UAE Competition Law: The Legal Framework

Federal Decree-Law No. 36 of 2023

The central federal legislation is Federal Decree-Law No. 36 of 2023
Regarding Regulating Competition. It became effective on 29 December 2023
and repealed Federal Law No. 4 of 2012, while preserving earlier implementing
regulations and decisions until replaced.

The Decree-Law regulates restrictive agreements, abuse of a dominant
position, abuse of economic dependence, predatory pricing and economic
concentrations that transfer direct or indirect control.

Its scope extends to economic activities conducted in the UAE, exploitation
of intellectual-property rights inside or outside the UAE and activities
conducted outside the country where they affect competition within the UAE.

Cabinet Resolution No. 3 of 2025

Cabinet Resolution No. 3 of 2025 established the numerical thresholds used
for dominance and economic-concentration notification.

The sales and market-share notification tests are alternatives. A transaction
may therefore require notification because of market share even where the
parties’ sales are below AED 300 million.

Cabinet Resolution No. 59 of 2026

Cabinet Resolution No. 59 of 2026 introduces detailed Executive Regulations
governing dominance analysis, predatory pricing, exemption applications,
economic-concentration filings, complaint procedures, confidentiality and
investigations.

It is scheduled to take effect on 30 July 2026 and to repeal Cabinet
Resolution No. 37 of 2014. Filings that cross this transition date should be
checked against the procedure and forms applicable on the submission date.

Federal, local and sectoral jurisdiction

A relevant local authority may consider a matter where all undertakings
concerned are located only in the same emirate and the competitive effect
does not extend beyond that emirate. Wider or cross-emirate effects require
assessment of the federal route.

Certain sectors may have specialised rules administered by sectoral
regulatory bodies. Government ownership, sector regulation or free-zone
incorporation should not be treated as an automatic exemption.

Mainland, free zones, DIFC and ADGM

The legislation focuses on economic activity and market effect rather than
legal form. Free-zone status alone is therefore not a complete safe harbour.

A DIFC or ADGM jurisdiction clause may govern contractual disputes, but it
does not automatically remove federal, local or sectoral competition issues.
Regulatory jurisdiction and contractual dispute jurisdiction should be
analysed separately.

Key Legal Concepts and Definitions

Undertaking

An undertaking is any person engaged in economic activity, regardless of
legal form. The definition may include companies, partnerships, branches,
commercial groups, professional businesses, platforms and associations.

Agreement

A competition-law agreement is broader than a signed contract. It can include
a written or verbal understanding, an implicit arrangement, confidential
coordination, informal cooperation or a decision made by a trade association.

Relevant market

The relevant product market includes goods or services that customers regard
as interchangeable or substitutable because of their price, characteristics
and intended use.

The relevant geographic market is the physical or digital area where supply
and demand meet under sufficiently similar competitive conditions.

Restrictive agreement

A restrictive agreement is one whose subject, purpose or effect is to distort,
lessen, prevent or restrict competition. Important examples include price
coordination, bid rigging, output restrictions, collective boycotts, market
sharing and customer allocation.

Horizontal and vertical arrangements

Horizontal arrangements are concluded between competitors. Vertical
arrangements involve businesses at different levels of the supply chain.

Vertical agreements may be legitimate, but resale prices, exclusivity,
non-compete obligations, tying and customer restrictions require careful
assessment.

Dominant position and abuse

Dominance means the ability to control or influence a relevant market.
Exceeding 40% establishes dominance under the numerical threshold, but market
influence may also be assessed through qualitative factors.

Dominance itself is not unlawful. Abuse may include discriminatory treatment,
exclusionary below-cost pricing, unjustified refusal to deal, coercive
exclusivity, tying, limiting production or denying access to essential
physical or digital infrastructure.

Abuse of economic dependence

The law also addresses circumstances in which a customer or supplier has no
realistic alternative for marketing or supply. This can be important where
a smaller business depends heavily on a major retailer, platform, supplier
or customer.

Predatory pricing

Predatory pricing involves excessively below-cost prices where the objective
or effect is to exclude a competitor, remove a product or prevent market entry.
Genuine discounts and efficient pricing are not automatically predatory.

Economic concentration

An economic concentration may include a merger, share acquisition, asset
acquisition, joint venture or another transaction transferring direct or
indirect control.

Who UAE Competition Law Applies To

UAE competition rules may affect mainland companies, free-zone entities,
foreign groups selling into the UAE, directors, shareholders, investors,
distributors, suppliers, retailers, platforms, trade associations and
professional businesses.

Sales and pricing teams

Sales teams should not discuss future prices, discounts, customers, output
or tender plans with competitors. Information should come from legitimate
public, customer or independent research sources.

Procurement and tender teams

Suppliers may be exposed through coordinated bidding, cover quotations,
bid rotation or agreements not to compete. Procurement organisations may
also be victims of these practices.

