Publishing a recommended resale price still requires scrutiny of how that price operates in practice. The starting point is whether distributors can discount independently and whether a lower price causes them to lose rebates, promotional support or supply.

The regulatory sources cited in this article were verified in October 2026. This is the verification date, not the publication date of the legislation. Application of the rules remains subject to the latest official publications, the effective Arabic legislation and advice from UAE competition counsel based on the facts of the case.

The same channel policy may engage three legal routes: restrictive agreements, abuse of a dominant position and abuse of economic dependence. Each has a different premise, and they may overlap. A low market share does not remove the restrictive-agreement question, while exceeding a dominance threshold does not by itself make a pricing practice unlawful.

Calling a price “recommended” in a distribution agreement proves only how the contract labels it. The position changes when a salesperson demands an immediate price correction, a system blocks promotions below a set price, or discounting automatically triggers a penalty. In those circumstances, the distributor may have little genuine freedom to set its resale price.

Under Article 1 of Federal Decree-Law No. 36 of 2023, an agreement is not limited to a signed written contract. Oral, express or implied, public or confidential arrangements and cooperation between enterprises may also fall within review. Emails, instant messages, meeting notes and verbal instructions cannot be left out merely because they do not appear in the distribution agreement. (Source: Federal Decree-Law No. 36 of 2023; verified October 2026.)

Article 5 covers agreements whose object, purpose or effect is to distort, diminish, prevent or restrict competition, including arrangements that directly or indirectly set prices or determine trading conditions. This route does not first require proof that the brand is dominant or that the distributor is economically dependent. A low market share is relevant evidence, but it is not a safe harbour for a resale-pricing policy. (Source: Federal Decree-Law No. 36 of 2023; verified October 2026.)

What happens to rebates and supply after a distributor discounts?

Price communications should be reviewed alongside rebate and supply decisions. If a distributor discounts, does the brand cancel a rebate, withdraw promotional support, impose a fine, reduce allocation, delay delivery or terminate the agreement? These consequences may show that a stated recommendation is being enforced through commercial pressure.

A reduction in allocation or a pause in supply may also result from limited inventory, credit risk, overdue payment or a performance issue unrelated to price. The brand should retain the objective criteria and approval record used when the decision was made, then check whether the written rule matches the action taken. A reason documented after the event cannot replace contemporaneous evidence.

Changing “minimum resale price” to “recommended resale price” does not resolve the underlying issue when rebate deductions, price-correction demands or supply restrictions still compel compliance. A refusal to supply is not automatically unlawful either. The review must examine its connection to the pricing issue, the commercial reasons relied on at the time and whether comparable cases were handled under consistent standards.

The restrictive-agreement route examines the agreement’s object, purpose or effect. It covers direct or indirect price setting and trading conditions without requiring dominance or economic dependence as a prior condition.

The abuse-of-dominance route begins by defining the relevant product and geographic markets and determining whether the enterprise holds a dominant position. It then examines the purpose or effect of conduct such as imposing resale prices, refusing to deal without objective justification or restricting supply. Dominance itself is not unlawful.

The abuse-of-economic-dependence route first asks whether the customer lacks an alternative solution for marketing or supply. Only then does the analysis turn to resale prices, trading conditions, refusal to deal or supply restrictions. A long relationship, a high purchasing concentration or substantial switching costs may be relevant evidence, but none of them alone replaces the requirement that no alternative solution is available. This route does not require prior proof of dominance across the relevant market. (Source: Federal Decree-Law No. 36 of 2023, Articles 5–7; verified October 2026.)

A single rebate cancellation or supply decision may engage more than one route. An operating team cannot select the most convenient route and use it to exclude the others.

Why is the 40% threshold not a conclusion on resale pricing?

Article 2 of Cabinet Resolution No. 3 of 2025 provides a quantitative route to assessing dominance when an enterprise’s individual or combined transaction share exceeds 40%. The wording is “exceeds 40%”: reaching 40% is not the same as exceeding it. Crossing the threshold also does not establish that a particular pricing practice is unlawful. (Source: Cabinet Resolution No. 3 of 2025; verified October 2026.)

