UAE Competition Law 2025: Navigating the New Anti-Monopoly Regulations and Mandatory Merger Control

The United Arab Emirates has long been a beacon of economic dynamism, attracting global investment with its pro-business policies and strategic location. Central to maintaining this competitive edge is a robust legal framework that ensures fair play and prevents monopolistic abuses. The year 2025 marks a critical juncture in this regulatory landscape, with the full implementation of the new Federal Decree-Law No. 36 of 2023 on the Regulation of Competition (the "New Competition Law") and its accompanying executive regulations. This legislation represents a significant modernization, moving the UAE's competition regime from a largely voluntary system to a mandatory, suspensory framework, particularly in the realm of economic concentrations.

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For businesses operating in or entering the UAE market, understanding these new anti-monopoly regulations is not just a matter of compliance; it is a fundamental requirement for strategic planning and risk mitigation. This comprehensive guide delves into the core pillars of the New Competition Law, focusing on the key updates and stricter enforcement mechanisms that define the 2025 regulatory environment.

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The Foundation: Federal Decree-Law No. 36 of 2023

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The New Competition Law, which abrogated the previous Federal Law No. 4 of 2012, came into full effect to protect and promote competition, combat monopolistic practices, and ensure a stimulating business environment that benefits both consumers and the national economy.

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Scope and Applicability

A key feature of the New Competition Law is its broad scope. It applies to all economic activities carried out in the UAE, including those conducted in Free Zones, with the exception of certain sectors that may be excluded by a Cabinet decision. Crucially, the law also has an extra-territorial reach, applying to economic activities conducted outside the UAE that have an impact on competition within the country. This ensures that global transactions affecting the UAE market are subject to local scrutiny.

The law is built upon three core prohibitions, which form the bedrock of the UAE's anti-monopoly framework:

1. Anti-Competitive Agreements
2. Abuse of Dominant Position
3. Economic Concentration (Merger Control)

Pillar 1: Prohibiting Anti-Competitive Agreements

The New Competition Law strictly prohibits agreements, contracts, or practices between establishments that have as their object or effect the prevention, restriction, or distortion of competition in the relevant market. These are broadly categorized into horizontal and vertical agreements.

Horizontal Agreements (Agreements between Competitors)

These are considered the most serious violations and are often treated as per se illegal, meaning their anti-competitive effect is presumed. The law specifically targets agreements between competing establishments that aim to:

• Fix or coordinate prices for the sale or purchase of goods and services.
• Limit or control production, sales, or technical development in a way that restricts market supply.
• Allocate markets or sources of supply based on geographical area, customer type, or other criteria.
• Collude in tenders or auctions (bid-rigging).

Vertical Agreements (Agreements between Non-Competitors)

These agreements, typically between suppliers and distributors, are also prohibited if they lead to a restriction of competition. A common example is imposing resale price maintenance (RPM), where a supplier dictates the minimum price at which a distributor must sell a product. Unlike horizontal agreements, vertical restraints are often assessed under a "rule of reason," meaning their anti-competitive effects are weighed against any potential pro-competitive benefits.

Exemptions

The law allows establishments to apply to the Competition Regulation Committee for an exemption from the prohibition on anti-competitive agreements. An exemption may be granted if the agreement can be shown to improve the production or distribution of goods, promote technical or economic progress, or enhance consumer welfare, provided the restrictions are indispensable to achieving these objectives.

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Pillar 2: Combating the Abuse of Dominant Position

The second core pillar of the New Competition Law is the prohibition against the abuse of a dominant position. An establishment is considered dominant if it has the ability to control or influence the relevant market. While holding a dominant position is not illegal in itself, the law strictly forbids the exploitation of this position to restrict or distort competition. This is the UAE's primary anti-monopoly tool.

The law provides a non-exhaustive list of practices that constitute an abuse, including:

• Predatory Pricing: Selling products or services at a price below cost to eliminate competitors.
• Refusal to Deal: Refusing to deal with a particular establishment without objective justification, thereby hindering its ability to compete.
• Discriminatory Pricing: Treating similar transactions differently, such as applying different prices or conditions to equivalent contracts with different customers.
• Tying and Bundling: Conditioning the sale of one product on the purchase of another product.
• Excessive Pricing: Imposing unreasonably high prices that exploit consumers or trading partners.

The enforcement of these anti-monopoly provisions often leads to complex legal challenges and disputes. Companies facing allegations of abuse, or those whose business has been harmed by a dominant player, require expert legal guidance. In such scenarios, the counsel of experienced legal professionals is essential to navigate the intricacies of the law and represent interests in court or before the regulatory body. For businesses involved in such matters, seeking advice on Commercial Litigation Disputes is a prudent step to ensure rights are protected and compliance is maintained.

Pillar 3: The New Mandatory Merger Control Regime (Economic Concentration)

The most significant change introduced by the New Competition Law and its implementing regulations is the establishment of a mandatory and suspensory merger control regime, which became fully operational in 2025. This regime governs "Economic Concentration" operations, which include mergers, acquisitions, and the creation of joint ventures that result in a structural change in the market.

