Introduction
The UAE has taken a major step in the development of its competition law framework with the introduction of Cabinet Decision No. 59 of 2026, which implements Federal Decree-Law No. 36 of 2023 on the Regulation of Competition (the Competition Law). Issued on 20 April 2026, the new Implementing Regulation fills many of the gaps that existed under the Competition Law and establishes the procedural and substantive framework that businesses, investors, and transaction parties must now navigate. Once it comes into force, the Regulation will replace Cabinet Decision No. 37 of 2014.
When the Competition Law was enacted in 2023, it laid the foundation for a modern competition regime and introduced a mandatory merger control framework. However, several practical questions remained unanswered, including how transactions should be notified, how merger reviews would be conducted, the role of third parties, the process for seeking exemptions, and the scope of the Ministry of Economy’s investigative powers. Cabinet Decision No. 59 of 2026 addresses these uncertainties and transforms the Competition Law from a framework of broad principles into a comprehensive and operational regulatory regime.
A Shift Towards Economic Substance: The New Approach to Market Dominance
One of the most significant developments introduced by the Implementing Regulation is the expanded approach to assessing market dominance. Under Cabinet Decision No. 3 of 2025, an enterprise holding more than 40% of the relevant market may be presumed to occupy a dominant position. However, the Implementing Regulation makes it clear that market share is no longer the sole determinant of dominance.
The Ministry of Economy may now assess a broad range of qualitative and structural factors when determining whether a company has the ability to influence the market in a manner that adversely affects competition. These factors include technological influence, business model advantages, financial strength, volumes of domestic sales, customer dependence, the company’s presence in related or adjacent markets, barriers to entry and exit, pricing conduct, and long-term or exclusive relationships with customers and suppliers.
Notably, the Regulation recognises that technological dominance arising from innovation, investment, research, or development does not automatically amount to dominance. However, where such advantages allow an enterprise to restrict market access, reduce consumer choice, impose unfair prices, or distort competition, the Ministry may conclude that a dominant position exists even where the company’s market share remains below 40%.
This represents a significant shift towards an effects-based assessment and aligns the UAE’s competition regime more closely with jurisdictions such as the United Kingdom and the European Union, where market share serves as an indicator rather than a decisive test.
Predatory Pricing: A Structured Economic Test
The Implementing Regulation also provides long-awaited guidance on predatory pricing. For the first time, the UAE competition framework adopts a structured economic approach to determining whether pricing practices are anti-competitive.
Prices below average variable cost or marginal cost may be presumed predatory unless the enterprise can demonstrate a legitimate economic justification unrelated to the exclusion of competitors. Prices falling between average variable cost and average total cost may also be considered predatory where there is evidence of an anti-competitive strategy aimed at eliminating competitors, restricting their operations, or preventing market entry.
In determining whether pricing conduct is unlawful, the Ministry may examine factors such as the company’s market position, the ability to recover losses through future price increases, the duration of the pricing strategy, and its impact on consumers and competitors.
At the same time, the Regulation recognises several legitimate commercial justifications for low pricing, including introductory offers, promotional campaigns, stock clearance exercises, seasonal discounts, price matching, and genuine efficiency-driven pricing strategies.
Merger Control: The Most Significant Practical Change
The most significant change by the Implementing Regulation relates to merger control. The UAE now has a comprehensive and procedurally detailed merger review regime that will affect a wide range of transactions.
Economic concentrations must be notified where either the parties’ combined annual sales in the relevant market within the UAE exceed AED 300 million during the previous financial year, or their combined market share exceeds 40% of the relevant market. These thresholds apply to mergers, acquisitions, joint ventures, and other transactions resulting in direct or indirect control over another company.
Importantly, Competition Law may also apply to transactions conducted outside the UAE where competition within UAE markets may be affected. As a result, multinational transactions with no UAE-incorporated entity may still require a UAE competition law assessment where UAE revenues, customers, digital operations, or market effects are present.
A notable feature of the UAE regime is that both notification thresholds depend on the concept of the “relevant market”. Unlike many international jurisdictions that rely primarily on turnover-based thresholds, parties in the UAE must first conduct a market definition exercise before determining whether a filing obligation exists. Given the absence of detailed guidance on market definition methodology, businesses may need to adopt a cautious approach when assessing jurisdiction.
The Notification Process: More Than a Filing Exercise
The notification process is far more extensive than many businesses may expect but businesses can be at ease as we at Motei & Associates assist in such matters for smooth transactions, for more details, please contact.
A Structured Review Process
Following submission, the Ministry conducts a preliminary formal assessment within ten working days to determine whether the filing is complete. This period may be extended by an additional ten working days where necessary.
Once the filing is accepted, the Ministry proceeds to a substantive assessment. During this stage, the Ministry examines the structure of the transaction, market concentration levels, substitutability of products and services, barriers to entry, customer impact, and the likelihood that the transaction may create or strengthen a dominant position.