Cabinet Resolution No. 59 of 2026 took effect on July 30, 2026 and was listed as Active on the official page when verified in October 2026. Its Article 2, read with Article 6(2)(b) of Federal Decree-Law No. 36 of 2023, also preserves a qualitative route based on the ability to influence the market. Technical and financial capacity, barriers to entry, substitute products, and exclusive or long-term relationships may affect that assessment. A share at or below 40% is therefore not a safe harbour. (Source: Cabinet Resolution No. 59 of 2026; verified October 2026.)

The review must still define the relevant product and geographic markets, assess whether the enterprise holds a dominant position, and then examine the specific pricing or supply conduct, its purpose and effect, and any objective justification.

Does sector regulation or government affiliation exclude the law?

Article 3 of Federal Decree-Law No. 36 of 2023 covers economic activities within the UAE as well as activities conducted outside the UAE that affect competition within it.

Sector regulation does not automatically exclude the competition law. Article 4(1) requires another law governing the relevant goods or services to set procedures for reviewing anti-competitive practices, exemptions and economic concentration rules, while authorising the sector regulator to establish competition rules. If the regulator has submitted a written request for the Ministry of Economy to assume all or part of the competition matter and that request has been accepted, the scope transferred must also be checked. An ordinary sector licence does not satisfy these conditions.

Government ownership or affiliation is also insufficient by itself. A federally owned enterprise must be designated by a Cabinet resolution following a proposal by the Minister and coordination with the relevant authority. An enterprise owned by an emirate government must operate within that emirate and be designated by a resolution of the local government. The applicability review should identify the relevant designation instead of inferring an exclusion from the shareholder’s identity. (Source: Federal Decree-Law No. 36 of 2023, Articles 3–4; verified October 2026.)

What should be reviewed before the policy goes live?

A contract review covers only one layer of a pricing policy. Before launching or changing the policy, we recommend arranging the following materials on the same timeline:

  • Distribution agreements, channel policies and supplemental arrangements;
  • Price communications in emails, instant messages, meeting notes, sales scripts and system notices;
  • Rebate formulas, promotional-support conditions, approval records and recalculations following discounting;
  • Price monitoring, price-correction notices, fines, reduced allocations, delayed supply or termination decisions, together with the objective reasons recorded at the time;
  • Relevant product and geographic markets, competitors, evidence supporting market-share figures, barriers to entry and substitute products; and
  • Alternative sales or supply options available to distributors, along with applicable sector legislation and the specific basis for any claimed exclusion.

Counsel should test whether the contract and actual execution are consistent and address the separate premises under Articles 5, 6 and 7. The operating team should apply any required changes to the formal policy, system configuration and sales communications at the same time. Updating the contract while retaining the old rebate logic or verbal instructions preserves the exposure the amendment was intended to address.

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Can the arrangement be implemented while an exemption application is pending?

Article 9 of Federal Decree-Law No. 36 of 2023 allows qualifying arrangements to apply for an exemption. The applicant must establish that the arrangement is necessary to promote economic development, improve enterprise performance and competitiveness, improve production or distribution systems, or provide specified consumer benefits. These are alternative benefit grounds and do not all have to be met together. The restrictions must not exceed what is necessary to achieve the objective or eliminate competition entirely in the relevant market or a substantial part of it. (Source: Federal Decree-Law No. 36 of 2023; verified October 2026.)

Article 4(2)(f) of Cabinet Resolution No. 59 of 2026 requires the applicant to give a written undertaking not to implement the agreement or practice covered by the application before a reasoned decision is issued. Filing an application is not temporary permission, and rejection does not provide a basis for implementation. If approval is granted, the arrangement must remain within the approved conditions, effective date and scope. (Source: Cabinet Resolution No. 59 of 2026; verified October 2026.)

Channel-margin protection should be reviewed from the point of execution. Confirm whether distributors can discount independently, trace what happens to rebates and supply when they do, and then assess the agreement, market position and available alternatives under each legal route. A recommended-price label, a low market share or government affiliation cannot replace that work.

Before a new pricing policy enters a contract, system or sales communication, Schedule a 30-minute complimentary assessment to identify the operating records and scope of professional review required.

Last updated: October 2026. This content is for informational purposes only and does not constitute legal or tax advice. UAE rules may change; refer to the latest official publications and effective Arabic legislation. UAE competition counsel should assess the applicable law and the facts of each case. For professional consultation, please contact the MIRISE team.