Prohibiting Abuse of Dominant Position Under New UAE Competition

Big companies are not illegal. Being successful is not suspicious. Owning a large slice of a market is not, by itself, a villain origin story. But when a business starts acting like the market is its private living room and everyone else should wipe their feet before entering, the UAE’s new competition framework starts paying very close attention.

That is the heart of prohibiting abuse of dominant position under new UAE competition law. The UAE has modernized its competition regime through Federal Decree-Law No. 36 of 2023, and the result is a sharper, more structured system for policing market power. The message is simple: holding a dominant position is not the offense; abusing it is.

For companies operating in the Emirates, especially in concentrated sectors such as digital platforms, distribution, logistics, healthcare, retail, infrastructure, and industrial supply, that distinction matters a lot. It means a business can be large, efficient, and even hard to beat, but it cannot use its power to choke off rivals, punish customers, distort pricing, or create artificial barriers to entry. In other words, winning on the merits is fair game. Winning by tipping over the board is not.

What Changed Under the New UAE Competition Framework?

The UAE’s updated competition regime replaced the older framework with a broader and more practical set of rules. It now speaks more directly to the real ways market power gets used in modern commerce, including conduct involving distribution systems, pricing strategies, customer restrictions, and even digital infrastructure.

One major shift is that the law does not look only at classic cartel behavior or merger control. It also targets abuse of dominant position, abuse of economic dependence, and predatory pricing. That makes the system feel less like a narrow rulebook and more like a real operating manual for fair competition.

Another important point is scope. The law applies not only to business activity inside the UAE, but also to conduct outside the country that affects competition within the UAE. So if a multinational group thinks geography is a magic invisibility cloak, that theory may not age well.

What Counts as a Dominant Position?

Under the new regime, dominance starts with the relevant market. That means regulators first ask two practical questions: What products or services are really competing with each other? and In what geographic area does that competition happen? If you sell a product that customers cannot easily substitute, and you sell it in a market where alternatives are limited, your market power may be stronger than you think.

The 2025 Cabinet Decision set the market-share threshold for dominance at more than 40% of total transactions in the relevant market. That gives companies a useful benchmark. But it is not a cozy blanket to hide under. The law also recognizes dominance where an undertaking has the ability to influence the market in a way that harms competition. So a company should not assume that falling below 40% is an automatic hall pass.

The law also contemplates dominance held individually or jointly with other undertakings. That matters in industries where supply, technology, access, or distribution channels are concentrated among a few players. A business may not feel like a monopolist, but if it can shape market outcomes, regulators may still treat it like a very important grown-up in the room.

What Conduct Is Actually Prohibited?

This is where things get real. Article 6 lays out a non-exhaustive list of conduct that can amount to abuse. Here are the big categories, translated into normal human language.

1. Imposing unfair prices or resale conditions

A dominant company cannot directly or indirectly force prices or resale conditions onto the market in a way that distorts competition. That could mean pressuring distributors into resale terms that leave no room for rivals, or using power over supply to dictate commercial conditions that customers cannot realistically refuse.

2. Selling below actual cost to block competitors

Discounts are not illegal. Everyone loves a discount, especially when it is not attached to a mysterious 47-step rebate form. But selling below actual cost with the aim of stopping competitors from entering the market, forcing them out, or inflicting losses that stop them from continuing is a classic warning sign. The law targets the use of below-cost pricing as a weapon, not as a healthy promotion.

3. Discriminating between similarly situated customers

A dominant undertaking cannot unjustifiably treat customers differently in identical contracts regarding price, quality, or terms. If two customers are truly in the same position, but one gets favorable treatment and the other gets punished for competitive reasons, that can raise serious issues under UAE competition law.

4. Forcing customers not to deal with competitors

This is the competition-law version of “you can’t sit with us.” A dominant company cannot oblige customers not to deal with a rival. If a powerful supplier uses leverage to tie up retailers, distributors, or commercial partners so competitors are frozen out, that looks less like good salesmanship and more like exclusionary conduct.

5. Refusing to deal without objective justification

The law prohibits total or partial rejection of transactions on usual commercial terms without justification. A dominant company does not have to do business with everyone on Earth, but it does need a legitimate reason for saying no. Credit risk, compliance concerns, capacity limits, and technical constraints may be valid. “Because we can” is not exactly the gold standard of legal reasoning.

