Oman's Legal Framework on Fair Market Competition and Monopoly Prevention

Oman's legal framework for ensuring fair market competition and preventing monopolies is primarily defined by the Competition Protection and Monopoly Prevention Law. Promulgated by Royal Decree No. 67/2014 and subsequently amended by Royal Decree No. 22/2018, this law establishes the rules for safeguarding free competition across the Sultanate.

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the law applies to all production, trade, and service activities in the Sultanate, and to any economic or commercial activities carried outside the Sultanate that have an impact within it.

Dr. Mohammed Ibrahim Al Zadjali, Chairman of Mohammed Ibrahim Law Firm, explained that the law's reach extends to all production, trade, and service activities within Oman. It also covers economic or commercial activities conducted outside the Sultanate that have a direct impact within its borders. Furthermore, the law addresses the misuse of intellectual property rights, trademarks, patents, and publications when such actions adversely affect competition. However, public utilities wholly owned and managed by the state, along with research and development activities, are exempt from its provisions.

The legislation strictly prohibits agreements or practices designed to prevent, limit, or weaken competition. This includes actions such as price-fixing, dividing markets among competitors, and restricting production. A company or group is deemed to hold a dominant market position if its share exceeds 35 percent of the relevant market. Dominant entities are forbidden from selling products below actual cost to eliminate competitors or from restricting supply to create artificial shortages.

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The law prohibits any agreement or practice aimed at preventing, limiting, or weakening competition, including price-fixing, market division, and limiting production.

Individuals or entities planning economic concentrations, such as mergers or acquisitions, must seek prior written approval from the relevant Centre. A decision on such requests must be made within 90 days; otherwise, the request is automatically deemed accepted. Crucially, no concentration will be approved if it results in one entity acquiring over 50 percent of the relevant market.

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A person or group of persons is considered dominant where its share of the relevant market exceeds 35 percent.

Violations of the law, including monopolistic agreements, anti-competitive practices, and abuse of dominance, carry severe penalties. These can include imprisonment ranging from three months to three years, fines equivalent to the profits gained from the violating products, or both. Additionally, violators may face a fine of 5 to 10 percent of their total annual sales of the offending products in the last completed fiscal year. Stricter penalties apply for obstructing investigators, with potential imprisonment from one month to three years and fines of OMR 10,000 to OMR 100,000. Dr. Al Zadjali concluded that this legal framework underscores Oman's dedication to fostering a transparent and competitive marketplace that protects both businesses and consumers from monopolistic harm.

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A dominant person is also prohibited from selling below actual cost to obstruct or exclude competitors, or from restricting supply to create an artificial shortage, he said.