Comparison of UAE and KSA competition laws

The recent wave of mergers and acquisitions in the Middle East, prompted by increased investment in the region, have compelled a significant evolution of antitrust and competition laws in the Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE). Both countries have adopted both a proactive and reactive approach to merger control and antitrust enforcement, wherein the local competition authorities (i) require submission of certain market transactions to the relevant competition authority to assess potential impacts on competition, and (ii) proactively investigate complaints and address anti-competitive behaviour. Of particular note, the UAE has recently revamped its competition regime, introducing a new competition law effective from 29 December 2023.

Against this backdrop of heightened antitrust activity and evolving regulatory frameworks, an examination of the competition laws of the UAE and KSA offers valuable insights into the shifting dynamics of antitrust and competition policy in the Middle East.

The UAE’s new competition law, Federal Decree-Law No. 36 of 2023, replaces the previous legislation but maintains oversight under the Competition Regulatory Committee within the UAE’s Ministry of Economy. However, detailed operational guidelines, particularly regarding merger control, are pending in the implementing regulations, which are expected in June 2024 (the Implementing Regulations). Until the publication of the Implementing Regulations, existing regulations under the previous competition law, Federal Decree-Law No. 4 of 2012, remain effective.

Navigating merger control: A unified approach amidst diverse landscapes

Merger control regimes vary across the Middle East, yet they share fundamental principles that guide their implementation. For example, companies must seek approval for their transactions when specific turnover thresholds are met.

In most cases, merger control regimes operate on a suspensory basis, prohibiting companies from finalizing deals without regulatory approval to prevent premature consummation of the transaction or “gun jumping,” which typically result in monetary penalties. Regulators assess deals to determine their potential impact on the market, considering various factors that may differ from one jurisdiction to another. Timelines for review and approval may also vary and the extent of regulatory authority may differ.

In the following table, we outline the commonalities and disparities among merger control regimes across the UAE and KSA, shedding light on their nuanced approaches to deal scrutiny and regulatory oversight.

1 The Implementing Regulations have not been issued yet but are anticipated to be released in June 2024. Meanwhile, the regulations, decisions, and decrees established under the 2012 law will remain in effect until they are superseded (Article 39 of the UAE Competition Law) to the extent they are not in conflict with the UAE Competition Law.
2 This marks a departure from the previous law, where specific sectors like telecommunication and oil & gas were automatically exempt.

 
Authored by: Edoardo Betto*, Sophia Niazi
*Member of ZH Partners – Relationship firm in Saudi Arabia