UAE Restaurant Delivery Agreements: How Far Can Platform Exclusivity Go?
The rapid expansion of online food delivery services in the United Arab Emirates has transformed the relationship between restaurants and digital delivery platforms. While these platforms provide restaurants with access to a wider customer base, promotional opportunities and delivery infrastructure, contractual arrangements involving exclusivity have raised concerns regarding fair competition and commercial independence.
To address these concerns, the UAE introduced Ministerial Decision No. 32 of 2026 concerning the Block Exemption of Exclusive Dealing Agreements in the Market for Food Promotion and Delivery Services through Digital Platforms. The Decision establishes a conditional exemption permitting certain exclusive arrangements between restaurants and delivery platforms, subject to restrictions intended to protect competition and prevent unfair commercial practices.
This regulatory development is particularly significant for restaurants and delivery platforms entering into new agreements or reviewing existing contractual obligations.
Understanding the Conditional Competition Exemption
Federal Decree-Law No. 36 of 2023 Regulating Competition establishes the principal legal framework governing anti-competitive agreements and practices in the UAE.
Under Article 11 of the Competition Law, certain categories of agreements may be exempted from specified competition restrictions through a Ministerial Decision.
Pursuant to this provision, Ministerial Decision No. 32 of 2026 grants a conditional exemption to exclusive dealing arrangements between restaurants and digital platforms from Articles 5, 6 and 7 of the Competition Law.
However, this exemption does not provide unrestricted authority for delivery platforms to impose exclusivity obligations. Instead, it establishes specific conditions that must be satisfied for an arrangement to qualify.
The Decision also establishes a limited exemption period, requiring businesses to assess the duration and commercial implications of their agreements.
Exclusivity Must Be Voluntary and Free From Coercion
One of the principal requirements under Article 3 of the Decision is that exclusive arrangements must be entered into voluntarily by both parties.
Restaurants must not be subjected to coercion, retaliatory measures or penalties for choosing to engage with other delivery platforms.
This requirement is particularly relevant where restaurants depend substantially on a particular platform for customer orders and revenue generation.
For instance, a restaurant may be offered preferential commission rates or additional promotional support in exchange for exclusivity. Although such incentives may be permissible, the arrangement must comply with the conditions prescribed under the Decision.
Any attempt to compel exclusivity through financial penalties, withdrawal of services or retaliatory measures may raise concerns regarding compliance with the applicable competition framework.
Accordingly, delivery platforms should ensure that exclusivity provisions reflect genuine commercial negotiations rather than restrictions imposed through unequal bargaining power.
Restrictions on Duration and Number of Exclusive Restaurants
The Decision imposes two important limitations on permitted exclusivity.
First, Article 3(B) provides that the duration of exclusive dealing obligations must not exceed twelve months from the date the Decision entered into force.
Second, Article 3(C) provides that the number of restaurants contracted exclusively with a platform must not exceed 10% of the total number of merchants listed on that platform.
These restrictions are intended to prevent platforms from using widespread exclusive arrangements to limit competitors’ access to restaurants.
For example, where a delivery platform has 5,000 listed merchants, the prescribed 10% ceiling would permit no more than 500 restaurants to be contracted exclusively.
Platforms must therefore monitor their exclusive arrangements against their overall merchant base. Restaurants should similarly review the duration of their obligations to ensure compliance with the permitted period.
Ratification means formal approval. It does not mean every private agreement automatically qualifies. A lawyer should assess eligibility and the required formalities. Where that route is unavailable, the appropriate claim or procedure needs separate consideration.
Protecting Access to Emerging Delivery Platforms
Another significant feature of the Decision is the protection afforded to emerging digital platforms and qualifying small and medium-sized enterprises.
Under Article 3(D), an exclusive agreement must not prevent a restaurant from partnering with emerging digital platforms or other delivery platforms classified as small and medium-sized enterprises under Cabinet Decision No. 22 of 2016.
This restriction is particularly relevant to newer delivery businesses seeking to establish themselves in a market where established platforms already maintain extensive restaurant networks.
For example, a restaurant operating under an exclusive agreement with an established platform may still collaborate with a qualifying emerging platform, notwithstanding its existing exclusivity obligations.
