Constitutional Court strikes down revenue-based penalty clause in Competition Law

In a significant ruling, the Constitutional Court, presided over by Counselor Adel Al-Bahou, has declared Clause (5) of Article (34) of Law No. 72 of 2020 on Competition Protection unconstitutional.

The clause imposed a financial penalty of up to 1% of the violator’s total revenues from the previous fiscal year, regardless of the scale or impact of the violation, reports Al-Rai daily.

The court reasoned that this penalty structure lacks proportionality, as it is based on a company’s past revenues rather than the nature or severity of the alleged violation.

It noted that such an approach results in an arbitrary financial burden disconnected from the act committed, and could constitute an unlawful confiscation of funds.

The verdict found the clause in violation of Articles 16, 18, and 19 of the Constitution, which safeguard private property and ensure fairness in penalties.

The court upheld the rest of the contested articles in the law and rejected the appeal on those points.

Additionally, the Advisory Chamber of the Constitutional Court dismissed two separate appeals: one challenging the constitutionality of Law No. 125 of 2023 on real estate agencies, and another disputing Article (1/112) of Law No. 7 of 2010 concerning the finality of judgments by the Capital Markets Appeal Court, confirming that such rulings remain non-appealable.