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Competition Law in Oman.

Summary: While competition law in Oman is not independently regulated, steps are being taken to enforce the provisions of unfair competition contained in various legislations

Competition law is an essential element in the efficient working of markets. It essentially serves to benefit the consumer by encouraging innovation and efficiency, and providing a wider range of choices, enabling consumers to buy products at the best possible price, and contributing to national competitiveness amongst businesses. Competition policy seeks to encourage and improve the competitive process, and to ensure consumers feel the benefits of that process. These aims are achieved in practice through competition law.

There is no single or standalone competition legislation in Oman, unlike many other countries. Instead, legal provisions dealing with competition law issues, consumer protection, and the prevention of unfair trade practices are contained in various laws.

Most of the competition laws are contained in the following legislation: (a) the Oman Commercial Law issued by Royal Decree 55/90 and the amendments thereto ("Oman Commercial Law"), (b) the Law of Industrial Property Rights issued by Royal Decree 67/2008 and (c) the Consumer Protection Law promulgated by the Royal Decree 81/2002 ("Consumer Protection Law").

A key legal provision having a bearing on competition law issues is contained in Article 6 of the Consumer Protection Law. This Article 6 authorises the Minister of Commerce and Industry to take all such steps as may be necessary to prevent monopolistic practices in Oman. This essentially has the effect of granting the Minister wide-ranging powers to foil any monopolistic activity.

Some examples of what may be considered as anti-competitive practices in Oman are:

(a) unfair competition between suppli- ers, for instance if a manufacturer receives confidential informa-tion from a retailer about a rival supplier's pricing or other plans;

(b) limitations on consumer choice, where for example a manufacturer influences the retailer to restrict the supply of competing products;

(c) anti-competitive collusion between rival suppliers, i.e. where rival suppliers share information in order to manipulate consumers;

(d) anti-competitive collusion between competing retailers served by the same category manager, where they may jointly agree on a common pricing strategy adverse to the consumers' interests;

(e) a merchant inducing employees of another merchant to leave the services of the latter and enter into his service, or disclose to him secrets of his competitor or to assist him in enticing the latter's clients;

The author works at Al Busaidy Mansoor Jamal & Co and specialises in intellectual property, technology, media and telecommunication (IP& TMT) laws.

(f) committing acts to cause confusion or mislead consumers as to the origin of a merchant or their products etc.;

(g) mala fide acts or practices that damage or are likely to damage the trade reputation of a competitor; or

(h) the acquisition, disclosure or use of classified information belonging to competitors.

There are no specific legislative provisions specifically addressing any of the above-stated anti-competitive practices, but if any of these practices lead to an artificial price increase for the consumer then they would fall foul of Article 6 of the Consumer Protection Law. Any violation of Article 6 would entitle the Minister through the Ministry of Commerce and Industry ("MOCI") to conduct an investigation into the relevant practice with a view to determining whether any resultant increase in prices amounts to an unfair trade practice. Under the Consumer Protection Laws the MOCI has also been given the power to prohibit any contact between two or more entities if, in its judgment, a "cartel" results which could adversely affect consumers' interests.

Whilst competition law in Oman is not independently regulated, steps are being taken to enforce the provisions of unfair competition contained in various legislations, as is evidenced by the Law of Industrial Property Rights, which makes a greater effort to define "unfair competition", and establishes the onus of proof/ evidentiary requirements for the same. The Law of Industrial Property Rights also sets out the remedies for violation of competition law provisions.

While anti-competitive practices in Oman are now being regulated, penal- ising violations of these regulations is left to the Omani Courts which require substantial evidence before awarding any remedies for unlawful competition. Irrespective of the scale of the offence, remedies for violation of competition laws may only be awards of damages or fines because there are currently no laws in Oman empowering the MOCI or an Omani Court to sentence indi- viduals or entities to terms in prison for a competition law related offence.

It is relevant that apart from the general authority given to the MOCI to take all steps as may be necessary to prevent monopolistic practices or cartels in Oman, certain other Omani laws impose a duty on certain authorities/ ministries in the relevant sector of the Omani economy to ensure fair competition in such sector. This includes:

(i) The Telecommunications Regulatory Authority, which is authorized to ensure fair competition in the telecommunications industry;

(ii) The Information Technology Authority, which is invested with the authority to monitor and regulate fair competition vis-a-vis the information technology industry; and (iii) The Capital Markets Authority, which is given the mandate to deal with competition issues in capital markets and the insurance sector in Oman.

It is encouraging that these developments are taking place in the Sultanate of Oman from the perspective of investors, because fostering fair competition is an essential prerequisite to creating level playing field for investors. Competition laws are also important from the perspective of the general public in Oman because they ultimately serve to uphold consumer welfare by preventing any exploitation of customers by big corporations.

In conclusion, the responsibility to ensure fair competition and consumer welfare in Oman rests squarely on the shoulders of the relevant ministries and authorities, along with the Omani Courts, which have been given charge of imposing these laws.

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Publication:Oman Economic Review (OER)
Geographic Code:7OMAN
Date:Mar 27, 2014
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