News and developments
UAE's Competition Regulation: A Comprehensive Analysis of Federal Law No. 36/2023
This new legislation represents a remarkable development, focusing on competition practices and countering commercial monopolies.
The law aims to encourage fairness, competitiveness, and consumer protection through provisions, controls, and penalties designed to restrict anti-competitive behaviours and establish regulatory frameworks.
Key Definition within Federal Law No. 36/2023: According to Article 1 of the Federal Decree-Law No. 36/2023 describe the key definitions
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- Competition: Engaging in economic activities within market mechanisms without adverse influence or restrictions detrimental to trade, development, or consumer interests.
- The Relevant Market: Encompassing interchangeable products or services meeting specific consumer needs based on price, characteristics, and uses, within a specific geographical location.
- Establishment: Any entity involved in Economic Activity, regardless of legal form, including main offices, branches, or associated individuals or groups.
- Agreements: Any cooperation, written or verbal, explicit or implicit, between two or more Establishments.
- Dominant Position: An Establishment with the capability to control and influence activities within a Relevant Market.
- Economic Concentration: Actions resulting in the transfer of ownership or usufruct rights, granting control over another Establishment or a group.
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- Emphasis on economic freedom, prohibiting anti-competitive agreements, and preventing abuse of dominant positions.
- Close monitoring of Economic Concentration processes.
- Applicability to all Establishments engaged in Economic Activities within or outside the UAE, including intellectual property rights
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- Comprehensive framework targeting abuse of dominant positions, unfair pricing conditions, discrimination, and excessive control over production.
- Addresses exploitation of economic dependency, promoting fair dealings.
- Proactive stands against offering goods or services at unreasonably low prices to prevent exclusionary practices and unethical pricing strategies.
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- Detailed exemptions balancing economic development with fair competition.
- Article 11 allows exemptions for specific contract categories required for economic growth.
- Clear conditions for economic awareness operations and regulatory oversight outlined in Articles 13 and 14.
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- Establishment of the Regulatory Committee with outlined competencies.
- The Competition Regulatory Committee reports to the Minister, proposing competition protection policies and offering recommendations on exempting certain practices.
- The Ministry is authorized to implement competition policy, coordinate with authorities, investigate anti-competitive practices, and issue complete reports on competition.
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- Fines may range from AED 100,000 to 10% of annual total sales.
- In cases of determining total sales challenges, fines between AED 500,000 and AED 5,000,000 may be imposed.
- Closure of an establishment for a period not exceeding 6 months.
- The judiciary may issue decisions to stop or prevent actions until a final decision.
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- Interested parties may granted the right to file complaints with the Ministry or the Concerned Authority.
- In specific instances, criminal proceedings may be initiated with a required written request from the Minister.
- There is an opportunity to file a written grievance within 15 working days from the date of notification and may file an appeal in case of rejection.