The need for competition policies to play a broader and more effective role in the economic life of the United Arab Emirates is growing by the day.
As companies continue to expand and merge, some markets have become increasingly difficult for new entrants or even existing firms to penetrate, owing to the dominance of a limited number of major players, long-standing understandings among a group of competitors, or exclusionary agreements between companies operating within the same supply chain.
While such practices may evolve naturally through market forces, keeping them within proper bounds remains essential to ensuring that markets stay open, fair, and capable of serving consumers' interests and stimulating economic activity.
These issues take on added importance given the exceptional circumstances facing the region and the world at a time when the UAE has demonstrated a high capacity for resilience and flexible responses to challenges.
Strengthening supply-chain security and diversifying capital flows can only be achieved by expanding current market structures, attracting new investors, and opening the door for existing companies to grow and connect with new markets.
Competition policies may never have been more important to the UAE economy than they are today. Current developments confirm that the UAE — and Dubai in particular — is called upon to continue entrenching the principles of a free economy and reinforcing its standing as a global gateway for business, trade, and logistics.
At the same time, existing companies must be reassured that their role will remain central to supporting the national economy, including large and dominant firms.
The existence of an entity with a dominant market position does not in itself constitute a violation. No company may be penalised merely for its success or commercial expansion. What Federal Decree-Law No. 36 of 2023 on the Regulation of Competition prohibits is the abuse of a dominant position, within a legislative framework designed to align with best international practices.
The abuse of dominance can take many forms, including refusing to sell raw materials with the aim of excluding a competitor, imposing exclusive purchasing requirements in exchange for preferential prices, controlling prices and resale conditions, or unjustifiably discriminating among market participants.
For this reason, competition authorities around the world investigate such practices and impose heavy fines that can exceed hundreds of millions of dollars — particularly in cases involving tying the sale of one product to another, restricting production or technical development, or obstructing competitors' market expansion.
This underscores the importance of the proactive supervisory role that competition authorities play in monitoring markets and curbing harmful concentrations of economic power.
Both the Organisation for Economic Co-operation and Development and the United Nations Conference on Trade and Development (UNCTAD) stress the importance of subjecting major mergers and acquisitions to oversight in order to preserve market fairness and balance. As a result, competent authorities may require specific measures or commitments before approving certain transactions.
Nevertheless, international statistics indicate that the majority of mergers are approved without the need for in-depth reviews, reflecting regulators' commitment to avoiding the creation of unjustified barriers to economic activity.
In another dimension, cartel practices represent an equally serious challenge. Companies with long-established positions may resort to undisclosed understandings aimed at keeping the market under their control or preventing new competitors from entering.
The danger of such behaviour lies in the fact that prices are no longer subject to the forces of supply and demand but instead become hostage to the decisions of a limited group of competitors.
In some cases, prices may be cut to loss-making levels simply to drive out new entrants and send a message that the market is closed to them.
Conversely, consumers may find themselves compelled to absorb price increases that have no genuine economic justification and serve only to maximise the profits of these cartels.
Numerous international experiences have shown that some multinational companies, upon entering new markets, may resort to a «predatory pricing» strategy — selling products or services at abnormally low prices in order to drive out existing competitors and deter new ones from entering.
In 2019, the European Commission imposed a fine of 242 million euros on the American company Qualcomm for selling electronic chips below cost with the aim of harming a British competitor that subsequently became part of the Nvidia group.
Although this type of violation is difficult to prove legally — because intent must be established — competition authorities frequently resort to other regulatory tools and corrective measures to restore market balance.
The technology sector has posed exceptional challenges to competition authorities worldwide, witnessing the largest fines in the history of competition law alongside the introduction of legislation specifically targeting giant digital companies. The importance of such regulations has become increasingly apparent in recent years as economic and trade tensions have escalated between the United States and several of its key trading partners in Europe and the Americas.
In the UAE, the competent authorities continue to develop a supportive environment for the growth of technology companies and the digital economy without impediments, while at the same time ensuring that this growth remains consistent with national legislation.
The country also adopts a flexible approach that allows, where necessary, for certain specific regulatory exemptions or waivers to be granted in order to promote economic development and serve the public interest.
At this juncture, and within the framework of supporting the continued flow of goods and services in UAE markets, we welcome constructive dialogue with the private sector to address any practices that may affect market competitiveness — whether through the granting of temporary regulatory exemptions, direct intervention, or the use of legal tools available to the Competition Department at the Ministry of Economy and Tourism.
The UAE is committed to protecting its economy and society during these exceptional circumstances, and is pressing ahead with sustaining market momentum and the economic growth the country has experienced over past decades.