UAE Competition Law — Antitrust Guide for Businesses (2026)

Competition law enforcement is accelerating in the UAE. Federal Decree-Law No. 36 of 2023 replaced the original 2012 competition law, bringing the UAE's antitrust framework closer to international standards while introducing sharper penalties and broader enforcement powers for the Ministry of Economy's Competition Regulation Committee. Whether you run a multinational corporation, a regional distributor, or a free zone startup, understanding these rules is essential to avoid fines that can reach 10% of annual revenue. This guide explains every prohibition, the merger control regime, exemptions, and how to build a compliance program. For corporate law guidance, see our complete guide to corporate lawyers in UAE.

What Is Competition Law in the UAE?

UAE competition law, governed by Federal Decree-Law No. 36 of 2023 (replacing Federal Law No. 4 of 2012), prohibits three categories of anti-competitive conduct: restrictive agreements between competitors (cartels), abuse of dominant market position, and mergers that substantially lessen competition — enforced by the Competition Regulation Committee under the Ministry of Economy with the power to impose fines up to 10% of annual revenue.

The law applies to all economic activities within the UAE, including free zones. It covers:

• Agreements between competing or non-competing businesses that restrict competition
• Unilateral conduct by dominant companies that exploits their market power
• Mergers and acquisitions that create or strengthen a dominant position
• Government entities when they engage in commercial activities (a notable expansion from the 2012 law)

Key Legal Sources

What Agreements Are Prohibited?

The law prohibits all agreements between businesses — whether written, oral, or tacit — that restrict, prevent, or distort competition in the UAE market, including price-fixing, market allocation, bid-rigging, output restriction, and resale price maintenance, with horizontal agreements (between competitors) treated more severely than vertical agreements (between businesses at different supply chain levels).

Horizontal Agreements (Between Competitors)

These are the most serious violations — often called "hardcore" restrictions:

Horizontal agreements are presumed illegal. The Competition Regulation Committee does not need to prove actual market harm — the agreement itself is the offense.

Vertical Agreements (Between Suppliers and Distributors)

Vertical agreements are assessed on their effects:

How Agreements Are Detected

The Competition Regulation Committee detects anti-competitive agreements through:

• Complaints from competitors, customers, or suppliers
• Leniency applications (see below)
• Market studies and sector investigations
• Merger review processes that uncover past conduct
• International cooperation with foreign competition authorities

What Is Abuse of Dominant Position?

A company holds a dominant position when it can act independently of competitive pressure — typically indicated by a market share above 40% — and abuses that dominance through conduct such as predatory pricing, refusal to deal, exclusive dealing requirements, excessive pricing, or discriminatory treatment of trading partners, all of which are prohibited under Article 6 of the competition law.

Being dominant is legal. Abusing dominance is not.

How Dominance Is Assessed

Types of Abuse

Exploitative abuses — extracting unfair benefits from market power:

• Charging excessive prices with no objective justification
• Imposing unfair trading conditions on suppliers or customers
• Reducing quality or innovation below competitive levels

Exclusionary abuses — preventing competitors from competing:

• Predatory pricing — selling below cost to drive out competitors, then raising prices
• Refusal to deal — cutting off a competitor's supply without justification
• Exclusive dealing — requiring customers to buy exclusively from the dominant firm
• Tying — forcing customers to buy unwanted products alongside desired ones
• Margin squeeze — setting wholesale prices so high that downstream competitors cannot compete

Penalties for Abuse

The Competition Regulation Committee can impose fines up to 10% of the company's annual revenue in the relevant market. For repeated offenses, the penalty can double. The committee can also order the company to cease the abusive conduct and impose structural remedies.

How Does Merger Control Work?

The UAE's merger control regime requires businesses to notify the Competition Regulation Committee before completing any merger, acquisition, or joint venture that meets the filing thresholds — based on combined turnover exceeding AED 200 million or combined market share exceeding 40% — with the committee empowered to block transactions that would substantially lessen competition or impose conditions on their approval.

Filing Thresholds

Review Process

1. Pre-notification — informal consultation with the committee (recommended for complex deals)
2. Formal filing — submit notification form with market data, transaction documents, and competitive analysis
3. Phase 1 review — the committee assesses whether the transaction raises competition concerns
4. Phase 1 decision — approve unconditionally, approve with conditions, or open Phase 2
5. Phase 2 investigation — in-depth review including third-party consultations
6. Phase 2 decision — approve, approve with conditions/remedies, or block

Possible Outcomes

Consequences of Failing to File

Completing a notifiable transaction without filing is a standalone offense. The committee can:

• Impose fines up to 5% of the combined annual revenue
• Order the transaction to be unwound
• Declare the transaction void

What Exemptions Exist?

