Competition compliance is not confined to large corporations or major mergers. In the UAE, pricing decisions, distribution arrangements, supplier relationships and acquisitions may all raise competition concerns. Federal Decree-Law No. 36 of 2023 Regulating Competition (“Competition Law”) replaced Federal Law No. 4 of 2012, and it is further supplemented by Cabinet Resolution No. 3 of 2025, and Cabinet Decision No. 59 of 2026 (“Executive Regulations”).
The Competition Law applies to undertakings, meaning businesses, individuals and other entities carrying on economic activities in the UAE, regardless of their legal form. It also extends to conduct outside the UAE where they affect competition within the country, as well as the exploitation of intellectual property rights inside or outside the UAE.
It is administered by the Ministry of Economy and Tourism (“Ministry”), alongside emirate-level authorities and sectoral regulators within their respective remits. Exclusions are limited to sectors with their own competition legislation and government-owned entities, designated by Cabinet or local resolution.
The Competition Law prohibits agreements whose purpose or effect is to restrict, distort, lessen or prevent competition. The prohibited practices include:
The Competition Law prohibits a dominant undertaking from using its position in a manner that harms competition, for example by imposing resale prices, selling below cost to exclude rivals, discriminating between similar customers, refusing to deal without justification, tying unrelated products or denying access to essential infrastructure. An undertaking is presumed dominant where its market share, alone or jointly with others, exceeds 40% as prescribed under Cabinet Decision No. 3 of 2025. The Executive Regulations make clear, however, that dominance may also be established below that level by reference to financial strength, barriers to entry, customer dependence and exclusive relationships. Holding a strong market position is not itself prohibited but abusing it is.
The Competition Law also protects customers who have no viable alternative for marketing or supply: a supplier on whom such a customer depends may not impose resale prices, discriminate between similar customers, refuse to deal without justification or tie unrelated products, even where the supplier is not dominant.
Separately, predatory pricing is prohibited, meaning prices excessively below cost that are intended or likely to drive competitors from the market. The Executive Regulations introduce a cost-based test: prices below average variable cost are presumed predatory unless commercially justified, while prices between average variable and average total cost are predatory only where exclusionary intent is shown.
Introductory offers, seasonal promotions, stock clearance, price matching and genuine cost efficiencies are recognised justifications, so businesses should keep records supporting the commercial rationale behind their pricing.
The law provide for exemptions where agreements or practices promote economic development, improve efficiency or deliver identifiable benefits to consumers, provided the restrictions do not exceed what is necessary and do not eliminate competition in the relevant market.
Businesses seeking exemptions must submit the prescribed notification and supporting documents, and undertake not to implement the arrangement until the Minister decides. The decision is due within 90 days, extendable by 45 days and silence is treated as rejection. Approval may be conditional, time-limited or withdrawn where circumstances change and businesses should not assume an agreement is permissible merely because it produces commercial benefits.
Mergers, acquisitions and other transactions that transfer control over a business require the Ministry's approval at least 90 days before completion where the parties' combined annual sales in the relevant UAE market exceed AED 300 million or their combined market share exceeds 40%.
The Ministry may approve, approve subject to conditions or reject within 90 days, extendable by 45 days, with the period interrupted while additional information is sought and failure to decide in time is treated as rejection. Parties must not complete while the review is pending, and the Ministry may examine a notifiable transaction before or after it has closed.
Notification requirements should therefore be assessed early, not left until the intended completion date.
Competition Law prescribes substantial financial penalties for violations of its provisions, including:
Injured parties may also pursue claims for damages arising from violations. Competent authorities are empowered to investigate suspected infringements, while affected businesses have prescribed procedures for challenging regulatory decisions.
Note: This Legal update is intended for general informational purposes only and does not constitute legal advice. It is based on Federal Decree-Law No. 36 of 2023 and it’s implementing regulations. Laws and regulations are subject to change, and their application depends on the relevant circumstances. Readers should seek specific legal advice before acting on any information contained herein.
Scope and applicability
The Competition Law applies to undertakings, meaning businesses, individuals and other entities carrying on economic activities in the UAE, regardless of their legal form. It also extends to conduct outside the UAE where they affect competition within the country, as well as the exploitation of intellectual property rights inside or outside the UAE.It is administered by the Ministry of Economy and Tourism (“Ministry”), alongside emirate-level authorities and sectoral regulators within their respective remits. Exclusions are limited to sectors with their own competition legislation and government-owned entities, designated by Cabinet or local resolution.
