UAE Strengthens Competition Rules for Businesses and Investors

As the UAE continues to attract international investment, large corporate transactions and multinational businesses, competition law is becoming increasingly important for companies operating in the country.

To support fair competition and economic growth, the UAE introduced Federal Decree-Law No. (36) of 2023 Regulating Competition, replacing the previous competition law and introducing more detailed rules relating to anti-competitive practices, dominant market positions and economic concentration transactions.

The law has since been supplemented by Cabinet Decision No. (3) of 2025 and Cabinet Resolution No. (59) of 2026, providing greater clarity regarding market dominance thresholds, merger controls and compliance procedures.

For businesses operating in the UAE, understanding these requirements is becoming essential, particularly when entering into mergers, acquisitions, joint ventures or other significant commercial arrangements.

What Is Competition Law?

Competition law is designed to ensure that businesses compete fairly while protecting consumers from practices that may reduce choice, increase prices or restrict market access.

The objective of competition legislation is to encourage innovation, support economic development and prevent conduct that could negatively affect competition within the market.

In general, competition laws focus on three main areas:

• Anti-competitive agreements between businesses.

• Abuse of a dominant market position.

• Economic concentration transactions, including mergers and acquisitions.

Federal Decree-Law No. (36) of 2023 addresses each of these areas and establishes the legal basis for competition regulation in the UAE.

Why Was a New Competition Law Introduced?

Competition in the UAE was previously regulated under Federal Law No. (4) of 2012 on the Regulation of Competition.

While the earlier legislation prohibited certain anti-competitive conduct, there was limited guidance regarding important issues such as market dominance, merger notification requirements and economic concentration transactions.

To address these issues and strengthen competition oversight, the UAE enacted Federal Decree-Law No. (36) of 2023 Regulating Competition, which came into force on 29 December 2023.

The new law provides clearer rules and enhanced regulatory oversight while supporting the UAE's objective of maintaining competitive markets and attracting investment.

Key Areas Covered by the Competition Law

Anti-Competitive Agreements

The law prohibits agreements or arrangements that may negatively affect competition within the relevant market.

Examples may include agreements between competitors that seek to:

• Fix prices.

• Restrict production or supply.

• Divide markets or customers.

• Coordinate bids or tenders.

Such arrangements can reduce competition and negatively impact consumers and businesses.

Abuse of a Dominant Market Position

The law also regulates businesses that hold significant market power.

A company with a dominant position must not use that position in a manner that prevents, restricts or harms competition.

Examples may include practices that:

• Exclude competitors from the market.

• Unfairly limit market access.

• Impose unjustified conditions on customers or suppliers.

• Create barriers to competition.

The objective is not to prevent businesses from becoming successful but to ensure that market power is exercised fairly.

Economic Concentration and Mergers

The law introduces detailed rules relating to economic concentration transactions.

Economic concentration may arise through:

• Mergers.

• Acquisitions.

• Joint ventures.

• Business combinations that may affect competition within the UAE market.

Depending on the circumstances, businesses may be required to notify the relevant authorities and obtain approval before completing certain transactions.

This is particularly important for large corporate groups and investors involved in significant commercial transactions.

Cabinet Decision No. (3) of 2025: Market Dominance Threshold

One of the most significant developments occurred with the issuance of Cabinet Decision No. (3) of 2025.

The decision introduced a measurable threshold for determining market dominance.

Under the decision, a business may be considered to hold a dominant position where it controls more than 40% of the total transactions in the relevant market.

This provides businesses with greater certainty when assessing their market position and potential compliance obligations.

The introduction of a clear threshold also assists companies in evaluating commercial strategies, acquisitions and expansion plans.

Cabinet Resolution No. (59) of 2026: Executive Regulations

The UAE further strengthened competition regulation through Cabinet Resolution No. (59) of 2026, which introduced the Executive Regulations of Federal Decree-Law No. (36) of 2023.

The Executive Regulations provide detailed procedures relating to:

• Merger notifications.

• Economic concentration applications.

• Exemptions and approvals.

• Competition complaints.

• Investigation procedures.

• Regulatory enforcement measures.

The regulations provide greater clarity regarding how the law will be applied in practice and what businesses must do to remain compliant.

Who Is Most Affected by the New Rules?

The competition rules are particularly relevant to:

• Large businesses.

• Companies with significant market share.

• Investors and investment groups.

• Corporate groups.

• Multinational companies operating in the UAE.

• Businesses involved in mergers and acquisitions.

• Joint venture participants.

Companies involved in major transactions should assess competition law implications at an early stage to avoid regulatory issues and potential delays.

Why Competition Compliance Matters

Competition compliance is no longer a consideration only for large multinational corporations.

As regulatory requirements become more detailed, businesses operating in the UAE should understand how their commercial arrangements, pricing practices and strategic transactions may be viewed under competition laws.

Compliance helps businesses:

• Reduce regulatory risk.

• Avoid potential penalties.

• Support transaction planning.

• Improve corporate governance.

• Maintain fair market practices.

For investors and acquiring companies, competition law reviews are increasingly becoming an important part of transaction due diligence.

Conclusion

The UAE has significantly strengthened competition regulation through:

• Federal Decree-Law No. (36) of 2023 Regulating Competition

• Cabinet Decision No. (3) of 2025

• Cabinet Resolution No. (59) of 2026

The introduction of market dominance thresholds, merger notification procedures and detailed compliance requirements reflects the UAE's continued commitment to promoting fair competition and supporting economic growth.

Businesses involved in mergers, acquisitions, joint ventures or significant commercial arrangements should ensure that competition law considerations form part of their legal and compliance review processes.