International businesses operating in Saudi Arabia face a sharpened enforcement climate. The Hayaa al-Munafasa (General Authority for Competition, "GAC") has significantly increased the pace and scale of its enforcement actions. Sectors ranging from consumer goods to financial services and logistics are under active scrutiny. Companies that have not reviewed their compliance posture risk severe financial penalties and operational disruption.
Saudi Arabia's competition authority has intensified enforcement of competition legislation, targeting cartel conduct, abuse of market dominance, and failures to meet merger notification obligations. Penalties can reach a substantial share of a company's annual revenues, and repeat violations attract aggravated sanctions. International companies with Saudi operations should treat compliance review as an immediate priority.
This alert identifies which business categories are most exposed, describes the penalty regime, and sets out five immediate actions international companies should take now.
What has changed – the enforcement shift and its scope
Saudi competition legislation has been in force for several years. However, the GAC's enforcement posture shifted materially in the period leading into 2025 and continuing through 2026. The authority has moved from primarily reactive investigation to proactive sector-wide inquiries.
Three enforcement priorities are now clearly established. First, the GAC is targeting horizontal agreements – price-fixing, bid-rigging, and market allocation among competitors. These are treated as per se violations under Saudi competition law, meaning intent does not need to be separately proved. Second, the authority is scrutinising abuse of market dominance, particularly by companies holding strong positions in essential goods, healthcare supplies, and digital platforms. Third, merger notification failures – where qualifying transactions close without prior approval – are generating substantial fines after the fact.
The GAC's investigative tools have also expanded. Dawn raids conducted without prior notice are now a documented feature of enforcement. Digital evidence – including internal communications and pricing algorithms – is being requested and analysed. Companies that assumed low enforcement risk because of Saudi Arabia's historically business-friendly environment should recalibrate that assessment immediately.
Penalties under competition legislation are calculated as a proportion of annual revenues attributable to the relevant market. For first-time violations involving horizontal conduct, fines can represent a meaningful share of Saudi revenues. For repeat violations or cases involving deliberate concealment, the multiplier increases significantly. Directors and senior officers can face personal liability in addition to corporate fines.
Who is affected – threshold criteria and exposed business categories
The GAC's jurisdiction covers all companies operating in Saudi Arabia, including foreign entities with a local presence or whose conduct affects the Saudi market. There is no de minimis exemption for smaller operators in cartel cases.
The businesses facing the greatest immediate exposure fall into five categories:
- Multinational consumer goods companies with Saudi distribution networks
- Healthcare, pharmaceutical, and medical device suppliers
- Construction, logistics, and freight operators participating in public tenders
- Financial services providers, including insurance and fintech platforms
- Technology companies with significant Saudi user bases or platform market positions
For merger notification, the relevant thresholds are based on combined Saudi revenues or assets of the merging parties. Transactions that meet or exceed those thresholds must be notified to and cleared by the GAC before completion. Gun-jumping – closing without clearance – triggers fines independent of whether the underlying transaction raises substantive concerns.
Joint ventures, distribution agreements, and franchise arrangements are also under review. The GAC has made clear that contractual structures that restrict competition – even indirectly – will be assessed against competition legislation regardless of their commercial framing.
For businesses operating across the Gulf Cooperation Council region, enforcement coordination between Saudi Arabia and the UAE competition authority is increasing. A finding of cartel conduct in one jurisdiction can trigger parallel investigation in the other. For a comparative view of enforcement developments in the UAE, see our alert on UAE competition enforcement trends.
To receive an expert assessment of your company's competition exposure in Saudi Arabia, contact us at info@ferrazwhitmore.com.
What to do now – five immediate actions
International companies with Saudi operations should act on the following without delay.
1. Audit existing commercial agreements. Review all distribution, agency, and supply agreements for clauses that fix resale prices, allocate territories exclusively, or restrict customers. Flag any clause that could be read as a horizontal restriction. Agreements that were commercially reasonable under prior enforcement conditions may now attract scrutiny.
2. Assess merger notification obligations. If your group has completed or is planning any transaction involving Saudi assets or revenues above the notification threshold. Obtain a formal threshold assessment from a lawyer in Saudi Arabia with competition law experience. Retroactive notification after a gun-jumping finding does not eliminate the fine.
3. Evaluate market dominance risk. If your company holds a strong position in any Saudi product or service market, assess whether pricing practices, rebate structures, or refusal-to-supply decisions could be characterised as abusive under competition legislation. The GAC's recent cases show that dominance assessments are being applied to mid-sized market participants, not only to national champions.
4. Establish or update an internal competition compliance programme. A documented, active programme – covering training, risk assessment, and escalation procedures – is a recognised mitigating factor in GAC penalty calculations. Companies with no programme in place face the full penalty range. Engaging a competition law practice in Saudi Arabia to design and implement a compliance programme is a concrete risk-reduction step.
5. Understand the leniency programme. Saudi competition legislation includes a leniency programme that allows companies to self-report cartel participation in exchange for reduced or waived penalties. The programme operates on a first-in basis: the first party to report receives the greatest reduction. If there is any internal uncertainty about past conduct, a privileged legal review – conducted before any GAC contact – is essential. Companies that delay while a co-participant reports first lose the benefit entirely.
Where a GAC investigation escalates into formal proceedings or civil claims, the matter frequently intersects with broader corporate disputes in Saudi Arabia, including shareholder actions and contractual indemnity claims between joint venture partners.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our competition law practice covers enforcement defence, merger notification, compliance programme design, and leniency applications in Saudi Arabia and across the Gulf Cooperation Council. The firm's team includes practitioners with experience before the GAC and peer competition authorities in the region. We combine Portuguese civil law expertise with English common law tradition to provide cross-border legal solutions to international companies operating in high-growth markets. As an international law firm in Saudi Arabia-facing matters, we advise multinational groups, regional businesses, and in-house legal teams who need results-oriented counsel. Engaging a lawyer in Saudi Arabia with cross-border competition experience at an early stage materially reduces enforcement risk. To discuss your company's specific situation, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.