Distributors and retailers

Distribution networks require review of exclusivity, resale-price influence,
online-sales restrictions, minimum purchases, territorial rules and rebates.

Trade associations

Associations should use controlled agendas, legal guidance and properly
aggregated information so legitimate industry work does not become a forum
for competitor coordination.

Investors and transaction parties

Buyers, sellers, funds, shareholders and joint-venture partners should screen
UAE merger-control issues before signing and before sensitive due-diligence
information is exchanged.

Rights and Obligations of Businesses

Competitor contacts

Competitors must avoid coordinating prices, discounts, territories,
customers, supply, production, market entry or tender participation.

Dominant-company obligations

A dominant business may compete strongly and innovate, but its pricing,
rebates, access conditions, refusal-to-deal decisions and exclusivity
arrangements should be objectively justified and consistently applied.

Right to defend legitimate conduct

A company may demonstrate that no coordination existed, market definition is
incorrect, customers had alternatives, differential treatment reflected
different costs, refusal was objectively justified or the arrangement
produced proportionate efficiencies.

Exemption applications

An arrangement may qualify for exemption where it is necessary to improve
production, distribution, competitiveness or consumer benefit, provided it
does not impose unnecessary restrictions or eliminate competition.

Rights in merger review

Transaction parties may present market evidence, commercial rationale,
efficiencies, consumer benefits and proposed commitments. The authority may
approve, conditionally approve, reject or determine that notification is not
required.

Complaints and damages

Interested parties may submit complaints and injured parties may seek
compensation. A damages claim must establish unlawful conduct, loss,
causation and reliable quantification.

Competition Procedures in the UAE

Initial assessment

The first step is to identify the parties, economic group, relevant products,
geographic market, competitive relationship, market shares, jurisdiction and
possible restrictions.

Document review

Agreements, drafts, side letters, emails, messages, pricing data, tender
documents, market studies and internal presentations should be reviewed
together.

Complaint procedure

Under the new Executive Regulations scheduled for 30 July 2026, a complaint
should identify the parties, practices, facts, legal provisions, evidence,
actual or potential harm, requested relief and any parallel proceedings.

The scheduled procedure provides for formal examination, an opportunity to
provide missing documents, notice to the respondent and an investigation
period subject to the prescribed extensions.

Investigation

The authority may request contracts, electronic communications, sales data,
cost information, market calculations, corporate records and employee
explanations.

Economic-concentration filing

A notifiable transaction must be submitted at least 90 days before completion.
The statutory decision period is 90 days from receipt of a complete
application, with a possible 45-day extension and possible interruption of
the review clock.

The parties must not complete the concentration during review. Transaction
documents should include appropriate clearance conditions and sufficient
long-stop periods.

Documents under the new Executive Regulations

From 30 July 2026, the scheduled filing package includes corporate documents,
licences, the transaction agreement, three years of audited financial
statements, ownership information, market studies, sales data, competitor
and customer information, consumer-impact analysis and proposed commitments.

Administrative complaint and court challenge

A stakeholder may submit a written complaint against a decision within
15 working days of notification. The complaint should be decided within
30 days. A dismissal may then be challenged before the competent court
within the statutory period after the mandatory administrative stage.

Required Documents and Evidence

Agreements and transaction documents

• Distribution, supply, agency and franchise agreements
• Exclusivity, non-compete and rebate terms
• Tender submissions and joint-bidding documents
• Merger, acquisition and joint-venture agreements
• Shareholder and governance documents
• Draft agreements and negotiation correspondence

Communications

• Emails and internal chat records
• WhatsApp and text messages used for business
• Trade-association meeting minutes
• Call notes and internal memoranda
• Communications with competitors, distributors and customers

Pricing and cost data

• Transaction-level sales records
• Discount and rebate approvals
• Production, marketing and distribution costs
• Margin analyses and promotional budgets
• Records showing the source of competitor information

Market evidence

• Customer switching information
• Competitor and customer lists
• Industry and market reports
• Capacity, import and tender data
• Entry barriers, network effects and switching costs
• Evidence of customer or supplier alternatives

Confidentiality

Confidential material should be clearly identified and, where required,
accompanied by a meaningful non-confidential summary. Confidentiality claims
should be targeted and legally justified.

Common Misunderstandings

“There is no signed contract”

A verbal or implicit understanding may still constitute an agreement for
competition purposes.

“We only discussed the market”

Discussions of future prices, customers, production or tender strategy may
reduce competitive uncertainty and support an inference of coordination.

“Recommended resale prices are always safe”

Risk increases where the supplier monitors adherence, threatens penalties,
restricts supply or links rebates to compliance.

“Exclusivity is always illegal”

Exclusivity is assessed according to duration, market coverage, alternatives,
necessity and competitive effect.

