Jordan: Competition Directorate

In Jordan, there is a certain degree of competition prevailing between sellers and service providers. In an economy like this, there should be a process in place to handle obstacles and conflicts between the interests of different sellers and service providers.¹

This article will discuss how competition policy is applied in Jordan by Competition Directorate regulatory bodies and the judicial authority, aiming to find what Jordan could develop to support competition.

Competition law

The Competition Law was issued in Jordan on 15 August 2002 as a provisional law,² and was approved as permanent law on 1 September 2004. It was named Competition Law No. (33) of 2004 (the Competition Law).³

The Law is based on free determination of prices in accordance with market mechanisms and principles of free competition, except for prices of basic commodities such as bread and fuel, which are regulated by other laws and temporary price controls set by the government to cope with exceptional circumstances.⁴

The main sections of the Law cover anticompetitive practices, abuse of dominant position, regulation of mergers and acquisitions, ensuring fairness of economic transactions and excessive pricing.⁵

The Competition Law’s scope is expanding to cover all production, commerce and service provision activities in Jordan, as well as any economic activities occurring outside but having an effect inside Jordan.⁶

Unfortunately, the umbrella of the Competition Law does not include the practices covered by other applicable laws (eg, telecommunications law, transport law).⁷

As a result of the practical implementation of Competition Law No. (33) of 2004, the Ministry of Industry and Trade and Supply prepared an amending draft law, which was ratified as the Law Amending Competition Law No. (18) of 2011, and to be read with Competition Law No. (33) of 2004 as one law when it came into force in November 2011. The new amendment increased some penalties and added excessive pricing to the aspects of abuse of dominant position.⁸

Competition Directorate

To implement the Competition Law, the Competition Directorate was established at the end of 2002⁹ as part of the Ministry of Industry and Trade and Supply, and it is the authority entrusted with implementing the Competition Law.

The Competition Directorate’s tasks are:¹⁰

• to spread competition culture in Jordan;
• to apply Jordan’s competition policy;
• to conduct the necessary investigations of practices that may contravene competition;¹¹
• to receive complaints, economic concentration requests, exemptions requests and to follow them up;
• to cooperate with similar entities outside Jordan to exchange information and data in relation to applying competition rules to the extent permitted by international treaties; and
• to issue clarifying opinions in competition matters.

The Competition Affairs Committee is the advisory body of the Competition Directorate. The chairperson of the Competition Affairs Committee is the Minister of Industry and Trade; other members represent several public and private sectors.¹²

The roles of the Committee are:¹³

• to provide advice on the general competition strategy; and
• to review matters related to the provisions of the law.

Since its establishment, the Competition Directorate has dealt with matters categorised as follows: complaints, control of economic concentration processes, consultation about issues related to competition in the different economic sectors, as well as a range of studies and investigations conducted by the Directorate of its own initiative in the framework of its continued follow-up of the market status.

The Competition Directorate also makes an effort to spread a culture of competition and use many activities to raise awareness of provisions of the law.

Judicial authority

Though the Jordanian application of competition is different to several Arab and international practices that have tried to form competent judicial bodies specialised in competition suits, what has been achieved so far is considered an important development, and evidence of the success of the Jordanian practice.

In conjunction with the establishment of the Directorate, the Judicial Council was tasked with nominating the judges and prosecutors who would try the suits related to anticompetitive practices. Due to the importance of the Competition Law, the Ministry of Industry and Trade and Supply held training courses for those judges and prosecutors. They arranged external visits for them to learn about the Arab and international experiences and participate in conferences and meetings of the international organisations interested in competition.¹⁴

Article 17 of the Competition Law clarifies the relationships between the Competition Directorate, regulatory commissions and judicial body which show the interactions between all of these parties in order to apply the competition policy.

The article mentions that cases relating to violations of the provisions of the Competition Law shall be instituted according to a complaint presented to the public prosecutors by the following parties:

• the Minister upon recommendation of the director of Competition Directorate or upon the request of any other ­official party;
• any enterprises from the private sector;
• licensed consumer protection associations;
• any group of at least five consumers having suffered harm;
• chambers of commerce and industry;
• professional and syndicate organisations; or
• sectorial regulatory authorities.

