The UAE's best defence in a stress test is its open market
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…
The United Arab Emirates (UAE) displays a robust defense in the face of economic challenges, primarily through its open and competitive market system. As the country's enterprises continue to expand and merge, competition policy assumes a more significant role in ensuring fair and accessible markets for all businesses and consumers.
While dominant players can emerge in markets due to natural market forces, the UAE's Federal Decree-Law No 36 of 2023 Regulating Competition prohibits abusive practices that stifle competition and harm consumers. These practices include exclusionary agreements, price discrimination, and price-fixing, among others.
Authorities in the UAE closely monitor dominant players to ensure they adhere to competition regulations, often imposing hefty fines for violations, which can exceed $100 million. However, many transactions undergo a swift approval process without an extensive examination, indicating a positive regulatory environment that supports business activity.
In recent years, concerns have arisen regarding cartel-like behavior among established market participants who collude to control market conditions and hinder new entrants. Such practices lead to artificially low prices, often resulting in losses for new competitors or consumers. The UAE authorities actively address these issues, rejecting transactions that breach competition laws or imposing conditions to ensure fair market practices.
The technology sector, in particular, faces unique challenges due to the prevalence of predatory pricing, where dominant firms offer products at deeply discounted prices to eliminate competition, leading to potential monopolies. The UAE authorities recognize the importance of maintaining a vibrant technology ecosystem while enforcing competition laws to prevent monopolistic tendencies.
Despite potential regulatory waivers in certain circumstances, the UAE's approach to competition policy remains flexible and supportive of economic growth. The authorities encourage dialogue with the private sector to address any market anomalies through regulatory waivers, demonstrating their commitment to fostering a competitive and thriving business environment.
Written by urgent.news from The National UAE's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
