Competition Law in Palestine What You Need To Know – “Decree by Law No. 11 of 2025 Concerning Competition”

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: 

1. The parties involved hold a combined market share of less than 10%, and the agreement does not fix prices or divide markets.
2. 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.