Competition Law in Palestine What You Need To Know – “Decree by Law No. 11 of 2025 Concerning Competition”
Table of Contents
Overview of Decree by Law No. 11 of 2025
On May 27, 2025, Palestine officially published Decree by Law No. 11 of 2025 on Competition, marking the country’s first legal framework dedicated to competition regulation. Designed to promote fair competition, curb monopolistic practices, and safeguard consumers and other market participants, the law has broad territorial reach. It applies to any agreement, profession, occupation, or economic activity conducted within Palestine, as well as to those outside its borders that may prevent, restrict, or distort competition in the domestic market. Notably, the law exempts state-run public utilities that do not operate for profit.
This law marks a significant step toward aligning Palestinian market regulation with international standards, providing clearer guidance on permissible business practices, and establishing enforcement mechanisms to deter anti-competitive behavior. This development falls under our expertise in Legislative & Public Policy Review.
What is Decree by Law No. 11 of 2025?
Decree by Law No. 11 of 2025 seeks to promote fair competition and market transparency, prevent anti-competitive practices that harm consumers, and protect small and medium-sized enterprises from the abuse of market dominance. The law emphasizes the role of supply and demand in price setting; however, in exceptional or seasonal circumstances, the Council of Ministers may, upon the recommendation of the Competition Committee, set or cap the prices of specific goods for a period not exceeding six months.
To support these objectives, the law establishes a Competition Committee, chaired by the Minister of National Economy and comprising representatives from key ministries and sector-specific bodies. Enforcement responsibilities lie with the General Directorate of Competition, which is tasked with conducting investigations, reviewing merger and acquisition applications, and monitoring market practices.
Core concepts under the law:
Competition: Defined as the dynamic process by which companies compete to offer better products and services at more attractive prices. Effective competition drives innovation, efficiency, and consumer benefit.
Agreements: Refer to any arrangement between two or more companies, whether written or oral, that aim to influence competition in the market. Agreements fall into two categories:
- Horizontal agreements between two competitors at the same level (such as two manufacturers)
- Vertical agreements between businesses at different levels of the supply chain (manufacturer and distributor)
Certain agreements are prohibited, including those that fix prices, divide markets, restrict supply, or rig bids. Joint participation in tenders is permitted if it is announced in advance and not aimed at restricting competition. Exceptions may apply if:
- The parties involved hold a combined market share of less than 10%, and the agreement does not fix prices or divide markets.
- The agreement’s pro-competitive effects outweigh its anti-competitive impact, subject to prior written approval from the Directorate.
Dominant Position: A company is considered dominant when it can materially influence prices, supply, or market conditions. While a market share above 35% typically indicates dominance, companies with a lower share may also be deemed dominant if their conduct substantially affects competition.
Economic Concentration: Economic concentration includes mergers, acquisitions, or joint ventures involving the transfer of control or assets. Such transactions must be notified to and approved by the General Directorate of Competition. Requirements under this concept include:
- Acquiring prior approval required from the General Directorate of Competition before any action is taken.
- Filing the notification within 60 days of signing the concentration agreement.
- Publication of a public summary, with a 30-day window for objections.
- A standard review period of 45 days, extendable once for an additional 45 days.
- Minimum capital for the resulting entity: $150,000 USD.
Enforcement, Penalties, and Appeals
Violations of the law carry significant financial and legal consequences. Companies may face fines ranging from 5–20% of the annual turnover linked to the affected product, or between $15,000 and $150,000 if turnover cannot be determined. Additional penalties apply for misleading information in merger filings, unauthorized mergers, disclosure of confidential information, or obstructing investigations, with repeat offenders subject to doubled fines.
Affected parties can submit complaints to the General Directorate of Competition, which may also act on its own initiative. Grievances may be filed within 15 working days of a decision. The Directorate must respond within 30 working days. Appeals may then be made to the Administrative Court within 30 working days.
Implications for the Local Market in Palestine
For Palestinian companies, the Competition Law ushers in a new era of regulatory oversight. Large enterprises and dominant market players must now reassess their pricing strategies, distribution models, and exclusivity agreements to avoid practices that could be classified as abuse of dominance. The legislation specifically prohibits practices such as creating artificial shortages, applying discriminatory pricing to disadvantage competitors, or tying unrelated products and services together in a manner that restricts consumer choice. For SMEs, as well as startups, the law is expected to open new opportunities by dismantling exclusionary tactics and reducing structural barriers to market entry.
