The New UAE Competition Law
With the enactment of Federal Decree No. 36/2023 regulating competition, the United Arab Emirates has fundamentally revised its competition law, aligning it with international standards. This reform replaces the previous Federal Law No. 4/2012 and introduces significant changes that companies operating in or dealing with the UAE must consider. The law came into force on December 29, 2023, while the new merger control thresholds have been in effect since March 31, 2025. Companies must therefore ensure full compliance with these new provisions as of that date.
I. Expanded Scope and New Regulatory Approaches
The new competition law applies not only to companies operating within the UAE but also to economic activities abroad that impact competition in the UAE. This includes the abuse of market dominance, anti-competitive agreements, and mergers that could substantially alter market dynamics. Notably, the law explicitly incorporates the protection of intellectual property rights within its scope, ensuring that licensing and commercialization strategies do not unduly restrict competition.
II. Stricter Merger Control Regulations
One of the most significant changes concerns the regulation of mergers and acquisitions. The new law introduces a dual-threshold system to determine whether a transaction requires regulatory approval. A merger must be notified if the combined turnover of the involved entities exceeds AED 300 million in the UAE. Additionally, notification is required if the combined market share of the entities exceeds 40% of the relevant market. These new criteria provide businesses with clearer guidance on whether their transactions require approval.
The notification and review periods for mergers have also been revised. Companies are now required to notify the competition authority at least 90 days before completing a transaction—an increase from the previous 30-day period. The authority then has 90 days to review the transaction, with a possible extension of an additional 45 days. This necessitates earlier strategic planning by businesses to avoid delays and uncertainties.
III. Removal of Sectoral Exemptions and Increased Regulatory Oversight
A major departure from the previous competition law is the removal of broad sectoral exemptions. While entire industries—such as telecommunications and financial services—were previously exempt from competition regulations, oversight responsibilities now rest primarily with the relevant sectoral regulatory authorities. Companies operating in regulated industries should proactively engage with the competition authority or relevant ministries to ensure compliance with the new requirements.
IV. Stricter Penalties and New Compliance Requirements
In addition to tightening substantive regulations, the penalties for violations have been significantly increased. Companies that fail to notify a reportable merger may face fines ranging from 2% to 10% of their UAE turnover. If turnover is not clearly ascertainable, fines range between AED 500,000 and AED 5 million. These new sanctions highlight the growing importance of competition enforcement and encourage businesses to ensure compliance with the revised regulations.
V. Implications for Businesses and Market Strategies
The new competition law has far-reaching implications for companies operating in the UAE or conducting business transactions in the region. Mergers and acquisitions are subject to stricter controls, leading to longer review periods and potentially higher costs. Companies must ensure that their planned transactions comply with the new requirements and allow sufficient time for regulatory approvals. Additionally, it is advisable to review existing compliance programs to align internal processes with the updated legal framework.
Another key aspect is the increased need for regulatory engagement, particularly for companies that previously benefited from blanket exemptions. The necessity to individually interact with the relevant authorities presents an additional administrative and strategic challenge for many market participants.
VI. Conclusion
The reform of competition law in the UAE marks a significant step towards a more modern and transparent regulatory framework. The introduction of clearly defined merger control thresholds, the elimination of broad sectoral exemptions, and the substantial tightening of penalties reflect a more regulated competitive environment. Businesses should carefully analyze the new provisions and adjust their market strategies accordingly to minimize legal risks and avoid competition law disputes. Ultimately, the new law underscores the UAE’s commitment to aligning with international standards and fostering fair competition for all market participants.
