U.A.E. being a business hub and highly competitive environment, a strict, accountable competition law is very important to avoid abuse in any form. Competition can be defined as conducting business or economic activities according to market conditions without affecting consumers or development and restricting trade. It is very important to have a market with fair competition for the overall sustainable development of the economy.

Competition law is regulated by the Ministry of Economy & Tourism by implementing competition policies and coordinating with competent authorities. It aims to prevent anti-competitive practices like abuse of dominant power, restrictive agreements, and economic concentration. The Federal Law No. (36) of 2023 on the Regulation of Competition is the most important federal law that regulates and promotes fair competition and prevents monopoly.

Restrictive Agreements

These are agreements that unfairly restrict or prevent corruption in the market. When companies work together secretly instead of competing fairly.

The main examples of restrictive agreements are:

  1. Agreeing to sell a specific product for the same price.
  2. Deciding unfair terms for sale, purchase or service conditions.
  3. Colluding during tenders, auctions, or bids to manipulate results.
  4. The production, supply, distribution, or marketing being limited in order to control the market.
  5. Agreeing together to refuse to buy from a particular business to block its operations.
  6. Restricting the free movement of goods and services, including unlawful hoarding or artificial shortages to increase prices.

These agreements are illegal because they restrict competition, consumer choices and leads to unfair monopolistic practises.

Abuse of dominant position

Dominate position is defined under article one of the federal laws which states that it is a position that an undertaking holds which makes it individually or in collaboration with other companies makes it possible for them to control the relevant market. A dominant position being enjoyed by a company is not illegal its only when the position is being abused it becomes illegal.

Acts Considered as Abuse of Dominance

  1. A dominant company cannot control the prices or resale terms.
  2. Predatory pricing which is when the dominant company reduces the prices tool low that it forces competitors to go out of the market. It is specifically mention under the article 8 of the federal law.
  3. Treating similar customers differently without valid reason, such as charging different prices unfairly.
  4. Making customers avoid or stop dealing with competing businesses.
  5. Refusing to enter normal business transactions without a valid reason.
  6. Making a customer accept extra unrelated goods or services as a condition for the main contract.
  7. Intentionally spreading incorrect information about products or prices to harm competition.
  8. Reducing or increasing product supply intentionally to manipulate market prices.
  9. Restricting production, market access, or technological development to block competition.
  10. Preventing other businesses from accessing important private networks, facilities, or digital infrastructure that are necessary to operate in the market.

Abuse of Economic Dependence happens when one business becomes too dependent on another business for supply, distribution, or sales, and the stronger business takes unfair advantage of that dependence. It is mentioned in article 7 of the federal law.

Economic Concentration

This happens in situations where businesses combine in a way that it affects the competition in the market. This happens usually when the competition creates or strengthens a dominant position.

If the business combining results in a change un the market situation then the businesses involved must apply to the Ministry at least 90 days before completing the transaction if either of the following applies:

  1. Annual Sales Threshold – if the total annual sale value of the businesses involved in the relevant market exceeds the threshold set by the UAE Cabinet.
  2. Market Share Threshold – If the combined market share of the businesses involved in the relevant market is above the percentage of total market transactions set by the UAE Cabinet.

Penalties

The penalties imposed under Federal Decree-Law No. 36 of 2023 are :

  1. Prohibited agreement or abuse of dominance, Abuse of economic dependency and predatory pricing – Fine of AED 100,000 to 10% of annual UAE total sales. If total sales cannot be determined: AED 500,000 to AED 5,000,000
  2. Violation of Economic Concentration Rules – Fine between 2% and 10% of annual sales or service revenue related to the violation
  3. If the merger is completed before approval – Fine between AED 50,000 and AED 500,000
  4. Obstructing the Competition Regulation Committee’s investigation, withholding information, providing misleading data, or destroying evidence – Fine of AED 50,000 to AED 500,000
  5. Establishment closure – Closure for up to 6 months
  6. Compensation Claims – Affected parties can also file a civil claim for damages and compensation.

The UAE’s Competition Law, as strengthened by Federal Decree-Law No. 36 of 2023, reflects the country’s commitment to ensuring a transparent, fair, and efficient market economy. By clearly regulating restrictive agreements, abuse of dominance, and economic concentration, the law seeks to prevent anti-competitive conduct and protect consumer welfare while encouraging healthy business growth. The introduction of stricter penalties and enhanced regulatory oversight further reinforces compliance and deters market abuse.

Our team at Ayesha Al Dhaheri Advocates and Legal Consultants provides focused legal support in cases involving false complaints, malicious prosecution, and abuse of legal proceedings under UAE law. We assist clients with both defence and compensation claims arising from wrongful accusations and misuse of litigation rights before UAE courts and authorities.