The New UAE Law in Market Competition
The UAE law imposed a new competition rules in which companies should prioritize to look at. The conformity of the more extensive, and local, operations with this particular new legislative framework is undoubtedly a strategy that will help Competition Regulation Committee, the Courts, and professionals to put the provisions of the UAE law into view.
Goals of the New UAE Law in Business Competition:
- Providing a stimulating environment for organizations as a way to improve competitiveness, efficiency as well as the interest of consumers. This will establish sustainable development in the UAE;
- Keeping a competitive marketplace regulated by the market mechanisms about the economic freedom principle. This will be used against a company prohibitive arrangements and activities which result in the misuse of a dominant position, controlling the processes of financial focus and preventing all that may prejudice, restrict or prevent rivalry.
Construction of the New UAE Law
The Law is ordered into several chapters, including the goals of Regulations as well as definitions, along with:
Use of the Law (coping with some exclusions);
- Anti-Competitive Practices;
- Economic Concentration;
- Rivalry Regulation Committee; and
- Duties of the Ministry
It’s going to be noticed in the stated goals of Regulations that introduces two significant new theories to the regulation of competition. In the UAE the type of the terms of these theories are “Dominant Standing “and “Economic Concentration.”
Dominant Standing: The standing that empowers any organization, in engagement with a few other organizations or by itself, from changing or controlling the relevant marketplace.
The UAE Law will make the provisions to be applied to all companies about their economic actions in the UAE. The law further applies to the exploitation of intellectual property rights abroad and whether in the UAE. The regulations are often used against economic actions, not in the state that impact competition in the UAE.
As an effect of the extent of the practical use of Regulations, people, corporate, and syndicates will need to contemplate their actions attentively. Whether in appreciation of franchising rights, protected innovation permitting, mergers and acquisitions or option business exercise. It is to ensure fitting consistency with all Regulations, likewise to ponder how their organization hones in different powers might influence rivalry in the UAE in light of the new Law.
The UAE law provides for special exclusions in respect of controlled sectors.
The new regulation have individual competition rules including Fiscal Telecoms and Transportation sectors.
The restrictive provisions which are considered prohibited are mentioned as a non-exclusive listing of examples, and contain methods that possess the aim or effect of:
- Price Fixing;
- Discovering states for supply or sale of services;
- Colluding practices, in bids and providing offers;
- Marketplace Sharing/ allotment and Section; and
- Restricting the free flow of goods/ services to lead commerce subject to costs that are man-made.
The provisions of the Law in UAE associated with restrictive arrangements so seem to restate at least some existing agreements contained in the Consumer Protection Law. It will also increase the detail in the Executive Regulations and with more serious punishments.
Visiting the costs or terms of reselling of services or commodities directly or indirectly.
- Performing a service using a price significantly less compared to the actual cost or selling a product thereof together with the purpose of causing them, excluding them from such marketplace or hindering competitive organizations from going into the applicable market losses that prevent them from continuing their actions.
- Discriminating with no reason among customers in indistinguishable contracts regarding the conditions of exchanging contracts or the values of commodities and services.
- Obliging a customer to not take care of an organization that is competitive.
- The partial or complete rejection in accordance to cope with the common commercial states.
- Unjustified abstinence from dealing in services and commodities through selling or purchasing or restricting or hindering such dealing that may lead into levying an unreal cost thereof.
- Freezing the reasoning of a purchasing or selling contract on the condition of taking duties concerning services or other commodities unrelated to the initial contract.
- Purposely print information that is wrong about its costs or the commodities.
- Fall or boost the available supply of the commodity to make an artificial shortage or abundance of the commodity.
- For what percent of a market share will be deemed to confirm a Dominant Position the threshold will be set by Cabinet choice.
The UAE law requires one-month loan application to be submitted for approving an amalgamation or acquisition trade.
An economic concentration trade may be supported by the Ministry of Economy if it could possess a favourable economic impact that outweighs any negative effect on competition, or if it’d not get an adverse effect on competition.
Punishments and Court Proceeding
The brand new Law provides for severe punishments that are unprecedented in UAE laws which range from AED500, 000 up to AED5 million. The fees are often visited by the portion of yearly income in the cases of economic concentration trades that were non-compliant.
Also, upon conviction, the court may order a company to be shut for an interval of no more than six months and no less than three months.
All competition court cases are allowed the edge of expedited cases, as well as the Law, allows for temporary injunctions and interim relief pending a final court ruling.
Regarding a criminal continuing, the Law stipulates that the Minister’s acknowledgment is requested to start any criminal arraignment of acts in opposition to Regulations. Regulations likewise approve the Minister of Economy to oblige any contradiction of the Law is exchanged to the Criminal Court consequently to get a settlement sum equivalent to no not as much as double the negligible discipline.
It is necessary to notice the Law expressly provides that no punishment will prejudice the right of an aggrieved party to get reparation with that violating party for damages resulting from its unlawful measures. The financial risk to companies contravening the UAE law is so not restricted to the fees provided for but extends to potential civil claims for damages.
DISCLAIMER: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific or legal advice on the information provided and related topics, please contact us.
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