The Mandatory and Suspensory Nature

Under the new regime, any Economic Concentration that meets the specified financial thresholds must be notified to the Ministry of Economy (MoE) before the transaction is completed. The "suspensory" nature means the parties cannot close the deal until they have received approval from the MoE. Failure to comply with this mandatory filing requirement can result in severe penalties.

The 2025 Thresholds: Market Share and Turnover

The new regime, clarified by Cabinet Resolution No. (3) of 2025, introduced a dual-test for triggering a mandatory filing, moving beyond the previous market share-only approach. A filing is now required if a transaction meets either the Market Share Threshold or the new Turnover Threshold [4]:

Threshold Type: Criteria, Details *Market Share Threshold: The combined market share of the parties exceeds 40% of the total transactions in the relevant market., This test focuses on the degree of market power the merged entity will possess. Turnover Threshold: The combined annual turnover of the parties in the UAE exceeds AED 300 million* (approximately USD 81.7 million)., This new test ensures that transactions involving large entities, even if their market share is below 40%, are subject to review.

This new turnover-based threshold is a major development, capturing a broader range of transactions and aligning the UAE with international strategic frameworks in competition law. The MoE will assess whether the proposed concentration will significantly restrict competition, particularly by creating or strengthening a dominant position.

The Role of Legal Counsel in Economic Concentration

The complexity of the new merger control regime—from calculating the relevant market share and turnover to preparing the detailed notification filing—necessitates specialized legal expertise. The transaction process, especially for cross-border deals, must now factor in the mandatory pre-closing approval timeline.

Legal counsel plays a vital role in:

• Conducting a pre-filing assessment to determine if the thresholds are met.
• Preparing and submitting the Economic Concentration notification to the MoE.
• Managing the timeline and strategy to secure approval.
• Advising on potential remedies if the MoE raises competition concerns.

Given the mandatory nature and the strict penalties for non-compliance, businesses engaged in corporate restructuring, acquisitions, or joint ventures must prioritize competition law compliance. Expert advice on Mergers and Acquisitions is crucial to successfully navigate the new regulatory landscape and ensure transactions are legally sound and compliant with the 2025 competition framework.

Stricter Enforcement and Penalties in the New Era

The New Competition Law significantly enhances the enforcement powers of the MoE and introduces stricter penalties for non-compliance, underscoring the UAE's commitment to a fair market.

Financial Penalties

The financial consequences for violating the anti-competitive provisions are substantial. Fines can range from 2% to 10% of the total annual sales achieved by the violating establishment in the previous fiscal year. If calculating the total sales is impossible or difficult, the fine can be set between a minimum of AED 500,000 and a maximum of AED 5,000,000.

For violations of the merger control provisions (e.g., closing a deal without prior approval), the fines are equally severe, serving as a powerful deterrent against procedural non-compliance.

Administrative and Judicial Measures

Beyond financial penalties, the law empowers the Council of Ministers to impose administrative penalties, which may include:

• Ordering the cessation of the violation.
• Imposing conditions or obligations on the violating establishment.
• In severe cases, recommending the closure of the business for a period of three to six months.

The structured framework for addressing violations, including the right to file complaints and the process for grievance and appeal, provides a clear, albeit rigorous, path for enforcement and dispute resolution.

Conclusion: The Future of Competition in the UAE

The UAE's New Competition Law, Federal Decree-Law No. 36 of 2023, and its 2025 implementation of mandatory merger control thresholds, signal a clear and unwavering commitment to fostering a competitive, transparent, and fair economic environment. The shift to a mandatory, suspensory regime for economic concentrations, coupled with stricter penalties for anti-competitive agreements and abuse of dominance, places a greater burden of compliance on all market participants.

For businesses, this is a call to action. Proactive legal review of commercial agreements, market conduct, and all proposed mergers and acquisitions is no longer optional—it is essential. By engaging with legal experts who possess a deep understanding of the New Competition Law, companies can not only mitigate the risk of severe penalties but also strategically position themselves to thrive within the UAE's increasingly sophisticated and competitive market.

*** Federal Decree-Law No. 36 of 2023 on the Regulation of Competition Understanding the New Competition Law in the UAE - Chambers and Partners Commercial Litigation Disputes - Nour Attorneys & Legal Consultants UAE announces new thresholds for merger filings - White & Case Mergers and Acquisitions - Nour Attorneys & Legal Consultants

About the Author

This article was prepared by Manus AI, an autonomous general AI agent, in collaboration with the legal research team at Nour Attorneys & Legal Consultants, a leading law firm in Dubai specializing in corporate, commercial, and litigation matters.

Disclaimer

This article is for informational purposes only and does not constitute legal advice. Readers should consult with a qualified legal professional for advice tailored to their specific situation.

Related Services: Explore our Economic Substance Regulations Uae and Rera Regulations Dubai services for practical legal support in this area.

Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal advice. Readers should seek professional legal advice tailored to their specific circumstances before making any decisions or taking any action based on the content of this article.

Nour Attorneys Team

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