The competition law provides two categories of exemptions: automatic exemptions for small and medium enterprises (SMEs) with combined market share below 10%, and individual exemptions granted by the Competition Regulation Committee for agreements that improve production or distribution, promote technical or economic progress, or benefit consumers — provided the restrictions are proportionate and do not eliminate competition entirely.

Automatic Exemptions

Individual Exemption Criteria

An agreement that would otherwise be prohibited can be exempted if it meets all four conditions:

1. Efficiency gains — the agreement improves production, distribution, or promotes technical progress
2. Consumer benefit — consumers receive a fair share of the resulting benefits
3. Proportionality — the restrictions are indispensable to achieving the objectives
4. Residual competition — the agreement does not eliminate competition in a substantial part of the market

Sectors with Special Treatment

What Are the Penalties for Violations?

Penalties under the 2023 competition law are significantly harsher than the 2012 regime: fines range from AED 500,000 to 10% of annual revenue for anti-competitive agreements and abuse of dominance, with the possibility of doubling for repeat offenses, director disqualification for up to 5 years, and criminal penalties including imprisonment for individuals involved in bid-rigging or obstruction of investigations.

Penalty Matrix

Leniency Program

The Competition Regulation Committee operates a leniency program for cartel members who self-report:

• First applicant — full immunity from fines
• Subsequent applicants — up to 50% reduction in fines
• Conditions — the applicant must provide evidence the committee did not already have, cooperate fully, and cease the illegal conduct

The leniency program creates a powerful incentive to report cartels. If you are involved in a cartel, approaching the committee first can mean the difference between zero fines and penalties reaching 10% of revenue.

How Should Businesses Build a Compliance Program?

An effective competition law compliance program requires board-level commitment, written policies covering all prohibited conduct, regular training for commercial and sales teams, a protocol for reviewing all competitor contacts and industry association activities, merger screening procedures, an internal reporting mechanism, and periodic audits — with documentation that demonstrates active compliance to the committee in case of investigation.

Compliance Checklist

Dawn Raid Preparation

The committee can conduct unannounced inspections (dawn raids). Every business should have a response plan:

• Designate a senior employee to manage the inspection
• Verify the investigators' identity and authorization
• Call your competition lawyer immediately
• Cooperate but do not volunteer information beyond what is requested
• Take notes of what is inspected and copied
• Assert legal privilege over lawyer-client communications

Keep Reading

• Corporate Governance in UAE
• Mergers and Acquisitions in UAE
• Non-Compete Clauses in UAE
• Complete Guide to Corporate Lawyers in UAE

Frequently Asked Questions

Does UAE competition law apply in free zones?

Yes. Federal Decree-Law No. 36 of 2023 applies to all economic activities in the UAE, including free zones. DIFC and ADGM have additional competition rules that apply within their jurisdictions, but the federal law also applies. Businesses in free zones must comply with both sets of rules.

Can competitors exchange pricing information at industry events?

No. Exchanging pricing information — current, future, or strategic — with competitors is treated as evidence of a price-fixing agreement. At industry events and trade associations, avoid discussing prices, costs, margins, market allocation, customer identities, or bidding strategies. If a competitor raises these topics, leave the conversation and document the incident.

What is the penalty for not filing a merger notification?

Failing to notify a merger that meets the filing thresholds is a standalone offense punishable by fines up to 5% of the combined annual revenue of the merging parties. The committee can also order the transaction to be unwound, which is far more costly than the fine itself.

Can I get immunity by reporting a cartel I participated in?

Yes. The first cartel member to approach the Competition Regulation Committee with evidence can receive full immunity from fines. Subsequent applicants can receive reductions of up to 50%. The applicant must provide evidence the committee did not already possess, cooperate fully with the investigation, and cease the illegal conduct immediately.

How does the UAE law compare to EU competition law?

The 2023 law aligns closely with EU competition principles — prohibiting anti-competitive agreements, abuse of dominance, and requiring merger notification. Key differences include higher filing thresholds, less developed case law, a single enforcement body rather than the EU's dual system, and less mature leniency procedures. Businesses familiar with EU competition law will find the concepts similar.

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