The Competition and Anti-Monopoly Law and the Competition Council
Once a company exists, its activity may fall within the scope of Competition and Anti-Monopoly Law No. 14 of 2010. The general framework is on registering a company. The Law Office of Ali Barakat follows the question from Baghdad, al-Yarmouk.
The Council and the scope of the Law
Article 1 defines competition as the efforts made in pursuit of economic superiority, and monopoly as every act, agreement or understanding issued by one or more natural or legal persons, or by a person who intermediates between them, to control the selling rate or the quality of goods and services in a way that harms society. The Council, for the purposes of this Law, is the Council of Competition and Anti-Monopoly Affairs. The market, in the sense of this Law, is confined to the Iraqi economy.
The Law applies to production, trade and services carried on by natural or legal persons inside Iraq, and to any economic activities carried on outside Iraq that have effects inside it, under article 3, first paragraph. Excepted from that, under article 3, second paragraph, are decisions of the Ministry of Industry and Minerals and of the Ministry of Trade, under an authorisation from the Council of Ministers, fixing the selling rates of essential goods and services when an exceptional emergency arises, and for the period that emergency requires. The Law aims to regulate competition and to prevent monopolistic practices harmful to society, under article 2.
A council named the Council of Competition and Anti-Monopoly Affairs is formed. It has legal personality and financial and administrative independence, and is attached to the Prime Minister's Office, under article 4. It is chaired by a person working full-time at the rank of a deputy minister, and is composed of members representing the Ministry of Industry and Minerals, the Ministry of Trade and the Ministry of Communications, a member from the Central Organisation for Standardisation and Quality Control at the Ministry of Planning, members from the Federation of Chambers of Commerce and Industry, the Iraqi Federation of Industries, the Consumer Protection Council and the Iraqi Association of Accountants and Auditors, and a rapporteur appointed by the chair of the Council. The Council adopts its own rules of procedure. Its tasks include preparing the general plan, investigating practices that undermine the rules, conducting investigations into practices it uncovers or on the basis of complaints and reports or those a court assigns to it, issuing directions and a guide, and submitting a yearly report to the Council of Ministers, under article 7. The committees attached to it may, by authorising their staff, enter relevant shops, offices and companies during working hours and inspect documents, provided the staff disclose their identity and show the person concerned a copy of the written authorisation, under article 8.
Mergers and prohibited practices
Any merger between two or more companies, and any restricted commercial practice, is prohibited if the company, or a group of merged or connected companies, controls fifty per cent or more of the total production of a given good or service, or fifty per cent or more of the total sales of a given good or service, under article 9. The merger of companies under the Companies Law is a separate path, set out on its page when it is published. The prohibition in article 9 is read over that path where it applies.
Article 10 prohibits any practices or agreements, written or oral, that undermine, restrict or prevent competition and the prevention of monopoly, in particular: fixing the selling rates of goods or services or the conditions of sale; fixing quantities; sharing markets; obstructing the entry of undertakings into the market, excluding them or exposing them to serious losses, including selling at a loss; collusion in tenders or offers in a bid or an auction — with an exception for joint offers of which the parties inform one another from the outset, if the purpose is not unfair competition; discriminating between customers in similar contracts; compelling a customer not to deal with a competitor; refusing to deal without a legal justification; seeking to monopolise materials needed for a competitor's activity; and making a sale conditional on the purchase of another good or service. Article 11 also prohibits reselling a product in the same state for less than its true purchase cost plus taxes, duties and transport costs, if any, if the aim is to undermine fair competition, with an exception for perishable products and authorised reductions to wind up the business or renew stock.
The recording of certain agreements
Article 12 requires commercial agreements to be recorded with the Council or with any unit it forms, including agreements in which the parties agree on restrictions as to selling rates and conditions of sale, or on restrictions as to the quantities and types of goods and the persons and areas to be supplied, or which concern information the parties exchange about selling rates and costs. The Council is to decide the application within a period not exceeding thirty days. It may give a temporary preliminary approval, and may except certain agreements that it regards as being in the public interest or as leading to a reduction in selling rates. The Council is to refer the agreements to a court together with its recommendations. The text does not name the court to which the Council refers the agreements. The article also applies to companies that supply services. The sanctions in article 13 are read from the official text of that article.
The office follows a reading from Baghdad, al-Yarmouk.
Legal basis and sources
- Competition and Anti-Monopoly Law No. 14 of 2010 (Iraqi Legislation Database)
Frequently asked questions
What is the name of the body the Competition Law names?
The Council of Competition and Anti-Monopoly Affairs. It has legal personality and is attached to the Prime Minister's Office, under article 4.
When is a merger prohibited under article 9?
If the company, or the merged or connected group, controls fifty per cent or more of the total production of a given good or service, or of total sales of that good or service.
Does the Law apply to an activity carried on outside Iraq?
Yes, if it has effects inside Iraq, under article 3, first paragraph, subject to the exception in article 3, second paragraph, for decisions fixing the selling rates of essential goods in an emergency.
Related topics and articles
- 01Consumer protection and company advertisingConsumer protection and company advertising under Consumer Protection Law No. 1 of 2010 and the Consumer Protection Council.
- 02Merger of a company and transformation of its typeMerger and transformation under articles 148 to 157: when a merger is allowed, when it takes effect, and the limits on transforming into a simple company.
- 03Obligations that recur after a company is recordedFinal accounts, the audit, the general-assembly meeting and copies sent to the Registrar, distinct from post-incorporation steps and from branch duties.
- 04The address of a company or branch, a lease and a title deedThe company's address in its contract, before the Registrar and in the commercial register; a lease or deed may evidence it. Not a real-estate page.
- 05Registering a company in Basra: which department is approached, and what differs from Baghdad?Registering a company when dealing in Basra under the federal Companies Law, followed from Baghdad.