There is a growing need for competition policy to play an expanded role in economic life in the UAE. As companies continue to grow and consolidate, markets are becoming increasingly challenging to penetrate by new market entrants or break new ceilings for existing businesses in no small part due to the dominance of larger players, long-standing understandings by a group of competitors or exclusionary agreements between companies that contribute to the same supply chain. Although these practices tend to develop over time due to market forces, they need to be kept in check to ensure that markets remain free, accessible to businesses and serve consumers’ needs.
These issues are especially important during the exceptional circumstances that the UAE faces, while demonstrating exceptional resilience in response. However, mitigating supply chain risks and diversifying the flow of capital will require expanding current market structures by attracting new entrants and expanding connectivity for existing businesses. Never was competition policy more important to the UAE economy than the stress test currently at play. The results prove that the UAE, and Dubai in particular, should continue to double down on its free-market economy principles and expand its financial gates, seaports and overall business ecosystem.
Existing market participants should be reassured as they will continue to be the backbone of the economy, including larger players. The presence of dominant players in a market does not immediately suggest foul play, as one should not be penalised for simply operating a growing and successful business. It’s the act of abusing a dominant position that is prohibited in the UAE by way of Federal Decree-Law No 36 of 2023 Regulating Competition, which is designed in line with international best practices. Abuse may occur in many forms, including conduct that aims to exclude a competitor by refusing to sell raw material, requiring consumers to exclusively buy from the dominant player to secure lower prices, setting prices or resale conditions or discriminating between market participants. Competition authorities across various jurisdictions frequently investigate the abuse of dominant positions and levy hefty fines (often exceeding $100 million) for behaviours such as tying sales to the purchase of other products or services provided by the dominant player, limiting production or technological advancement or obstructing competitors from expanding their networks.
Competition authorities are required to proactively ensure that dominant players are monitored. International standard setters such as the Organisation for Economic Co-operation and Development (OECD) and the UN Conference on Trade and Development (Unctad) recommend that countries should control mergers and acquisitions between large market participants to maintain fair and equitable markets. As a result, authorities may reject certain transactions or require conditions to be met in order to proceed. However, statistics from competition authorities reveal that most transactions are approved without an in-depth review – which is a positive indicator as it does not create additional regulatory barriers that stand in the way of business activity.
Cartel-like behaviour in markets around the world is another hurdle established by some longstanding market participants who arrive at the understanding that they can co-operate to keep a certain market under their control or prevent new competitors from entering. The danger surrounding such behaviour is that prices are not set by market forces; rather, the cost of a product or service fluctuates based on the whims of the cartel participants. In circumstances where a new firm may be posing a threat, prices are lowered even to a loss-making level only to ensure that the latecomer realises that there is no room for entry in this market. At the same time, consumers may be left with no choice but to accept higher costs if the cartel decides to increase prices, whether it’s due to a fundamental basis such as supply chain changes or merely to expand their coffers.
Across many countries, it has been evidenced that some multinational corporations, when expanding into new markets, resort to the centuries-old practice of predatory pricing. In essence, the practice occurs when larger players rely on their deep pockets to provide a product or service at a substantially low price, with the aim of bankrupting existing participants (often national brands) and preventing new ones from joining the market. In 2019, the European Commission fined US chipmaker Qualcomm €242 million for selling computer chips below cost to disrupt a British competitor which is now part of the Nvidia group. While predatory pricing is difficult to prove as evidencing intent is required, competition authorities often resort to other legal avenues to correct the market, including prompt regulatory actions and administrative fines.
The technology sector in particular has posed unique challenges for competition authorities, attracting the largest fines in history and regulations directed towards globally dominant firms exclusively. The significance of such regulations came into the spotlight in 2025 as tensions rose between the US and its closest trading partners in Europe and the Americas. In the UAE, the authorities continue to enhance the ecosystem needed for technology firms to grow without any impediment, while also ensuring that such growth does not breach national legislation. Nevertheless, the UAE’s stance is flexible and the authorities may waive certain competition laws in specific circumstances to promote economic development.
At this juncture, and in order to support and maintain the flow of products and services throughout UAE markets, we welcome discussions with the private sector to correct any market behaviours by way of regulatory waivers, direct intervention or other legal tools available to the Competition Department at the Ministry of Economy and Tourism. The UAE is committed to safeguarding its people and economy during these exceptional circumstances and will work towards bringing back the momentum that our markets are accustomed to.
