CAIRO: Monopolistic business practices will now be fined between LE 100 million and LE 300 million, according to the amended version of the anti-monopoly law passed by the People’s Assembly (PA) late Sunday.
Many were awaiting the approval of proposed amendments to create a failsafe law that will regulate competition in the ever-growing market. However, the final version of the law passed by the PA saw no concrete amendments, leaving the public and those who proposed the changes disappointed.
“The outcome is not what we had expected or hoped for, Mona Yassine, chairperson of the Egyptian Competition Authority (ECA), told Daily News Egypt.
The ECA, the regulatory body that initially proposed the amendments, recommended the monetary penalty be increased to a percentage of the company’s sales, either 10 or 15 percent. Another vital aspect of the amendment was the introduction of the leniency clause, which exonerates the first to report a cartel from all charges.
The leniency clause was refused altogether.
The ECA had proposed the amendments after conducting extensive research, which showed that the leniency clause has proven successful in other countries. “The leniency program is very beneficial and encourages people to report cartels, Yassine said.
“We proposed that there be a leniency program and a penalty comprised of a percentage of the sales, [but] passing the law with a fixed penalty of LE 300 million will benefit companies as it is not such a big figure compared to the profits these companies make, Yassine said.
The terms of the final law passed by parliament came as a surprise to the ECA and opposition members. The ECA had met with PA’s economic committee and all members showed support for the amendments, agreeing that rigorous changes were needed to regulate competition and prevent monopolistic practices in the market.
In parliamentary sessions discussing the proposed law, Minister of Trade and Industry Rachid Mohamed Rachid had expressed his support and was pushing for the amendments to be approved.
“We had discussed the law with the parliament’s economic committee and they all seemed convinced and encouraged our propositions, Yassine said.
In July 2006, the ECA began investigations into the cement and steel sectors upon a request from Minister of Trade and Industry Rachid Mohamed Rachid. The authority concurred early October that there existed a cartel among cement companies, charging 20 cement executives with price-fixing.
On the other hand, investigation on steel companies is still ongoing.
MP Ahmed Ezz, also affiliated with the ruling National Democratic Party, controls 60 percent of the local steel market.
According to Alaa Abdel Moneim, PA opposition member, the Sunday session was not attended by the economic committee head, Mostafa El Saeed, and was moderated by the second in command.
Abdel Moneim hinted that MPs affiliated with the National Democratic Party received “higher orders to attend the session and not pass the law.
“Although the session was late at night and usually no one is present in parliament, I was surprised to find that everyone attended, so I knew something was going to happen, he said.
Abdel Moneim called on President Hosni Mubarak to interfere and change this decision, as it is not in the benefit of the public and serves a certain bracket.
In mid-May, MP and Editor In Chief of Al-Osboa newspaper Mustapha Bakry submitted a complaint to the police against Ezz for monopolizing the steel industry in Egypt.
Bakry accused Ezz of four charges: owning more than 50 percent of shares in the state Dekhela steel company, controlling the steel industry in Egypt, raising the price of steel and violating anti-monopolistic laws.
Mahmoud said in a statement that the complaint also included aspects on violation of protection laws and the prevention of monopolistic practices.
“At the end of the day, the final verdict is determined by the parliament’s vote and we cannot control the outcome, Yassine said.
