The Incentives Behind the Change in EU and Saudi Competition Laws and Consumer Welfare Objective

Abstract

In the middle of the 1990s, the European Commission took a step towards changing its interpretation of Articles 101 and 102 TFEU. It intended to shift from a form-based approach to an effects-based approach and emphasize the protection of consumer welfare as the main objective of EU competition law. On the other hand, in Saudi Arabia, the Competition Law, which was introduced in 2004, was replaced with a new law in March 2019. This study aims to analyze the incentives that led both laws to change and examine whether the new Saudi Competition Law pursues the same consumer welfare objective of EU competition law. Based on a comparative analysis, this research was conducted to determine the incentives behind the change and evaluate its aims. Therefore, we could say that under EU competition law, consumer welfare has been the main reason behind incentivizing the Commission to shift to a more economic approach. Besides, the Commission was subject to several criticisms and economic school influences, which stimulated the change. Whereas, under Saudi Competition Law, the situation is no different from the EU competition law as it was driven by economic reasons. The new law was introduced to enhance the country’s economy and facilitate the application of the Saudi Vision 2030. However, Saudi Competition Law did not consider consumer welfare as the main objective of competition law. Instead, other objectives besides consumer welfare are identified in the law, which contradicts the effects-based approach.