Consequently, exclusivity provisions should incorporate appropriate exceptions to preserve restaurants’ access to the categories of competing platforms protected under the Decision.
That gives two tracks. A non-profit civil company may suit an educational or professional venture with no trading activity. A non-profit commercial company may suit a social enterprise that trades. Both are distinct from public benefit associations and foundations, which keep their own regimes.
The gap is implementation. The commercial track depends on a Cabinet decision setting permitted purposes, forms and exemptions, and practitioner commentary through 2026 has treated that decision as outstanding. Until it arrives, licensing authorities have little guidance on separating a non-profit company from a foundation, and tax treatment is unclear. Non-profit status should not be assumed to bring corporate tax exemption. Advisers should confirm the current position with the relevant authority before recommending this vehicle over a tested alternative.
Commission Discounts Must Be Supported by Commercial Justification
Exclusive delivery arrangements frequently involve reduced commission rates, marketing incentives or other financial benefits offered to restaurants.
However, Article 3(E) introduces an evidentiary requirement where a platform grants reduced commissions during an exclusivity period.
The platform must, upon request by the Ministry of Economy and Tourism or the relevant authority, demonstrate either substantial reductions in operational costs directly resulting from exclusivity or tangible additional value generated through the arrangement.
Importantly, the supporting evidence must be verifiable and auditable.
For instance, where a platform provides preferential commission rates in exchange for exclusivity, it should maintain financial records demonstrating the operational savings or measurable commercial benefits arising from the arrangement.
General assertions regarding improved efficiency may not be sufficient without supporting evidence.
Accordingly, platforms should maintain appropriate financial calculations, operational records and documentation substantiating the commercial benefits associated with exclusive arrangements.
Penalties, Renewal Clauses and Post-Exclusivity Restrictions
The Decision also addresses contractual restrictions that may continue to affect restaurants after the exclusivity period expires.
Article 3(F) expressly prohibits clauses preventing restaurants from joining competing digital platforms following the expiry of the permitted exclusivity period.
Accordingly, provisions imposing post-exclusivity restrictions should be reviewed to ensure they do not interfere with a restaurant’s freedom to engage with competing platforms.
Automatic renewal clauses also require particular attention.
An agreement containing an automatic extension of exclusivity should not be assumed to remain protected merely because the original arrangement qualified for the exemption.
Article 5 provides that the exemption remains valid for twelve months from the Decision’s entry into force and cannot be renewed unless a further Ministerial Decision is issued.
As the Decision entered into force on 11 February 2026, businesses should review their contractual arrangements before the exemption expires in February 2027.
Failure to comply with the prescribed conditions may result in regulatory measures, including administrative penalties or referral to the competent court, as contemplated under Article 4.
Penalties, Renewal Clauses and Post-Exclusivity Restrictions
Ministerial Decision No. 32 of 2026 requires restaurants and digital delivery platforms to adopt a more structured approach when negotiating exclusive agreements.
Restaurants should assess whether exclusivity obligations are voluntary, whether restrictions on emerging platforms are permissible and whether termination or renewal provisions create obligations beyond the permitted period.
Delivery platforms should review their merchant agreements, monitor the prescribed 10% exclusivity threshold and maintain verifiable records supporting commission discounts and commercial incentives.
Businesses operating in Dubai should also consider the Guidelines for Online Food Delivery Platforms issued by the Dubai Corporation for Consumer Protection and Fair Trade, which address transparency, fair dealing and exclusivity arrangements.
Ultimately, the UAE’s regulatory approach does not prohibit exclusivity altogether. Instead, it recognises that exclusive arrangements may provide legitimate commercial benefits, provided they remain proportionate, transparent and consistent with applicable competition requirements.
For restaurants and delivery platforms, the central consideration is no longer simply whether exclusivity is commercially advantageous, but whether the arrangement complies with the regulatory framework throughout its contractual duration.
For legal guidance on restaurant delivery agreements, platform exclusivity and compliance with UAE competition law, consult Dr Sunil Ambalavelil, who advises businesses on commercial agreements, regulatory obligations and dispute prevention.