6. Refusing, limiting, or hindering trade in a way that leads to unreal prices

The law also targets conduct that interferes with the sale or purchase of goods or services in a way that produces artificial pricing. That makes this provision especially relevant in supply-chain-heavy industries where a dominant player can manipulate access, volumes, or timing to bend the market.

7. Tying unrelated goods or services

A dominant company cannot make a contract for one product or service conditional on the customer accepting unrelated obligations involving another product or service. If a customer wants Product A, and the dominant firm says, “Great, but only if you also take Product B, C, and a mystery box,” the competition-law alarm bells may start ringing.

8. Publishing false information about products or prices

This one is particularly important because it reaches conduct that businesses sometimes misclassify as mere commercial rivalry. Intentionally publishing incorrect information about products or their prices can be abusive when done by a dominant undertaking. If a market leader spreads false claims about a rival’s goods, authenticity, or pricing to damage competition, that is not “spirited competition.” That is a legal problem wearing a marketing costume.

9. Manipulating supply to create artificial scarcity or abundance

The law prohibits reducing or increasing available supply to manufacture artificial scarcity or oversupply. In practical terms, that means a dominant player cannot play thermostat with the market just to make prices jump, crash, or pressure competitors into bad positions.

10. Limiting production, markets, or technological development

Dominant firms cannot use their position to suppress output, restrain market development, or slow technology progress. This matters in fast-moving sectors where a gatekeeper can decide whether innovation gets oxygen or gets quietly locked in a drawer.

11. Blocking access to essential physical or digital infrastructure

One of the most modern features of the law is its focus on access. A dominant undertaking may not unjustifiably prevent or obstruct other businesses from using its private networks, facilities, or physical or digital infrastructure when that access is the only essential and economically feasible path to carrying out economic activity or entering the relevant market. That is a big deal in platform businesses, utilities, logistics hubs, and infrastructure-heavy industries.

Why This Feels Stricter Than Before

The new UAE competition framework feels tougher because it is tougher. It is broader in scope, more detailed in its treatment of market power, and more aligned with how antitrust risk appears in the real world. It also sits alongside new rules on economic dependence and predatory pricing, which means businesses cannot rely on old-school arguments that only cartel conduct or obvious monopoly behavior matters.

There is also a practical reason the new framework feels sharper: companies can no longer treat dominance analysis as a purely academic exercise handled once a year in a presentation nobody reads. It now needs to be part of pricing, contracting, product design, access policies, sales incentives, and distributor management.

Can a Dominant Company Ever Defend Its Conduct?

Yes, but the key word is justify. Competition law usually cares less about polished business slogans and more about documented, objective reasons. If a company refuses supply because of verified credit concerns, genuine capacity limits, security risks, or regulatory obligations, that is very different from refusing supply to punish a customer for talking to a rival.

The UAE regime also includes an exemption pathway for certain agreements or practices that can be shown to promote economic development, improve performance and competitiveness, develop production or distribution systems, or generate consumer benefit, provided they do not go beyond what is necessary and do not eliminate competition in the market. That is not a free pass. It is a structured process, and businesses need evidence, not wishful thinking.

How Enforcement May Work in Practice

The Ministry has formal powers to receive complaints, collect information, investigate anti-competitive practices, and coordinate with relevant authorities and sector regulators. Recent complaint guidance also makes one point especially clear: not every private business dispute is automatically a competition case. To become a real abuse-of-dominance matter, the conduct must affect market conditions, not just hurt one unhappy trader.

That distinction matters. A rejected distributor may feel wronged, but the stronger competition complaint is the one that shows broader market impact: blocked entry, distorted pricing, damaged consumer choice, reduced output, exclusion of rivals, or restricted access to an essential channel.

There is another practical twist: public enforcement case law in the UAE is still not as thick as in older antitrust jurisdictions. So companies should not wait for a dramatic, headline-grabbing abuse case before upgrading compliance. In newer regimes, complaint-driven enforcement can move faster than published precedent.

Penalties: Why Businesses Should Not Treat This Lightly

For violations of Article 6 and the related competition provisions, the law allows for fines of at least AED 100,000 and up to 10% of the annual total sales realized in the UAE during the last fiscal year. If annual sales cannot be computed, the fine can range from AED 500,000 to AED 5 million.

