Article 29 Duties of Commission Regarding Competition
In accordance with Chapter Six of the Act, and Articles Three (e) and (o) of the Ordinance, the Commission shall perform the following functions and duties in relation to competition among service providers in telecommunications markets in the Kingdom:
a ) promote efficient and sustainable competition for the benefit of users;
b ) establish an open and transparent regulatory framework that minimizes regulatory and other barriers to entry into telecommunications markets;
c ) issue a decision designating dominant service providers in relevant markets in the Kingdom, based on their market share and other factors as determined in accordance with Article 30 of this Bylaw;
d ) monitor and prevent abuses of a service provider’s dominant position, pursuant to Article Twenty Six of the Act and this Chapter;
e ) monitor and prevent practices that would restrict competition, in accordance with Article Twenty Four of the Act and this Chapter;
f ) review and decide upon proposed mergers of service providers, pursuant to Article Twenty-five of the Act; and
g ) dispose of complaints and resolve disputes related to anti-competitive practices in a timely and impartial manner
Article 30 Designation of Dominant Service Providers
30.1 In accordance with Article One of the Act, every service provider that earns forty per cent (40%) or more of the gross revenues in a specific telecommunications market shall be designated a dominant service provider in that market, until and unless the Commission specifies otherwise in a decision.
30.2 The Commission may designate a service provider with more or less than forty per cent (40%) of the gross revenues in a specific telecommunications market as a dominant service provider if, either individually or acting together with others, it enjoys a position of economic strength affording it the power to behave to an appreciable extent independently of competitors or users, taking into account its market share and the factors set out in paragraphs 30.6(b) to 30.6(f) of this Article.
30.3 The Commission shall post and maintain on its official web site a current list of all dominant service providers, specifying the markets in which they have been designated to be dominant.
30.4 Decisions designating dominant service providers shall specify and define the relevant markets for which a service provider is designated to be dominant.
30.5 Prior to issuing any designation decision the Commission shall consult with the public and with the affected service providers, except in the case of an initial decision to designate the incumbent service provider as dominant. Notice of such consultation shall be made in accordance with the Rules of Procedure.
30.6 In determining whether to designate a service provider as dominant, or to change its designation, with respect to any relevant market, the Commission shall, in respect of the relevant market only, take into account the following factors:
a ) the service provider’s market share and whether it gives the service provider a position of economic strength affording it the power to behave to an appreciable extent independently of competitors or users, taking into account the other factors set out below;
b ) the number of other service providers and their market shares;
c ) pricing behaviour and the ability of any service provider to take the lead in setting prices;
d ) whether the service provider has exclusive or dominant control over essential facilities for the provision of services and/or telecommunications facilities that provide access to users;
e ) the availability of reasonably substitutable services; and
f ) the nature and extent of barriers to entry.
Article 31 Abuse of Dominance
Pursuant to Article Twenty-six of the Act, dominant service providers are prohibited from undertaking activities or actions that are an abuse of their dominant position. The following types of actions and activities shall be considered an abuse of dominant position:
a ) failure to supply essential facilities to a competitor within a reasonable time after a request and on reasonable terms and conditions, where the dominant service provider has such facilities available;
b ) discrimination in the provision of access, interconnection or other services or facilities to other service providers except under circumstances that are objectively justified based on differences in supply conditions, including different costs or a shortage of available facilities or resources;
c ) bundling of services, whereby the service provider requires, as a condition of supplying a service to a competitor, that the competitor acquire another service that it does not require; or the service provider offers the competitor more favourable terms or conditions that are not justified by cost differences if it acquires another service that it does not require;
d ) ) pre-emptive acquisition or securing of scarce facilities or resources, including rights of way, required by another service provider for the operation of its business, with the effect of denying the use of the facilities or resources to the other service provider;
e ) supplying competitive services at prices below long run average incremental costs or such other cost standard as is established by the Commission;
f ) cross-subsidizing from one service to a competitive service with the objective of lessening competition, except where such cross subsidy is specifically approved by decision of the Commission or by approval of tariffs for relevant services;
g ) failure to comply with the interconnection obligations of a dominant service provider that are specified in Chapter 5 of the Bylaw;
h ) any of the following actions, where such actions have the effect of impeding or preventing the competitor’s entry into, or expansion in, a market:
1. price squeezing, by a dominant service provider, of the margin of profit available to a competitor that requires wholesale services from the dominant service provider, by increasing the prices for the wholesale services required by that competitor, or decreasing the prices of the retail services in markets where they compete, or both;
2. requiring or inducing a supplier to refrain from selling to a competitor;
3. adoption of technical specifications for its networks or systems that prevent interoperability with a network or system of a competitor;
4. failure to make available to other service providers on a timely basis technical information about essential facilities, technical specifications or other commercially relevant information which is required by such other service providers to provide services; and
5. using information obtained from competitors, for purposes related to interconnection or supply of services by the dominant service provider, to compete with such competitors;
i ) any other action or activity engaged in by a dominant service provider that the Commission determines in accordance with Article 32 of this Bylaw, to have the effect, or to be likely to have the effect, of materially restricting or distorting competition in a telecommunications market.