The Competition Law provides for a review period of ninety days, which may be extended by a further forty-five days. During this period, parties are prohibited from taking any steps to complete the transaction, making the UAE merger control regime both mandatory and suspensory in nature.
One particularly notable feature of the regime is that the expiry of the review period without a ministerial decision is deemed to constitute a rejection. This differs from many international merger control systems where silence may amount to deemed approval and highlights the importance of proactive engagement with the Ministry throughout the review process.
Third Parties Now Have a Seat at the Table
The Implementing Regulation introduces a greater degree of transparency into merger control proceedings by creating formal participation rights for third parties.
Once basic information regarding a proposed transaction is published on the Ministry’s website, competitors, customers, suppliers, and other interested parties may submit comments, evidence, or objections within fifteen working days. Parties lodging objections must demonstrate that they are genuinely affected and must support their submissions with evidence.
Where an objection is accepted for review, the parties to the transaction will be notified and provided with an opportunity to respond before the Ministry reaches its decision.
For businesses involved in strategically sensitive transactions, stakeholder management and confidentiality planning should therefore form part of the merger strategy from the beginning.
Failure to Notify Is Not a Shield
The Implementing Regulation makes it clear that failure to notify an economic concentration does not prevent the Ministry from reviewing the transaction. The Ministry may investigate and assess a transaction both before and after implementation and may request information from transaction parties and third parties regardless of whether a filing has been submitted.
This clarification significantly strengthens the Ministry’s supervisory powers and eliminates any uncertainty regarding the treatment of non-notified transactions. Completing a transaction without obtaining clearance does not avoid regulatory scrutiny; it merely shifts the risk to the post-completion phase.
Investigations and Enforcement Powers
Beyond merger control, the Implementing Regulation introduces detailed procedures governing complaints and investigations. Interested parties, including consumers and public authorities, may submit complaints regarding practices that affect their interests or harm competition.
The Ministry has been granted extensive investigative powers. These include the authority to issue information requests, examine business records, conduct on-site inspections, review electronic documents and IT systems, and obtain forensic copies of relevant materials.
Investigations generally proceed through a preliminary assessment stage, followed by a substantive review and the preparation of both preliminary and final investigation reports before a reasoned ministerial decision is issued.
Exemptions Under Competition Law
Businesses may seek exemptions from certain competition law restrictions where they can demonstrate that the relevant agreements or practices generate sufficient pro-competitive benefits.
Applicants must submit detailed market studies, economic analyses, financial statements, copies of the relevant agreements, and evidence showing that conduct contributes to economic development, increased efficiency, improved competitiveness, enhanced production or distribution systems, or consumer welfare.
Importantly, businesses seeking exemptions must generally refrain from implementing the relevant conduct until a decision has been issued by the Ministry.
Introduction of a Formal Settlement Mechanism
For the first time, the UAE competition regime now includes a formal settlement framework. A settlement may be initiated by the enterprise concerned or proposed by the Ministry.
Any settlement agreement must include an express admission of the infringement, a commitment to pay the agreed settlement penalty within the prescribed period, and binding company to cease the anti-competitive conduct and implement corrective measures.
A concluded settlement results in the termination of associated criminal proceedings and is generally not subject to administrative or judicial appeals. However, it does not eliminate civil liability towards parties that may have suffered loss as a result of the infringement.
Penalties and Consequences of Non-Compliance
The Competition Law provides for significant penalties in cases of non-compliance. Breaches may result in fines ranging from AED 100,000 to AED 5 million, or in certain circumstances between 2% and 10% of annual revenues or sales.
The courts may also impose additional sanctions, including the temporary closure of offending establishments for periods ranging between three and six months and publication of the judgment in local newspapers at the offender’s expense.
Given these potential consequences, competition law compliance should now form an integral part of corporate governance and transaction planning processes.
The publication of Cabinet Decision No. 59 of 2026 marks a defining moment in the evolution of UAE competition law. The Implementing Regulation completes the framework introduced by Federal Decree-Law No. 36 of 2023 and establishes a modern competition regime characterised by rigorous merger control procedures, enhanced enforcement powers, formal third-party participation rights, detailed exemption processes, and a sophisticated approach to assessing dominance and anti-competitive conduct.
For businesses operating in the UAE, competition law can no longer be viewed as a peripheral compliance issue. Whether reviewing commercial arrangements, designing pricing strategies, planning acquisitions, or entering into joint ventures, companies must now integrate competition law considerations into their decision-making processes from the outset.
As the new regime comes into force, businesses should proactively review their commercial practices, transaction pipelines, and compliance frameworks to ensure they are prepared for the increased scrutiny that will accompany the UAE’s evolving competition landscape. For dealmakers in particular, competition law clearance should now be regarded as a core component of transaction planning rather than a post-signing formality. The UAE competition regime has entered a new phase, and businesses that adapt early will be best positioned to navigate its opportunities and challenges.