The recent actions taken by the Egyptian Competition Authority (ECA) against textbook providers in the education sector highlight the importance of fair competition in business practices.
The recent actions taken by the Egyptian Competition Authority (ECA) against textbook providers in the education sector highlight the importance of fair competition in business practices. The ECA’s investigation into the education sector found that two foreign publishing houses and their distributors violated competition laws by inflating textbook prices and limiting choices for families and children.
The education sector is particularly interesting to the ECA as it directly affects vulnerable consumers, namely families and children. The Egyptian government deems the education sector a sector of vital public interest. Because of this, it is essential to ensure that competition remains fair and open.
Through its investigation, the ECA discovered agreements between textbook providers that aimed to increase textbook prices and divide the Egyptian textbook market. The agreements violated the Egyptian Competition Law, Law 3/2005, which prohibits agreements that aim to fix or otherwise modify the price for goods and the division or allocation of product markets among competitors.
The agreements between the textbook providers were found to have priced textbooks purchased from abroad at an inflated exchange rate. The agreed-upon exchange rate exceeded the official exchange rate of the Egyptian Central Bank by 80 percent. By applying this inflated exchange rate, the parties increased the price of textbooks in Egypt. The inflated exchange rate negatively impacted consumers and families, particularly those not as financially stable. The inflated price also limited the choice of textbooks available to consumers.
In addition, the ECA found that rough their agreements, the parties divided the textbook market based on clients, namely schools. Certain schools were assigned to specific distributors, limiting inter-distributor competition and resulting in a lack of competitive textbook pricing. As a result, the cost of procurement of textbooks increased, limiting their choice of textbooks.
It remains unclear what sanctions will be imposed on the violating parties. The ECA stressed the importance of the education sector, and the gravity of the violations, as they negatively impacted vulnerable consumers such as families and children. Sanctions imposed in this case will be substantial, limiting fines to EGP 10 million (approx. USD 4 million).
The ECA’s actions against textbook providers in the education sector emphasize the importance of fair competition and the need for compliance with competition and consumer protection regulations. These actions impact the education sector and a message to all businesses operating in Egypt to act ethically and comply with the law. The Egyptian government’s broader strategy to tighten market control and combat violations of competition and consumer protection regulations highlights the government’s commitment to protecting the interests of consumers and promoting a fair and open business environment.
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