Restrictive agreements and prohibited practices
The Competition Law prohibits agreements whose purpose or effect is to restrict, distort, lessen or prevent competition. The prohibited practices include:
- Price fixing: Agreements between businesses to directly or indirectly determine the selling or purchasing prices of goods or services contrary to the market price, in a manner that negatively affects competition.
- Collusive bidding: Coordinating bids or tender submissions to manipulate the outcome of competitive procurement processes.
- Market allocation: Agreements to divide markets, customers or geographic territories among competing businesses.
- Restrictions on production or distribution: Arrangements to limit production, supply, distribution or marketing activities.
- Collective refusal to deal: Agreements to collectively refuse to purchase from or supply particular businesses, or to prevent competitors from entering the market.
Abuse of dominant position
The Competition Law prohibits a dominant undertaking from using its position in a manner that harms competition, for example by imposing resale prices, selling below cost to exclude rivals, discriminating between similar customers, refusing to deal without justification, tying unrelated products or denying access to essential infrastructure. An undertaking is presumed dominant where its market share, alone or jointly with others, exceeds 40% as prescribed under Cabinet Decision No. 3 of 2025. The Executive Regulations make clear, however, that dominance may also be established below that level by reference to financial strength, barriers to entry, customer dependence and exclusive relationships. Holding a strong market position is not itself prohibited but abusing it is.
Economic dependence and predatory pricing
The Competition Law also protects customers who have no viable alternative for marketing or supply: a supplier on whom such a customer depends may not impose resale prices, discriminate between similar customers, refuse to deal without justification or tie unrelated products, even where the supplier is not dominant.Separately, predatory pricing is prohibited, meaning prices excessively below cost that are intended or likely to drive competitors from the market. The Executive Regulations introduce a cost-based test: prices below average variable cost are presumed predatory unless commercially justified, while prices between average variable and average total cost are predatory only where exclusionary intent is shown.
Introductory offers, seasonal promotions, stock clearance, price matching and genuine cost efficiencies are recognised justifications, so businesses should keep records supporting the commercial rationale behind their pricing.
Exemptions for certain agreements and practices
The law provide for exemptions where agreements or practices promote economic development, improve efficiency or deliver identifiable benefits to consumers, provided the restrictions do not exceed what is necessary and do not eliminate competition in the relevant market.Businesses seeking exemptions must submit the prescribed notification and supporting documents, and undertake not to implement the arrangement until the Minister decides. The decision is due within 90 days, extendable by 45 days and silence is treated as rejection. Approval may be conditional, time-limited or withdrawn where circumstances change and businesses should not assume an agreement is permissible merely because it produces commercial benefits.
Merger control and regulatory approval
Mergers, acquisitions and other transactions that transfer control over a business require the Ministry's approval at least 90 days before completion where the parties' combined annual sales in the relevant UAE market exceed AED 300 million or their combined market share exceeds 40%.The Ministry may approve, approve subject to conditions or reject within 90 days, extendable by 45 days, with the period interrupted while additional information is sought and failure to decide in time is treated as rejection. Parties must not complete while the review is pending, and the Ministry may examine a notifiable transaction before or after it has closed.
Notification requirements should therefore be assessed early, not left until the intended completion date.
Penalties and enforcement
Competition Law prescribes substantial financial penalties for violations of its provisions, including:
- Anti-competitive practices: Fines ranging from AED 100,000 to 10% of the offending business’s total annual sales in the UAE during the preceding financial year. Where annual sales cannot be calculated, fines range from AED 500,000 to AED 5 million.
- Failure to comply with merger notification requirements: Fines ranging from 2% to 10% of the relevant annual sales or service revenue, or AED 500,000 to AED 5 million where such revenue cannot be calculated.
- Obstruction of investigations: Fines ranging from AED 50,000 to AED 500,000 for preventing enforcement officers from performing their duties, withholding information or providing or destroying misleading information.
Injured parties may also pursue claims for damages arising from violations. Competent authorities are empowered to investigate suspected infringements, while affected businesses have prescribed procedures for challenging regulatory decisions.
Note: This Legal update is intended for general informational purposes only and does not constitute legal advice. It is based on Federal Decree-Law No. 36 of 2023 and it’s implementing regulations. Laws and regulations are subject to change, and their application depends on the relevant circumstances. Readers should seek specific legal advice before acting on any information contained herein.