At the structural level, the law also introduces stricter merger controls, ones which require prior written approval for transactions that could materially affect competition in the Palestinian market.This will require businesses to account for regulatory timeframes and review processes into their strategic planning. In light of these requirements, companies will benefit from experienced legal guidance. Kurdi & Co. supports clients in reviewing agreements, evaluating dominance risks, and guiding businesses through the merger approval process. Contact our team to ensure your transactions are in full compliance with the law.
Implications for International Companies Operating in Palestine
The reach of the Competition Law extends well beyond Palestine’s borders, as foreign companies whose operations impact competition within the Palestinian market are also subject to its provisions. The has direct implications for international franchisors, distributors, and brand owners with Palestinian operations or partners. This extraterritorial jurisdiction means that multinational businesses cannot treat Palestinian competition compliance as an afterthought. Rather, it must be integrated into global transaction planning and contractual negotiations from the outset.
Preparing for Compliance: Advice from Kurdi & Co’s Team
To operate lawfully and efficiently under the new law, companies will need to make both structural and procedural adjustments. Our lawyers recommend the following steps:
- Review existing agreements: pay close attention to clauses on exclusivity, pricing, and market allocation, as these are high-risk areas under the law.
- Assess market behavior: businesses with significant market share must evaluate whether their practices could be interpreted as abusive and take proactive measures to reduce risk.
- Plan for M&A activity: transactions that involve a change of control must be filed within 60 days of signing, and approval must be obtained before implementation. Providing inaccurate or incomplete information during this process can result in revoked approvals and substantial penalties.
- Strengthen internal systems: conduct regular compliance audits, update corporate policies to reflect prohibited conduct, and provide targeted training for management and staff.
- Engage legal counsel early on: particularly when structuring partnerships, joint ventures, or distribution networks that could trigger competition law concerns.
Kurdi & Co.’s Role in Competition Law Advisory
The Palestinian Competition Law of 2025 is quite a transformative development. It sets new standards for market fairness, curbs abuse of dominance, and opens the door to greater transparency and accountability. However, navigating this evolving legal landscape requires both legal expertise and a deep understanding of sector-specific market dynamics, a combination that Kurdi & Co. confidently delivers. We advise and support domestic and international clients in reviewing contracts, obtaining approvals for mergers and other concentrations, and representing them before the General Directorate of Competition. Our team also designs tailored compliance strategies that reduce exposure to potential enforcement actions.
Contact Kurdi & Co. to develop a competition law compliance plan that protects your business and safeguards your operations in Palestine’s evolving regulatory landscape. You can reach us at info@kurdilaw.ps or call us at +970 (0)2-2425460.
FAQs:
Any profit-seeking agreement or conduct that may restrict, prevent, or distort competition in Palestinian markets. This includes price-fixing, bid-rigging, market allocation, and exclusive arrangements, even if the conduct takes place outside Palestine but affects the local market.
Yes, if the transaction leads to economic concentration (such as control, joint ventures, or share acquisitions). Notification to the Competition Directorate is mandatory before completion. Failing to notify can lead to penalties and invalidation of the transaction.
No, dominance is not illegal, but abusing that position is. Practices such as predatory pricing, tying products, or refusing to supply may be investigated and penalized if found to restrict competition.
Yes. The law applies to any conduct that affects the Palestinian market, regardless of where the company is based. Foreign entities with local distributors, resellers, or service providers should assess compliance.
Yes. The six-month period before the law enters into force serves as a grace period for companies to bring operations into compliance.
Yes. Certain agreements may be exempt if: the parties’ combined market share is less than 10% or the agreement produces net benefits to consumers. However, written approval from the Competition Directorate is required before relying on an exemption.
Violations of Articles 15, 16, 18, or 21 carry significant penalties:
- A fine of 5–20% of annual turnover derived from the product concerned, or
- Between $15,000 and $150,000 USD if turnover cannot be determined.
Additional penalties apply in specific circumstances:
- Misleading information in merger applications: $1,500–15,000 USD.
- Implementing mergers without approval: $15,000–75,000 USD.
- Disclosure of confidential information: $3,000–30,000 USD.
- Obstructing investigations: fines or imprisonment of 1–3 years.
- Repeat offenders face doubled penalties.
- Review existing agreements (especially those with exclusivity or pricing clauses).
- Assess market share and merger plans for potential filing requirements.
- Seek legal advice early on.
Amer Kurdi
Lawyer
Sindy Al khateeb
Lawyer
