The Saudi Stock Exchange, also known as the Tadawul, in Riyadh. Image Credit: File photo

Businesses manipulating the prices of products in the Saudi market by exploiting the repercussions of the coronavirus outbreak may face a fine of up to SR10 million, Saudi Arabic daily Okaz reported on Monday.

Saudi Arabia’s Public Prosecution warned commercial, agricultural, industrial and service businesses against scaling up the prices of products and services, in light of the growing demand for hygiene products and consumer materials over coronavirus fears.

“All businesses operating in the commercial, agricultural, industrial and service sectors are forbidden from taking advantage of temporary repercussions, global events or exceptional situations by carrying out fabricated practices that create misleading impression among the public that there is a shortage of goods or services in the Saudi market, with the intention to control prices,” the Public Prosecution said.

Under the Saudi Competition Law, selling products or services at a price less than its total cost with the intent to cause major loses to other competitors in the local market, or reducing available quantities of products are considered among monopolistic practices.

The law also considers manipulating the supply of products to control the prices and imply unreal abundance or deficit among monopolistic practices that are punishable.

Businesses are prohibited from exploiting any situation or event to undermine or limit competition in the market. Whoever violates any of the provisions of the law will be punished by a fine not exceeding 10 per cent of the value of total annual sales of products that are the subject of violation, or by a fine of up to SR10 million, if it is impossible to estimate the annual sales.

The law prevents the practices of monopoly and exploitation of markets to breach the competition system. And hence, pharmacies or hypermarkets that increase the prices of face masks or hand sanitizers amid fears of coronavirus are exposed to the penalties stipulated in the law.

Lawyer Saleh Misfer Al Ghamdi said the Public Prosecution assumes its responsibility of implementing the law and combating all forms of blackmailing and exploitation in times of crises.

The competition law aims to improve the efficiency of markets and create a competitive business environment within the framework of fairness and transparency,” Al Ghamdi said.