This means that anyone mentioned in the article who was harmed by the anticompetitive practices may directly file a complaint to the public prosecutor. This article shows the interaction between the competition and consumer protection and gives the regulatory authorities the right to file completion complaints directly to the court.

However, the law sets the Ministry as a party in all competition cases, and it may submit any studies or comments to the court and request to continue hearing such cases even where the parties have dropped their case or have settled their dispute. It may also contest any decisions issued in these cases.

The court may also assign the Directorate to carry out the necessary investigations into the statements it has received from the case’s parties, and the Directorate shall submit a report thereon within a certain period.

The ideal application of the requirement to notify the Competition Directorate about all competition cases is to make the Directorate able to follow up these cases. This could be achieved by issuing instructions organising the coordination between the Competition Directorate and regulatory bodies and between the Competition Directorate and judicial authority or by agreed upon memorandums of understanding in order to organise the coordination methods, scope and aspects.

Development opportunities

Although the Competition Law sets the Competition Directorate as the intrastate authority to apply the Law, it also gives some other parties the right to file complaints related to Competition Law violations to the general prosecutor directly. Though this may require more coordination between the Competition Directorate and these parties, as well as the judicial authority, this could be achieved by either issuing instructions or signed memoranda of understanding.

Therefore, the steps necessary to create the conditions for effective competition in Jordan include, but are not limited to, the following:

• enhancing the capacity building for Competition Directorate;
• promoting competition culture;
• cooperating with regulatory authorities in order to issue instructions to organise coordination or to agree upon a memorandum of understanding;
• conducting more awareness for regulatory bodies and judges; and
• working on a memorandum of understanding with the judicial board to clarify the methods of notifying the Competition Directorate about the competition cases that are filed directly to the court.

Notes

1. Hetham Abu Karky: ‘Competition Policy and Informal Economy.‘ OECD Global Forum on Competition. 4 December 2008. p 1. Available at: www.oecd.org/daf/competition/44547855.pdf.
2. Published in the Jordanian Official Gazette 15 August 2002. Issue no. 4560. p 3836.
3. Published in the Jordanian Official Gazette 1 September 2004. Issue no. 4673. p 4157.
4. Ruba Qalyoubi: Competition Law in the Arab Countries – Jordan as a Case Study. Stampflit Publishers Ltd. Berne. 2008. p 43.
5. Articles 5, 6 and 8 of the Competition Law.
6. Article 3 of the Competition Law No. (33) for the Year 2004.
7. Article 7 of the Competition Law. ‘Practices arising out of the application of a Law and practices falling within the ambit of temporary measures instituted by the Council of Ministers to deal with exceptional circumstances, emergency situations or natural disasters shall not be considered anticompetitive in the sense intended in Articles 5 and 6 of this Law, provided that such measures be reviewed within a period not exceeding six months after the beginning of the application thereof.’ For example, in order to avoid this conflict the Competition Directorate Telecommunication Regulatory Commission (TRC) signed a Memorandum of Understanding (MOU) in 2009 that sets forth the respective roles of the two entities with respect to anticompetitive conduct in the Telecommunications Sector. Competition Directorate Annual Report 2009.
8. Published in the Jordanian Official Gazette 2 October 2011. Issue no. 5118. p 4485.
9. More information about the Competition Directorate establishment is available at: www.mit.gov.jo/EN/The%20Center/Competition/Pages/Publications.aspx.
10. Article 12 of the Competition Law No. (33) for 2004.
11. For example, anticompetitive agreements like cartels, market allocation and the abuse of dominant position.
12. Article 14/A/7 of the Competition Law No. (33) for 2004 mentions that the president of any of the associations concerned with protecting the consumer named by the Minister should be a member of the Committee for Competition Matters.
13. Article 14 of the Competition Law No. (33) for the Year 2004.
14. Article 16/E of the Competition Law: ‘The office of the Attorney General shall be represented, in competition cases which fall within the jurisdiction of the competent court of first instance, by a specialized prosecutor general.’