Article 32 Other Anti-competitive Practices
In accordance with Article Twenty-four of the Act, no person shall engage in a practice restricting or distorting competition in telecommunications markets, including the following:
a ) arrangements between two or more service providers that directly or indirectly fix the prices or other terms or conditions of service in telecommunications markets;
b ) arrangements between two or more service providers that directly or indirectly determine which person will win a contract or business opportunity in a telecommunications market; and
c ) arrangements between two or more service providers to apportion, share or allocate telecommunications markets among themselves or other service providers
Article 33 Determination of Abuse of Dominance and Anti-competitive Practices
33.1 The Commission may, on application by any person, or on its own initiative, determine whether, in any case,
a ) the actions or activities of a dominant service provider constitute an abuse of its dominant position, within the meaning of Article 31 of this Bylaw, and
b ) the actions or activities of any service provider amount to an anti-competitive practice within the meaning of Article 32 of this Bylaw.
33.2 Without prejudice to Article Thirty-nine of the Act, a determination by the Commission under paragraph 33.1 of this Article shall be final and binding on all parties, provided such parties received advance notice that such a decision was being considered, and had an opportunity to comment on the relevant issues before the decision was made.
33.3 The Commission may issue a decision determining that a specific action or activity listed in Article 31 or Article 32 of this Bylaw shall not be considered an abuse of dominance, or an anti-competitive practice, as the case may be, under specified circumstances.
33.4 A decision issued under paragraph 33.3 of this Article shall specify the reasons for the decision, which shall be consistent with the evolution of a competitive market-based telecommunications sector in the Kingdom.
Article 34 Remedies for Abuse of Dominance and Anti-Competitive Practices
34.1 If the Commission determines that, in a particular case, or in a number of cases the actions or activities of a dominant service provider constitute an abuse of its dominant position or an anti-competitive practice, within the meaning of the Act and this Bylaw, the Commission may
a ) issue a decision requiring one or more persons named in the decision to take one or more of the following actions:
1. to cease the actions or activities specified in the decision, immediately or at such time prescribed in the decision, and subject to such conditions prescribed in the decision; and
2. to make specific changes in actions or activities specified in the decision, as a means of eliminating or reducing the abusive or anti-competitive impact;
b ) refer the matter to the violations committee to impose a penalty for violation of the Act pursuant to Article Thirty-eight of the Act and Article Ninety four (94) of this Bylaw;
c ) request that the service provider involved in the abusive actions or activities or anti-competitive practices and the persons affected by such actions, activities or practices meet to attempt to determine remedies to prevent or eliminate continuation of such actions, activities or practices, and, if necessary resolve any dispute pursuant to Chapter 6 of this Bylaw;
d ) require the service provider responsible for the abusive or anti-competitive actions or activities specified in the decision to publish an acknowledgement and apology for such actions, activities or practices in one or more newspapers of wide circulation, in such a form and at such times as the Commission specifies in the decision; and/or
e ) require the service provider to provide periodic reports to the Commission to assist in determining whether the actions or activities are continuing and to determine their impact on telecommunications markets, competitors and users
34.2 In case of repeated breaches of a decision made by the Commission to prevent or punish a dominant service provider for abuses of its dominant position or anti-competitive action or activities, the Commission may issue a further decision requiring the service provider to divest itself of ownership of some lines of business, or carry out those lines of business in a separate company with separate books of account, provided that:
a ) the service provider has been given specific written notice that such a decision may be made, and given an opportunity to make comments on the issuance of such a decision; and
b ) the Commission determines that such a decision is an effective means of putting an end to the continuation of the abusive or anti-competitive action, activities or practices
Article 35 Mergers
35.1 Applications for approval of a merger under Article Twenty-five, Clause One of the Act or for purchase of shares under Article Twenty-five, Clause Two of the Act shall include detailed information on the proposed merger or purchase transaction. Such information shall, at a minimum, include:
a ) identification of all persons involved in the merger or purchase transaction, including upstream owners, buyers, sellers and persons that have a greater than five per cent (5%) ownership interest in either;
b ) a description of the nature of the transaction and a summary of its commercial terms;
c ) basic financial information on the persons involved in the transaction, including their annual revenues from telecommunications markets, value of assets devoted to telecommunications business and copies of any published annual or quarterly financial reports; and
d ) a description of the relevant telecommunications markets in which the persons involved in the transaction operate
35.2 Within ninety (90) days of receipt of a duly completed application under Article Twenty-five, Clause One or Two of the Act, the Commission shall:
a ) approve the transaction without conditions;
b ) approve the transaction with such conditions as are reasonably related to promoting the development of open and competitive telecommunications markets in the Kingdom, and maximizing the benefit for telecommunications users;
c ) deny the transaction; or
d ) issue a notice, in accordance with Chapter 2 of the Rules of Procedure, initiating an investigation of the proposed transaction in accordance with paragraph 35.3 of this Article.
35.3 If the Commission decides to initiate an investigation of a proposed transaction under Article Twenty-five, Clause One or Two of the Act, the Commission may request further information relating to the transaction and its implications for telecommunications markets in the Kingdom, including information on the following matters:
a ) telecommunications-related services provided by parties to the transaction, users, suppliers, market shares, and financial performance;
b ) activity of competitors and competitors’ market shares;
c ) availability of substitute products in the relevant markets; and
d ) generally, the impact of the transaction on suppliers, competitors and users in the relevant telecommunications markets
35.4 Following conclusion of an investigation of a proposed transaction under Article Twenty-five, Clause One or Two of the Act, the Commission shall issue a decision pursuant to one of paragraphs 35.2(a), 35.2(b) or 35.2(c) of this Article.
35.5 The Board’s decision with respect to a merger under Article Twenty-five of the Act shall take into account the following guidelines:
a ) a merger shall be found to be likely to prevent or lessen competition substantially when the parties to the merger would more likely be in a position to exercise a materially greater degree of market power in a substantial part of a relevant telecommunications market for two years or more than if the merger did not proceed in whole or in part;
b ) a relevant telecommunications market is the smallest group of products and the smallest geographic area in relation to which sellers can impose and maintain a significant and non-transitory price increase above levels that would have likely existed in the absence of a merger. In most cases, a five per cent (5%) price increase would be significant and a one year period would be transitory;
c ) mergers generally will not be challenged on the basis of concerns relating to the unilateral exercise of market power where the post-merger share of the merged entity would be less than thirty-five per cent (35%); and
d ) mergers generally will not be challenged on the basis of concerns relating to the interdependent exercise of market power, where the share of the telecommunications market accounted for by the largest four firms in the market post-merger would be less than sixty-five per cent (65%).
35.6 In applying the guidelines referred to in paragraph 35.5 of this Article, the Board shall consider:
a ) the extent to which foreign products or foreign competitors provide or are likely to provide effective competition to the businesses of the parties to the merger or proposed merger;
b ) whether the telecommunications business, or a part of the business, of a party to the merger or proposed merger has failed or is likely to fail;
c ) the extent to which acceptable substitutes for products supplied by the parties to the merger or proposed merger are or are likely to be available;
d ) any barriers to entry into a market, including:
i. tariff and non-tariff barriers to international trade;
ii. regulatory control over entry; and
iii. any effect of the merger or proposed merger on such barriers
e ) the extent to which effective competition remains or would remain in a market that is or would be affected by the merger or proposed merger;
f ) any likelihood that the merger or proposed merger will or would result in the removal of a vigorous and effective competitor;
g ) the nature and extent of change and innovation in a relevant market; and
h ) any other factor that is relevant to competition in a market that is or would be affected by the merger or proposed merger