That is already serious. But the legal sting does not stop there. The court may also order closure of the undertaking for a period ranging from three to six months, and it may require publication of the judgment in local newspapers at the violator’s expense. So yes, the compliance memo you postponed because it “didn’t seem urgent” may have just become much more interesting.

What Smart Companies Should Do Now

1. Define your relevant market honestly. Do not assume you have plenty of competition just because your internal slide deck says so.
2. Audit pricing policies. Review discount campaigns, rebates, loyalty structures, and below-cost promotions for exclusionary risk.
3. Review exclusivity and refusal-to-deal practices. Make sure restrictions, allocations, and denials have objective business reasons.
4. Stress-test access rules. If your network, platform, facility, warehouse, interface, or infrastructure is commercially essential, access decisions need careful scrutiny.
5. Train commercial teams. Competition risk often starts in sales, distribution, and product strategy before legal hears about it.
6. Document justification. If a decision is lawful, prove it with records, consistent criteria, and a clean decision trail.

Conclusion

The new UAE competition regime sends a clear message to powerful businesses: dominance is not a sin, but using dominance to distort competition is. The law goes after the familiar abuse patternsbelow-cost exclusion, discrimination, tying, unjustified refusal to deal, false information, supply manipulation, and barriers to market accesswhile also speaking more directly to modern commercial realities, including digital and infrastructure bottlenecks.

For businesses, the practical lesson is straightforward. If your company can influence prices, control access, dictate terms, or shape whether rivals survive, then competition compliance is no longer a side quest. It is part of corporate strategy. The smartest organizations will not ask, “Are we dominant enough to worry?” They will ask, “Are our decisions defensible, documented, and fair to the market?”

In the UAE’s updated framework, that is the difference between competing hard and competing unlawfully. And that difference can be expensive.

Practical Experiences and Lessons From the Field

The following are illustrative, composite business experiences based on the kinds of conduct the new UAE competition rules target. They are not presented as named public cases, but as realistic compliance lessons.

One common experience involves a strong supplier that believes it is simply “protecting the brand.” The company starts by asking retailers to keep certain display standards, which sounds harmless. Then the requests become pressure. Retailers are nudged not to stock rival products, warned that discounts may disappear if they buy elsewhere, and quietly reminded that supply priority goes to loyal partners. Internally, the business sees this as smart channel management. From a competition perspective, it can begin to look like a dominant supplier using commercial leverage to shut competitors out of the market.

Another experience appears in digital businesses. A platform operator controls access to an interface, marketplace, network, or data layer that smaller businesses realistically need in order to compete. At first, access is open. Later, once the platform’s own downstream services grow, access becomes slower, more expensive, more selective, or wrapped in technical conditions that conveniently burden rivals but not the platform’s own business units. Teams often describe this as an “operational decision” or a “product architecture choice.” Under the new UAE framework, however, blocking access to essential physical or digital infrastructure without objective justification can become a serious abuse-of-dominance issue.

A third experience centers on aggressive pricing. Senior management wants market share quickly, so prices are pushed below actual cost for a sustained period. The public story is cheerful: customer value, growth, momentum, market excitement, the usual confetti. The private strategy documents, however, tell a different story. They talk about exhausting a new entrant, starving a smaller rival of margin, or making the market too painful for competitors to stay. That is the moment when a discount strategy stops looking like healthy competition and starts resembling exclusionary conduct. The problem is not low prices alone. The problem is low prices used as a tactical weapon to damage the competitive process.

Then there is the rumor problem, which many companies still underestimate. A dominant player hears that a rival is gaining traction, so sales teams start telling customers the rival’s products are unsafe, fake, overpriced, or non-compliant. No one writes the message neatly in a policy document, of course. It spreads through calls, chats, informal meetings, and off-the-record comments. Businesses often treat this as ordinary rough-and-tumble competition. In reality, false information from a market leader can distort purchasing decisions and damage the market far beyond one competitor’s bruised feelings. That is exactly why the new framework takes it seriously.

The practical lesson from all of these experiences is wonderfully unglamorous: companies with market power need discipline. They need internal rules on pricing, access, distribution, sales messaging, and customer treatment. They need records showing objective reasons for difficult commercial decisions. And they need leadership willing to accept that “because we’re the market leader” is a terrible compliance policy, even if it sounds very confident in a boardroom.