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About UAE’s Competition Law

United Arab Emirates (UAE) Federal Law No. 4 of 2012 (the Competition Law) aims at protecting and promoting the competition and combating monopolistic practices for providing an environment that encourages business organization to promote efficiency, competitiveness, consumers interests and the realization of sustainable development in the UAE. It also aims at maintaining a competitive market governed by market mechanisms in accordance with the principle of economic freedom by prohibiting restrictive agreements, actions and acts leading to misuse of dominant position, controlling the economic concentration and avoiding everything that may prejudice, limit or prevent competition.

Provisions of the Competition Law shall be applicable to all the enterprises in relation to their economic activities carried out within the UAE, and the utilization of intellectual property rights within and outside the UAE, and to any economic activities occurring outside the UAE and having an effect on competition inside the UAE.

The following shall be excluded from the application of the Competition Law:

  • Sectors, activities and businesses of Telecommunication, Financial, Media activities, Oil and Gas, Pharmaceutical, Postal services etc. The Council of Ministers may remove or add any sectors, activities or businesses to those exceptions.
  • Acts initiated by the Federal Government or any emirate government, as well as acts initiated by enterprises pursuant to a decision or authorization from the federal government or emirate government, or under the supervision of either of them, including the acts of enterprises owned by the federal government or emirate government.

The law prohibits following practices:

  • Restrictive Agreements between enterprises the subject matter or purpose of which may contravene, limit or prevent competition;
  • Abuse of dominant position that prevent, limit or weaken competition; and
  • Economic concentration which is likely to create or promote a dominant enterprise and which may affect the competition level in the relevant market.

Exclusion

On the recommendations of the Competition Committee, the Minister shall make a decision to exclude a restrictive agreement or a practices relevant to the dominant position from the application of Article 5 & 6, if relevant enterprise shall prove that the agreement or the practice will enhance economic development, performance and competitiveness of the enterprises, develop production and distribution system, or realize specific benefits for consumers.

Economic Concentration

The law requires enterprises that intend to accomplish economic concentration operations in which the total share of the party enterprises exceeds the rate of total transactions in the market set by the Council of Ministers to submit an application to the Ministry at least 30 days from their completion.

The Minister will issue the decision on the application within 90 days, a period which may be extended to additional 45 days. Concerned enterprise may not undertake any actions or procedures to complete economic concentration operations during this period.

The Minister may issue reasoned decision based on the following:

  • Approve the economic concentration operation if it does not adversely affect competition, or if positive economic effects exceed negative impact.
  • Approve the economic concentration operation provided concerned enterprises undertake to fulfill the terms and conditions set by the Minister for this purpose.
  • Reject the economic concentration operation.

Penalties

Contravention of the law attracts legal proceedings and besides economic remedies provides for imposition of penalty as follows:

  • A person who violates Article 5 (Restrictive agreement) or 6 (Abusing of dominance position) shall pay a fine of AED 500,000 to AED 5,000,000.
  • A person who violates Article 9 (Economic concentration) shall pay a fine of at least 2%, but not exceeding 5% of the annual gross sales or revenue from services or a fine AED 500,000 to AED 5,000,000.
  • A person who violates Clause 2 (concentration without permission) and Clause 3 (not providing additional information relating to economic concentration) of Article 10 shall pay a fine of AED 50,000 to AED 500,000.
  • A person who violates Article 15 (confidentiality) shall pay a fine of AED 50,000 to AED 200,000.
  • A person who violates any other provision of the law or regulations shall pay a fine of AED 10,000 to AED 100,000.

The penalties set for the violations provided above shall be doubled in case of repetition.

The Court, when rendering a decision of conviction, shall close the enterprise for 3 months to 6 months.

Punishments under this Law may not preclude any other severer punishment provided for in any other law.

Punishments under this Law may not prejudice the right of the injured party to refer to claiming compensation for the damage.

Appeals

The decision issued by the Minister may be appealed before the court of jurisdiction within sixty days of serving the concerned parties.

Our Services

We provide wide range of services covering every aspect of the Competition Law to safeguard the business interests of our local as well as international clients. We provide high quality professional services in this area ranging from advising our valued clients ways and means to comply with the relevant provisions of the law, protecting their interests through invoking the provisions of the law and pleading their case before the relevant authority to avoid any adverse action against our clients. Our services in this regard includes, but not limited to the following:

Exclusion

We provide enterprises following services in seeking exclusion from application of provisions relating to restrictive agreements and abuse of dominant position:

  • Preparation of application to get exclusion from the Ministers of economy for our clients.
  • Compilation and drafting of documents that are required to be attached with the exclusion application.
  • Actively pursuing the application with Ministry of Economy till it submits detail report on the exception to the Ministers.
  • Obtaining the decision from the Ministry of Economy regarding the exclusion of restrictive agreements or a practice said to be an abuse of dominant condition.

Economic Concentration

We provide following services in cases of Economic Concentration:

  • Preparation of a comprehensive and convincing case on behalf of and in close coordination with clients.
  • Assisting clients in compilation of required documents/attachment with written application of economic concentration.
  • Actively pursuing the case with Ministry of Economy and the competent local body till resolution of clearance by the Minister.

Restrictive Agreement & Abuse of Dominant Position

We provide following services in cases of Restrictive Agreements & Abuse of Dominant Position cases:

  • Assisting our client facing Competition Law violation proceedings by the Ministry of Economy.
  • Preparation of defense/response based upon commercial, economic and legal justifications to allegation of entering into a restrictive agreement or formation of cartel or abuse of dominant position.
  • Representing our clients in meetings before the Ministry of Economy.
  • Actively pursuing the case till final report submitted by the Ministry of Economy to the Minister.
  • In case of adverse resolution passed by the Minister, filing of application for review of the resolution before the Ministry of Economy within 14 days.

Competition Law Compliance Assessment/Audit

We also conduct competition compliance audit of our clients’ enterprises to identify the risky areas which may attract competition violation proceedings and penalties. With this service, we safeguard the business interest of our clients and make them aware of the ways and means to fully comply with the Competition Law and regulations.

Competition Law Training

Our firm conducts Competition Law training for its clients operating in different markets taking into consideration the unique structures and conditions of each market. Therefore, an enterprise specific interactive session is designed for the clients wherein questions of staff are answered instantly, possible weaknesses of the enterprise in Competition Law compliance are identified and solutions are suggested.

Competition Law Manual

Our firm prepares enterprise specific Competition Law Compliance Manual which would serve as a guideline for enterprise so that Top Management itself may carry out assessment of different business matters to avoid any competition violation.