For more than a decade the UAE's competition regime existed largely on paper. Federal Decree-Law No. 36 of 2023, and the merger-control thresholds that finally gave it teeth in 2025, have changed that. Dealmakers and commercial teams now operate under a mandatory, suspensory clearance regime with real penalties, administered by the Ministry of Economy.
From dormant statute to enforced regime
The UAE has had a competition statute since Federal Law No. 4 of 2012. In practice it was rarely a live constraint: turnover-based filing thresholds were never fixed by the required implementing instruments, so the mandatory merger-notification machinery sat idle, and broad carve-outs kept whole sectors outside its reach. Federal Decree-Law No. 36 of 2023 on the Regulation of Competition repealed and replaced the 2012 law, entering into force on 29 December 2023. The decisive step came later: a ministerial decree issued on 20 January 2025 set the economic-concentration thresholds, which took effect on 31 March 2025. Only from that date did the regime acquire an operative, quantitative trigger.
The architecture rests on three substantive pillars, each enforced by the Ministry of Economy's competition function: a prohibition on anti-competitive agreements, a prohibition on abuse of a dominant position, and a mandatory, pre-closing clearance obligation for economic concentrations. Around these sits an exemption mechanism, an enhanced set of investigatory and sanctioning powers, and a narrowing of the exclusions that had previously hollowed out the old law.
The substantive prohibitions
Anti-competitive agreements. The decree-law prohibits agreements and concerted practices between undertakings whose object or effect is to restrict, prevent, or distort competition. The clearest cases — the "hardcore" conduct treated most severely everywhere — include:
- price-fixing, whether raising, lowering, or stabilising the purchase or sale price of goods or services;
- market-sharing, by allocating territories, customers, or supply sources;
- bid-rigging and collusive tendering; and
- restricting output, production, or investment to soften competitive pressure.
The reach extends to both horizontal arrangements between competitors and vertical arrangements along a supply chain, with the more serious analysis reserved for horizontal cartels.
Abuse of dominance. The law targets not the holding of market power but its abuse. A dominant position is understood as one that lets an undertaking — alone or with others — control or materially influence a relevant market; a market share above 40% of sales in the relevant market is treated as the reference point for dominance. The implementing regulation makes clear that share is a starting indicator, not the whole test: the Ministry weighs a wider set of qualitative and quantitative factors, including technological advantage, financial strength, the resilience of the business model, geographic concentration, pricing behaviour, and the ability to act independently of competitors and customers. Abusive conduct — predatory pricing, exclusionary practices, and the exploitation of another undertaking's economic dependence — is what the law bites on.
The regime's centre of gravity is the suspensory merger filing: qualifying deals cannot close before the Ministry of Economy clears them.
Merger control: the economic-concentration regime
The most consequential change for transactional practice is the mandatory notification of economic concentrations. A concentration — broadly, a merger, an acquisition of control, or a combination that durably changes market structure — must be notified to, and cleared by, the Ministry of Economy before completion where a jurisdictional threshold is met. Two alternative thresholds now apply:
- a turnover threshold, where the parties' combined annual sales in the relevant UAE market exceed AED 300 million; or
- a market-share threshold, where the parties' combined share exceeds 40% of total sales in the relevant UAE market.
Either limb suffices; the market-share limb in particular can catch smaller transactions that would clear a turnover-only test elsewhere. The obligation is suspensory: parties are prohibited from closing until clearance is obtained, and the Ministry works to a statutory review clock (reported at 90 days, with provision for extension). Gun-jumping — closing early, or failing to notify a qualifying deal — carries turnover-linked exposure, discussed below. For anyone structuring an M&A transaction, joint venture, or minority-stake acquisition touching the UAE, the threshold analysis now belongs at the term-sheet stage, not at signing.
Exemptions, sectors, and free zones
The 2023 reform deliberately narrowed the exclusions that had blunted the old regime. Under Law No. 4 of 2012, small and medium establishments and a range of regulated sectors sat largely outside the framework; the new decree-law tightens this, bringing more activity within scope and reducing the assumption that a sector regulator's oversight displaces competition review. Undertakings that fear a restrictive arrangement or a concentration may fall foul of the prohibitions can apply to the Ministry for an individual exemption, which is assessed against efficiency and public-interest criteria.
Two interfaces demand care. First, regulated sectors such as telecommunications and financial services continue to have their own regulators, and the boundary between sector-specific supervision and general competition oversight must be mapped deal-by-deal rather than assumed. Second, free zones: the decree-law contemplates federal competition rules of broad application, so the older reflex that free-zone activity is automatically beyond reach should not be relied upon. Where a free-zone entity's conduct or turnover touches the wider UAE market, notification and compliance questions can arise, and the safer working assumption is that the regime may apply until analysis shows otherwise.
Enforcement and penalties
The Ministry of Economy holds investigatory powers and can impose administrative sanctions. Financial penalties are turnover-linked: for prohibited agreements and abuse of dominance, and for failures in the merger-control process, fines are calculated as a percentage band of the violating undertaking's annual UAE sales (reported in the region of 2% to 10%). Where relevant turnover cannot be determined, a fixed alternative applies, reported at between AED 500,000 and AED 5 million. Turnover-based fines change the compliance calculus: exposure scales with the size of the business, and the cost of a missed filing or a cartel arrangement is no longer a nominal, budgeted line item.
Practical strategy
Two workstreams follow. In transactions, threshold screening should be built into deal timetables from the outset: assess both the AED 300 million turnover limb and the 40% share limb against a properly defined relevant UAE market, allow for the review period in the completion schedule, and treat clearance as a condition precedent with clear allocation of filing risk and gun-jumping liability. In day-to-day commercial arrangements, distribution agreements, pricing coordination, information exchange with competitors, and tender conduct should be reviewed against the prohibitions, with genuinely borderline restraints routed through the exemption process rather than left to chance. For dominant firms, pricing and exclusivity practices warrant documented competition analysis. The regime is young, and Ministry practice will develop — but the direction is settled: competition compliance in the UAE is now an operational discipline, not a theoretical one.
Instruments referenced: Federal Decree-Law No. 36 of 2023 on the Regulation of Competition (in force 29 December 2023) and its implementing/executive regulations, including the ministerial decree setting economic-concentration thresholds effective 31 March 2025; predecessor Federal Law No. 4 of 2012 on the Regulation of Competition. Thresholds, timelines, and penalty bands are stated as currently reported and should be verified against the official text and current Ministry of Economy guidance for any live matter. This page is general information, not legal advice.