What the private sector needs to know about our new competition law

Egypt’s competition rulebook just got its biggest rewrite in years, and we have a lot to unpack. The reforms, given the final nod by the House of Representatives last month, level the playing field between private businesses and state-owned entities, strengthen the competition regulator’s powers, update the rules governing mergers and acquisitions, and increase penalties for monopolistic behavior.

The new law — called “the economic constitution” by lawmakers — aims to foster a competitive and dynamic market and improve the investment climate, according to a legislative document seen by EnterpriseAM. How? By introducing a standalone track for administrative financial penalties alongside the traditional criminal justice track, as well as tightening rules for mergers, acquisitions, and joint ventures.

Leveling the playing field

A check on the privilege of state-owned companies: The law establishes for the first time a Supreme Committee for Competitive Neutrality, headed by the prime minister and the head of the Competition Authority.

In theory, this is good news for the business community. The committee will have the power to scrap any exemptions or privileges that government decisions or laws have granted to state-owned entities, if those privileges are found to distort fair competition. There will also be a review of all legislation and decisions issued by government bodies to make sure they're in line with fair competition principles.

Full independence

Beyond the new committee, the law gives the Egyptian Competition Authority (ECA) itself a major status upgrade. The ECA will now fall under Article 215 of the constitution — which governs independent regulatory bodies — giving it full technical, administrative, and financial independence.

This is a highly exclusive club that includes institutions like the Central Bank of Egypt and the Financial Regulatory Authority — bodies that, under the additional provisions of Articles 216 and 217, hold substantial authority over the markets they oversee, report directly to the president, and whose leadership is appointed by the president with parliament’s approval.

The constitutional case: “If you view the authority as having both a regulatory and supervisory role, then it naturally falls within the framework of the three constitutional articles, which require such bodies to operate as independent entities with a semi-autonomous administrative and financial structure,” legal and tax advisor Islam Saeed, also a former M&A-focused partner at Matouk Bassiouny, tells EnterpriseAM.

The ECA’s oversight is “a positive step,” he says. Its regulatory role, he explains, involves enforcing the law and weighing in on legislation and relevant regulations, “while the supervisory role gives the authority a watchful eye over the market and the [M&A] deals taking place in it.” The two roles together strengthen the case for full autonomy, Saeed says.

Not everyone sees the change as substantive, however. Mohamed Nabil Hazzaa, former partner and head of the M&A practice group at Sharkawy & Sarhan, tells EnterpriseAM that the shift is little more than a “morale boost” to the ECA’s status — its core competencies and standard operating procedures remain structurally similar to its previous setup, which had it reporting in to the prime minister’s office. “Practically… it wouldn’t affect the scope of powers of the ECA. Nothing changed in terms of the scope and the mandate itself. I think it’s purely bureaucratic and relates to the administrative arrangements for the authority’s staff,” he says.

Higher thresholds, fewer filings

The amendments raise the bar for which paperwork lands on the Competition Authority’s desk. For domestic deals, the law nearly triples the thresholds for a mandatory review by the ECA:

• Combined sales or assets of all parties must now exceed EGP 2.5 bn (up from EGP 900 mn);
• At least two parties must each exceed EGP 500 mn (up from EGP 200 mn).

For foreign companies looking to acquire a business operating in Egypt:

• Combined global sales of the foreign parties must exceed EGP 15 bn (up from EGP 7.5 bn);
• The Egyptian target must post sales above EGP 500 mn (up from EGP 200 mn).

The ECA can still review agreements below these thresholds if it has believes the transaction could threaten competition in the domestic market.

Why is this important? Years of inflation and devaluation has reset company valuations — and the law hasn’t kept up. “Keeping the old thresholds would have flooded the authority with filings for small or competitively insignificant [agreements] — diverting resources from transactions that actually matter. The revised thresholds are designed to better reflect real economic value, keeping oversight focused and investment flowing,” according to a legislative note we reviewed.

Bigger fines, sharper teeth

The new law overhauls how violators are punished, splitting penalties into two tracks — one for illegal mergers and another for anti-competitive behavior — with steeper ceilings across the board.

Fines for illegal M&A: Penalties for violations tied to economic concentration — failing to notify the ECA of a qualifying merger, breaching approval conditions, or closing an agreement despite a rejection — are capped at 10% of the combined annual revenue of all parties, based on their latest consolidated financials.

The exception: If annual revenue doesn’t reflect the agreement’s real economic value, the ECA can instead base the fine on whichever is greater — the transaction value, or the total assets of the parties involved.

Fines for anti-competitive agreements: Cartel-type violations (price-fixing, market allocation, etc.) are capped at 15% of revenues from the specific product involved over the full period of the violation.

The exception: If those revenues can’t be pinned down, the fine is capped at EGP 700 mn.

There’s also an absolute ceiling — no matter how it’s calculated, the fine can’t exceed 10% of total annual revenue of the violating party and all related entities.

Why the hike? The penalties have been raised to keep up with economic shifts, rising inflation, and currency devaluations since 2022. Under the old law, Article 22 set fines based on total product revenues during the violation period — 2-12% for horizontal violations (Article 6) and 1-10% for vertical ones (Articles 7 and 8).

What's new: The amendments push the ceiling for horizontal breaches up to 15%. Crucially, the percentage is still calculated from “revenues achieved from the company's respective breach” — not the parent company's entire turnover, Hazzaa tells us.

A new path for appeals
The shift to a dual criminal-and-administrative framework is a major change for large businesses. Unlike the previous “purely criminal system,” which required reconciliation, the new setup offers a “route for grievances” — letting companies pursue administrative appeals on market issues before things escalate to the judiciary, Hazzaa says.

The law is designed to make market interventions faster and more efficient by separating administrative penalties from criminal ones — enabling quicker action to stop violations before they cause lasting harm, chairman of the House Economic Affairs Committee MP Tarek Shokry tells EnterpriseAM.

The final step

The law is now on President Abdel Fattah El Sisi’s desk awaiting approval, then it will be published in the Official Gazette. The new legislation will take effect three months after publication.