The UAE has introduced a new competition law aimed at preventing companies from using very low prices to monopolize the market and drive out competitors. The law, outlined in Federal Decree-Law No. 36 of 2023, seeks to ensure fair competition and protect consumer interests by regulating economic activities and market mechanisms.
Under the new regulations, companies are prohibited from offering excessively low prices for production, transfer, and marketing if such practices are intended to eliminate competition. This law aims to foster a competitive market environment while safeguarding consumer rights and preventing monopolistic behaviors.
The Ministry of Economy will oversee the implementation of the law, working closely with local authorities to conduct inspections and ensure compliance. The ministry is also empowered to take action upon receiving complaints about unfair competitive practices.
During a media briefing, Abdullah Ahmed Al Saleh, Undersecretary of the Ministry of Economy, emphasized the law’s objectives. “The new law aims to combat monopolistic practices by ensuring a stimulating environment for enterprises, contributing to enhancing effectiveness, competitiveness, and protecting consumer interests,” he said. Al Saleh added that the law promotes economic freedom and efficiency, while monitoring economic concentration to prevent anti-competitive practices.
The law defines economic concentration as any act resulting in the transfer of ownership or control over an establishment, which could lead to a dominance of a small number of firms in an industry. It outlines conditions for mergers and acquisitions, taking into account the annual sales value and market share of the enterprises involved. To complete an economic concentration process, two conditions must be met: the total annual sales value of the establishments must exceed a threshold determined by the Cabinet, and their market share must surpass a specified percentage of total transactions in the relevant market.
Companies involved in mergers or acquisitions must submit their applications for economic concentration, including relevant documents and data, in accordance with the Executive Regulation of the law. The Ministry of Economy is open to receiving feedback and information from companies to aid in the evaluation of these applications, aligning with global best practices in competition regulation.
The new law also assigns additional responsibilities to the Competition Regulation Committee, which will propose policies for protecting competition and scrutinize issues related to the law’s application. The committee will make recommendations to ensure the law is effectively enforced.
Efforts are underway to develop a more agile and sustainable competitive system in the UAE. The government plans to introduce more pioneering legislation, initiatives, and programs to position the UAE as a global hub for the new economy over the next decade.
This comprehensive approach to competition regulation reflects the UAE’s commitment to maintaining a fair and dynamic market, fostering innovation, and protecting consumer interests in a rapidly evolving economic landscape.
