Published February 2017
The first anti-trust and competition legislation was introduced in the United Arab Emirates (“UAE”) in October, 2012 through the publication of the UAE Federal Law No 4 of 2012 on the Regulation of Competition (the “2012 Law”) and has been in force since 23rd February, 2013. The primary aim of 2012 Law is to promote and protect competition in the UAE.
The following regulations were subsequently introduced to set out the procedure and application of the 2012 Law:
(The 2012 Law, 2014 Regulations and the 2016 Regulations are hereinafter collectively referred to as the “Competition Law”)
The Competition Committee
The 2012 Law established the Competition Regulation Committee (the “Committee”) which is to be chaired by the undersecretary of the Ministry of Economy (“Ministry”). The Committee’s role is to oversee the work of the competition department (the “Department”) of the Ministry which has the task of the day to day handling of applications, investigations and the implementation of the Competition Law.
Scope of Application
The 2012 Law applies to all entities undertaking commercial activities in the UAE. The 2012 Law also applies to economic activities conducted outside the UAE which may potentially affect competition within the UAE. However, the 2012 Law stipulates that the following sectors are exempted from provisions of the Competition Law:
The 2012 Law is similar in many respects to the antitrust legislation of UAE’s regional counterparts and focuses primarily on regulating three (3) areas:
It is important to be aware of the wide powers that the Ministry has to, on its own initiative, commence an investigation into possible violations of the Competition Law. In addition, any interested party may file a complaint with the Department alleging breaches of the Competition Law.
Much like in other jurisdictions, the 2012 Law requires the Ministry to take steps to maintain as confidential, information deemed sensitive by applicants in relation to any application filed with the Department. To claim confidentiality, parties should indicate the same on information submitted as part of their application and also submit non-confidential summaries of the same.
Both the 2012 Law and the 2014 Regulations, set out the penalties applicable for a breach of the Competition Law. In addition to the penalties, the 2012 Law provides that an offending party may be temporarily closed down by the competent Court for a period between 3 months and 6 months.
Review and appeal of a decision
Where an applicant is dissatisfied with the decision of the Minister, such applicant may request a review of the decision by the Minister himself within fourteen (14) days from the date on which the applicant becomes aware of this decision. The 2014 Regulations set out the specific timelines by which the Minister is required to revert to the applicant. Decisions issued by the Minister can be appealed before the competent Court.
The Competition Law will result in businesses having to reassess their deal structures in light of the potential extraterritorial reach which the Competition Law may have. The Competition Law is also likely to have significant implications in relation to merger and acquisition transactions involving entities which have a global presence and operate in the UAE in respect of any cross-border transactions which such entities propose to complete and which would impact economic concentration in the UAE. These entities should consider the possibility that an additional approval may be required in the UAE for the completion of these transactions. For parties seeking to invest in the UAE and companies which are already operating in the UAE, it is important to consider the impact of the Competition Law on any transaction or business arrangement which they are contemplating. It would be advisable to engage with the Ministry at an early stage so that any questions may be answered and relevant applications made, prior to the parties entering into a restrictive trade practice, partaking in behaviour that may lead to an abuse of a dominant position or a notifiable concentration.
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