UAE Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Khaled Abuorabi and Habiba Wahdan, GLA & Company
works, facilities or any physical or digital infrastructure it owns or exploits if this is the only basic and economically feasible solution for practicing economic activity or entering the “relevant market”. The triggering factors to consider whether trans - actions involve the transfer of shares or assets or not through a “restrictive agreement” or an abuse of a dominant position would be: • whether the relevant undertakings meet the threshold identified in the Competition Threshold Rules, which is always the first step; and • if yes, determine whether the activity or trans - action falls within any of these prohibitions. 2.4 Definition of “Control” “Control” is not a defined term under the UAE Competition Legislation. ”Control” in the context of UAE merger control will only be relevant in two instances. The first instance is the percentage of “control” required by Federal UAE or local governments over undertakings to consider whether or not these undertakings are exempted from the appli - cation of the UAE Competition Legislation. If the direct or indirect ”control”, by the Federal or local government over an undertaking is 50% or more, then the undertaking is exempted from the UAE Competition Legislation. If the “control” is less than 50%, then it will need to meet the threshold under the Competition Threshold Rules before being captured by the requirements or prohibi - tions contained in the Competition Law. The second instance is to identify the controlling undertaking in the event of “economic concen - tration” as determined under the Competition Law. The purpose of identifying the controlling
undertaking is to name it as being responsible for complying with the regulatory requirements under the UAE Competition Legislation. 2.5 Jurisdictional Thresholds The Competition Law includes turnover and mar - ket share thresholds, the amounts and percent - ages of which will be defined in the new Imple - menting Regulations. In the interim, the three jurisdictional thresholds under the Competition Threshold Rules will be adhered to, which, if met, then require the regulatory notification request - ing exemption in addition to the other obliga - tions and restrictions under the UAE Competi - tion Legislation. These jurisdictional thresholds are as follows. • “Restrictive agreements”: if these ”agree - ments” represent 10% or more of the total transactions of the undertaking in the “rel - evant market” with regards to a specific product and/or service. • “Dominant position”: this is assumed if the market share of an undertaking exceeds 40% of its transactions in the ”relevant market” with regards to a specific product and/or service. • “Economic concentration”: the ”economic concentration” transaction will lead the undertaking if: (a) the total annual sales value of these establishments in the “relevant market” in the country during the last fiscal year exceeds AED300,000,000 in the last fiscal year; or (b) the total share of these establishments exceeds 40% of the total transactions in the “relevant market” in the country during the last fiscal year. It is worth mentioning that total transactions are defined under the general principles of EU competition laws (on which the Competi -
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