“Dominance is prohibited”

Dominance itself is lawful. Abuse of dominance is prohibited.

“Below 40% means no risk”

The ability to influence the market may still be relevant even below the
numerical threshold.

“AED 300 million is the only merger test”

The alternative 40% market-share test may capture smaller transactions.

“Foreign and free-zone companies are exempt”

Conduct may be caught where it affects competition in the UAE. Incorporation
location alone is not decisive.

“A private settlement ends the case”

Regulatory interest may continue where conduct affects the market or
consumers.

Common Mistakes to Avoid

• Discussing future prices during association meetings
• Using competitor messaging groups for sensitive topics
• Imposing resale prices through indirect commercial pressure
• Drafting exclusivity provisions more broadly than necessary
• Assuming a general business justification is a complete defence
• Leaving merger-control review until after signing
• Exchanging current customer-level information during due diligence
• Beginning integration before approval
• Submitting incomplete or misleading data
• Deleting communications after a complaint or investigation
• Ignoring an authority request or legal deadline

Practical UAE Competition-Law Examples

Legal Risks and Consequences

Merger-control penalties

Notification violations may attract fines calculated at 2% to 10% of the
relevant annual UAE sales or service revenue. Where the amount cannot be
calculated, a fixed statutory range applies.

Separate fines may apply to breach of the standstill obligation while the
concentration is under review.

Obstruction and misleading information

Withholding information, providing misleading data, destroying relevant
evidence or obstructing authorised employees may create separate liability.

Closure, publication and damages

The court may order temporary closure and publication of a conviction.
Injured parties may also pursue compensation for provable loss.

Transaction and reputational consequences

Competition issues may delay closing, disrupt financing, trigger transaction
termination rights, require remedies and damage relationships with customers,
investors and regulators.

How a Lawyer Evaluates the Matter

Jurisdiction and applicable law

The lawyer identifies the federal, local, sectoral and contractual forum and
verifies the legislation and procedure applicable on the relevant date.

Market definition

Products, substitutes, customer groups, geographic scope and digital channels
are analysed before market shares or dominance conclusions are accepted.

Competitive relationship

The lawyer determines whether the parties are competitors, potential
competitors, supplier and customer, platform and merchant or members of the
same economic group.

Evidence strength

Communications, drafts, conduct, financial data, witness accounts and economic
evidence are tested for consistency and credibility.

Market power and dependence

Market share, entry barriers, network effects, customer alternatives,
switching costs and access to infrastructure are assessed together.

Objective justification

The lawyer determines whether the restriction is necessary and proportionate
to an identifiable commercial or regulatory purpose.

Procedure and commercial impact

Exemption, complaint, defence, settlement, merger commitments, urgent relief
and litigation are considered against cost, timing, customer relationships
and the client’s commercial objectives.

How a Lawyer Builds a Stronger Legal Position

• Reviewing agreements before they are signed
• Redrafting resale, exclusivity and access provisions
• Implementing practical competition policies
• Training sales, procurement and transaction teams
• Screening mergers and joint ventures early
• Creating clean-team and data-room protocols
• Issuing document-preservation notices
• Organising evidence into a clear chronology
• Preparing legally and economically supported submissions
• Coordinating accountants, economists and industry experts
• Designing proportionate merger remedies and commitments

Settlement vs Litigation

Settlement may preserve commercial relationships, control cost and resolve
restrictive contractual provisions more quickly than litigation.

Possible solutions include revising exclusivity, adopting objective supply
criteria, removing resale-price controls, restoring access, changing rebate
structures or paying compensation.

Private settlement does not necessarily end regulatory interest. An authority
may continue where conduct affects the wider market.

Litigation or a formal complaint may be necessary where harmful conduct
continues, damages are substantial, evidence may be lost, urgent suspension
is required or an administrative decision must be challenged.

When Urgent Legal Action May Be Needed

• A competitor proposes discussing prices, customers or tenders
• An employee has exchanged competitively sensitive information
• An authority notice or information request is received
• Records may be deleted or key employees may leave
• A notifiable transaction is approaching closing
• Integration has started before competition clearance
• A dominant supplier or platform threatens immediate exclusion
• Potential predatory pricing is causing market exit
• A significant exclusivity agreement is being renewed
• An administrative or court deadline is approaching

Frequently Asked Questions

Conclusion

UAE competition law reaches pricing discussions, tender conduct, distribution
structures, exclusivity, rebates, platform access, below-cost pricing, market
power and transactions transferring control.

The most serious risks often begin as routine commercial decisions. Early
legal analysis can separate legitimate competition from unlawful coordination,
identify filing requirements and ensure that evidence and transaction
timetables are managed correctly.

Businesses should also prepare for the procedural transition on 30 July 2026.
A strong UAE competition-law strategy is preventive, evidence-based and
commercially informed.