During the second half of last year the UAE Cabinet approved two regulations that implemented key aspects of the 2012 UAE Competition Law. These regulations did not receive the publicity they deserve. As a result of their enactment, the body of competition legislation in this country has now come to life in earnest and is fully operational. Indeed, prior to the 2016 regulations, the Competition Law had largely not been put into practice because several key elements were not yet in place.
The UAE Competition Law governs three key areas of economic activity: transactions leading to concentrations between businesses, restrictive agreements, and actions that constitute an abuse of dominant position. On each of these fronts, the 2016 regulations provided crucial application parameters. In respect of economic concentrations, the combined market share that triggers the obligation to obtain pre-completion clearance has been set at 40 percent. In respect of restrictive agreements, only those between businesses whose combined market share exceeds 10 percent will be potentially subject to scrutiny by the Competition Regulation Committee. Lastly, the 2016 regulations established that an abuse of dominant position may only occur if the market share of the business allegedly abusing its position exceeds 40 percent.
Competition authorities in several countries have grappled with such matters for a long time, and have developed an analytical methodology and wide body of precedents in addressing issues such as the definition of relevant market. It is likely that the UAE Competition Regulation Committee will draw from their experience in developing its own interpretation of the law.
The very first notifications of economic concentration are now being processed by the Competition Regulation Committee, and an important body of precedents will soon start to develop. This is a space that specialist practitioners and leading economic operators should watch closely in the coming months.
Any opinions expressed here are the author’s own.
© Copyright Zawya. All Rights Reserved.