements are likely to restrict distributors’ pricing freedom, lead to price uniformity, and reduce intra-brand competition.

The CPA generally adopts an effects-based approach, assessing RPM arrangements based on their impact on competition, including whether they result in higher prices, restrict market dynamics, or create barriers to entry. Although exemptions are available, they are subject to strict conditions and are unlikely to apply to RPM arrangements in practice, particularly those involving minimum or fixed resale prices.

Where a supplier is dominant, RPM may also constitute abuse of dominance. Particularly where it limits market access or distorts competition at the distribution level. While maximum resale prices may, in some cases, raise fewer concerns, a cautious approach remains advisable in the absence of detailed guidance.

Practical considerations

Businesses operating in KSA, the UAE, and/or Kuwait should carefully assess distribution agreements for compliance with competition laws. In all three jurisdictions, provisions that fix or impose minimum resale prices are likely to attract scrutiny. Distributors should retain autonomy in setting resale prices, and any pricing guidance from suppliers should remain non-binding and free from enforcement mechanisms. Given the increasing level of enforcement—particularly in Saudi Arabia having a more developed regime and accessible guidelines—it is advisable for businesses to implement robust competition compliance programs and ensure that distribution practices are regularly reviewed for legal risk.

With their guidelines the GAC has provided a reliable framework for the interpretation of the relevant provisions. Hence, legal risk analysis under Saudi law will be more precise. In the UAE and Kuwait on the other hand such detailed guidelines are still missing. Hence, there remains a considerable amount of ambiguity when assessing risks posed by RPM in these jurisdictions. Drawing inspiration from other, more established jurisdictions may serve as a decent initial basis. Still, parties must keep in mind the both the UAE and Kuwait are independent jurisdictions and their competition authority—while open to considering precedence from other jurisdictions in their assessments—may take diverging positions on matters. Hence, close engagement with the competent authorities may be helpful.