The UAE Announces  New Competition Law

The UAE has introduced a new competition law aimed at prohibiting firms from offering 'very low' prices with a monopolistic intent to drive out competitors. This legislation stipulates that economic activities should adhere to market principles without adversely affecting trade, development, or consumer interests. The law aims to promote equitable competition, prevent monopolistic practices, and safeguard consumer rights.

The new law, Federal Decree-Law No. 36 of 2023 on competition regulation, was unveiled during a media briefing. This law governs mergers and acquisitions within the domestic market, ensuring they do not negatively impact competition.

Key Objectives and Provisions:

  • Promote Fair Competition: The law ensures economic activities are conducted fairly, preventing monopolistic practices and protecting consumer interests

  • Monitor Mergers and Acquisitions: Economic concentration, defined as the dominance of a few firms within an industry, will be regulated. The law addresses complete or partial transfers (mergers or acquisitions) of ownership or control among establishments.
  • Annual Sales Value Consideration: The law considers the annual sales value of enterprises, not just their market share, in the economic concentration process.
  • Conditions for Economic Concentration: Two conditions must be met for economic concentration:
      1. Total annual sales value of the establishments in the relevant market for the last fiscal year must exceed an amount set by the Cabinet.
      2. Total market share of these establishments must surpass a certain percentage of total transactions in the relevant market during the last fiscal year.
        

Enforcement and Monitoring:

  • Ministry Oversight: The Ministry of Economy will monitor and collaborate with local authorities to ensure fair competitive practices. They will also act on complaints received.
  • Fines and Penalties: The fines and penalties for non-compliance are under review and will be released once approved by the Cabinet.

Competition Regulation Committee:

  • The law delegates new responsibilities to the Competition Regulation Committee, including proposing competition protection policies, examining issues related to the law’s implementation, and making recommendations.

Feedback and Future Developments:

  • Company Feedback: Companies are invited to submit their feedback on the Application for Economic Concentration project and provide any relevant data or information.
  • Developing a Competitive System: Efforts are focused on creating a more agile and sustainable competitive system. This includes pioneering legislation, initiatives, and programs to establish the UAE as a global hub for the new economy within the next decade.

Statements from Officials:

Abdullah Ahmed Al Saleh, Undersecretary of the Ministry of Economy, emphasized the law's role in combating monopolistic practices and ensuring a stimulating environment for enterprises. He highlighted the law’s goals of promoting economic efficiency, marketing, R&D, and consumer protection.

The Executive Regulation of this law will provide guidelines for submitting economic concentration applications, the necessary documentation, and review mechanisms.


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