Ahram Online also discussed with Momtaz the mechanisms through which ECA applies the Competition Law and the authority’s main objectives.
The interview also highlighted the modifications ECA made in its approach to reviewing economic concentrations and its role in ensuring competitive neutrality among domestic and foreign companies.
Economic concentration refers to the degree to which a small number of companies or entities dominate a particular industry or market.
Ahram Online: The ECA has recently approved the Abu Dhabi Developmental Holding Company's (ADQ) acquisition of 25 percent of the Egyptian Drilling Company's shares. How do you explain this approval, which states that the acquiring party can have a material influence on the target company?
Mahmoud Momtaz: According to the Competition Protection Law, the authority oversees deals that result in a change in control or material influence over the target company.
Influence has less effect than control, where the acquirer can affect the target company's strategic decisions, business objectives, and competitive behaviour.
Competition protection authorities worldwide, particularly in Germany, the UK, and India, have also adopted the "physical influence" concept.
Practical experience has shown that acquiring minor, non-controlling stakes that give physical influence can positively affect market competition, especially when the involved parties are competitors.
AO: What is ECA's key mission in supporting the Egyptian economy? And what are its main areas of work?
MM: ECA works to enhance the efficiency of the national economy and improve the business environment by removing barriers to market entry and expansion. This creates a free competitive environment, increases market size, and boosts investor confidence.
Our ultimate goal is to ensure consumer welfare by guaranteeing access to the best goods and services at the most competitive prices, leading to national economic growth.
We are working based on the best international practices and have developed a strategic plan for 2021-2025 aligned with Egypt's Vision 2030 for sustainable development.
This plan focuses on four key pillars: effective law enforcement, reducing restrictive policies, promoting a competition culture, and enhancing the authority's institutional capacity.
Moreover, we continue to monitor and combat anti-competitive practices, particularly in sectors that directly impact citizens, such as health, education, and food.
ECA also recognizes the importance of investing in human resources. We ensure our staff receive the necessary training and stay updated on the latest technological tools.
We also encourage active participation in international and regional events to inform them of the latest competition law trends and policies.
Additionally, we continuously adjust our organizational structure to meet the demands of our work.
Furthermore, ECA promotes competition awareness through workshops, seminars, and conferences, targeting business communities, government entities, and universities.
AO: Could you update us on the authority’s role in overseeing economic concentrations?
MM: In 2024, the authority exercised its role in overseeing economic concentrations, following the implementation of the executive regulations and the law.
It held several workshops with market stakeholders to train them on the new system and issued guidelines in both Arabic and English.
We also set up an email address to promptly respond to inquiries and ensure strict compliance with legal timelines, making it easier to apply the new system without major issues.
This has positively affected the investment climate, enhanced legal certainty, and strengthened investor confidence.
AO: What is the competitive neutrality policy, and how is it applied?
MM: The competitive neutrality policy ensures that all companies in the market — whether local private companies, foreign companies, or state-owned companies — compete on equal terms under the same regulatory framework, without discrimination.
Investors can report any legislation or decisions that may harm competition. The authority will then examine these issues and refer them to the Higher Committee for Competitive Neutrality, chaired by the prime minister, to make decisions accordingly.
AO: How does the authority support Egypt's investment climate?
MM: ECA plays a significant role in supporting Egypt's investment climate.
Whether a small or medium-sized company is facing anti-competitive practices or a company trying to enter the market but facing barriers, our role is to remove any obstacles to market entry or expansion, ensuring that the market is competitive and free.
The pre-approval system for economic concentrations aims to ease barriers to entry and expansion, create a competitive environment in various sectors, and enhance the effectiveness of the law.
This, in turn, attracts foreign and local investments, diversifies the economy, encourages small and medium-sized enterprises, and boosts consumer welfare, leading to job creation and economic growth.
These efforts positively affected regional and international levels, improving Egypt's position in international reports on competition policies.
Recently, the UN Economic and Social Commission for Western Asia (ESCWA) report has shown that Egypt's status improved from "weak" and "moderate" to "very strong," especially in areas such as law enforcement, competitive neutrality, and merger and acquisition pre-approval.
AO: Foreign companies have been approved to acquire Egyptian companies. What steps does the authority follow to approve acquisition decisions, and how does the Egyptian economy benefit from this?
MM: The authority does not differentiate between acquiring companies, whether Egyptian, foreign, state-owned, or private, as the law ensures competitive neutrality.
Mergers and acquisitions are positive because they lead to successful economic activities. However, we focus on ensuring that they do not harm market economies.
We assess whether the deal impacts market competition vertically or horizontally. We strive for solutions where the economic benefits outweigh the negatives, leading to unconditional approval of the merger or acquisition.
If we identify many negatives, we may address them through administrative measures. Generally, 90 to 95 percent of mergers and acquisitions are approved unconditionally; five to seven percent are approved with conditions; and two percent may be rejected.
AO: What are the key findings from the voluntary peer review report in collaboration with the UN Conference on Trade and Development (UNCTAD)?
MM: The report praised the authority's efforts and development and Egypt’s steps to support competition policies and neutrality.
Egypt is considered the leading country in the Arab world regarding competition protection. The report also included some recommendations based on best international practices.
AO: Based on the latest acquisition deals ECA has greenlighted, which sectors are most attractive to foreign investors?
MM: All sectors are attractive to foreign investors, mainly health, education, petroleum, and food.
AO: What role does the UNCTAD training centre play in the Middle East and Africa?
MM: The centre was established in 2018 for the Middle East and North Africa region. In 2022, a new memorandum of understanding was signed to extend coverage to Africa.
The centre trains competition protection staff in the Middle East and Africa and supports countries in their efforts to standardize competition policy concepts in the region.
AO: What are the key statistics regarding ECA market activity in 2024?
MM: Over the year, the authority's board of directors made decisions in 429 cases across various sectors, an increase of 14 percent from 2023.
The healthcare sector accounted for the largest share, followed by education.
The food sector saw a 320 percent increase compared to 2023, and the electronics and electrical appliances sector saw a 333 percent increase.
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