File Photo: Egypt s parliament during a session. Al-Ahram
The Speaker of the House Hanafy El-Gebaly told MPs on Monday that the amendments were put up for a debate only after the House's Legislative and Constitutional Affairs Committee made sure that they were consistent with the constitution and did not contradict any other laws.
El-Gebaly said that the amendments would be put up for a final vote in an upcoming session.
According to a 31-page report prepared by the House's Economic Affairs Committee, the amendments aim to give the Egyptian Competition Authority (ECA) greater powers to exert prior control over economic concentration transactions to make sure that they will not harm free competition on the market.
"This means that economic businesses should notify the ECA in advance of any economic concentration transactions – primarily mergers and acquisitions – they aim to conclude and that ECA will have the right to approve or reject these transactions," said the report.
The existing law gives ECA the power to reject or approve mergers and acquisitions, but only after a transaction is concluded.
The amendments stipulate that investors intending to conclude economic concentration transactions must notify the ECA and what fees they should pay.
They also reduce the fee for investigating an economic transaction from EGP one million to EGP 100,000.
Chairman of the House's Economic Affairs Committee Mohamed Soliman said "the amendments come at the right time as Egypt is still one of few countries whose competition law that does not exercise a prior control on "economic concentration deals."
"There are 135 countries which have competition laws that target harmful monopolistic practices, not to mention that international lending institutions like the IMF and World Bank always recommend that countries draft competition laws that can safeguard their markets against monopolistic practices," said Soliman.
The bill also imposes fines on investors who fail to notify the ECA in advance of their plans to conclude economic concentration transactions, violate the ECA's final decision or submit false information. The fine will be no less than one percent and no more than 10 percent of the value of their annual business operations, or no less than EGP 30 million and no more than EGP 500 million.
MPs Ahmed El-Sharkawy and Mahmoud Badr said penalties imposed on monopolists should be toughened to include prison sentences.
"It is ludicrous to impose a fine of EGP 10 million on a monopolist who manipulated the market to earn billions of pounds in illegal profits," said Badr.
MP Mostafa Bakri said "as long as we will move to a full-fledged market economy, laws should be toughened to be able to control "capitalists who do not believe in social protection programmes."
However, MP Mohamed Abul-Enein, who is a prominent businessman said the amendments are a progressive step and will help improve the investment climate in Egypt.
"The amendments are in line with the State Ownership Policy Document which will make the private sector a major player in Egypt's national economy," said Abul-Enein.
"The coming period could see a lot of mergers and acquisitions on the market and so the amendments come at the right time to make sure that these economic concentration deals do not violate competition rules," he added.