The United Arab Emirates (UAE) has emerged as one of the regional leaders in adopting and developing a robust information technology and internet infrastructure to accommodate the steep demand in e-commerce and digital payments, particularly following the start of the COVID-19 pandemic. 

As a result, the UAE has introduced a number of important legislations to protect consumers’ rights generally and specifically in relation to electronic transactions. These are: 

1. The UAE consumer protection legal framework includes Federal Law No. 15 of 2020 on Consumer Protection (CP Law) and Cabinet Decision No. 66 of 2023 issuing the highly anticipated Executive Regulations of the Consumer Protection Law (Executive Regulations). The Executive Regulations came into effect in October 2023. The CP Law and the Executive Regulations are referred to together as the Consumer Protection Legislation (Consumer Protection Legislation). 
2. The legislation governing consumer rights in e-commerce transactions include Federal Decree Law No. 14 of 2023 on Trading through Modern Technology (E-Commerce Law). The E-Commerce Law came into effect in September 2023.

This client alert provides a spotlight on key concepts set out by the Consumer Protection Legislation and the E-Commerce Law. 

OVERVIEW

Objective and Scope of Application 

The Consumer Protection Legislation aims at protecting the rights of every natural or corporate person who receives goods or services (i.e. the consumer) in the UAE (including within free zones). The goods and services that are captured by the Consumer Protection Legislation are defined broadly. Goods include “every natural, industrial, agricultural, animal, transformative, intellectual or technical product,” while services cover “anything provided to the Consumer.” 

The Consumer Protection Legislation also applies to goods and services sold electronically if the person (i.e. the seller or supplier) providing the services, or manufacturing, distributing, trading, selling, supplying, exporting, or importing the goods is a UAE registered corporate body (i.e. not a natural person).

The E-Commerce Law, on the other hand, aims at serving the UAE’s strategic direction to achieve digital transformation and technology advancement, developing an e-commerce legal framework, encouraging e-commerce and regulating the relationship between the digital merchant and consumer. It applies to, without limitation, any trading conducted via modern technological means and any person who engages in any commercial activity through modern technological means inside the UAE. The E-Commerce Law also applies to goods and services from outside the UAE, which are received by consumers in the UAE if the sale of such goods and services online meets the conditions set out in the E-Commerce Law. 

The E-Commerce Law expressly excludes, without limitation, government procurement, online platforms used for non-commercial purposes, and all transactions carried out by entities licensed by the UAE Central Bank who would be subject to the UAE Central Bank’s specific consumer protection rules. 

What are the Consumers’ Rights?

Consumers have a number of rights under the Consumer Protection Legislation and E-Commerce Law, including without limitation the right to:

• Be informed of their rights and obligations under the Consumer Protection Legislation;
• Obtain goods and services that meet the advertised specifications and in accordance with the published terms and conditions;
• Be able to purchase the goods and services electronically in a secure manner; 
• Have the option to agree to or refuse receiving marketing campaigns; 
• Be able to rate the seller and their goods or services and the services of the digital payment gateway; and 
• Return or exchange any goods or services that were purchased electronically in accordance with the provisions of the E-Commerce Law.

What are the Sellers’ Obligations?

Both the Consumer Protection Legislation and the E-Commerce Law set out comprehensive obligations that sellers, advertisers and commercial agents must abide by. These include, without limitation the obligation to:

• Advertise the goods or services accurately and in a manner that does not mislead consumers;
• Clearly state the prices of the good or service;
• Provide consumers with a dated invoice setting out the minimum information required by each of the Consumer Protection Legislation and the E-Commerce Law; 
• Provide a warranty in respect of the goods or services being sold in accordance with the Consumer Protection Legislation and the E-Commerce Law;
• Address and deal with any defects or malfunctions of the good or service; and 
• Provide after sale services depending on the nature of the good or service.

SPECIFIC REQUIREMENTS

Promotions 

A seller is not permitted to promote goods and services or discount the prices of its goods or services without first obtaining the proper license from the competent authority. Additionally, the Executive Regulations introduced a new provision requiring a seller to inform consumers of any discounts that will be offered for goods or services within one week from the date of purchase of the good or service. The consumer is entitled to a refund of the price difference if the seller violates this requirement.

Monopoly

A seller is prohibited from acting in manner that would be considered monopolistic under the CP Law. This includes, without limitation, refraining from selling a good or providing a service with the intention of controlling or monopolizing the price; forcing consumers to purchase certain quantities of a good or adding conditions to benefit from a service; requiring the purchase of another good or service; or charging a price that is higher than what was advertised. The Executive Regulations clarified some of the actions that would be considered monopolistic and further expanded the list of activities that would be considered monopolistic. 

Unfair Contractual Terms 

The Executive Regulations introduced a number of terms and conditions that would be considered null and void if included by a seller in any contract, invoice or any other document relating to a transaction with a consumer. Such unfair contractual terms include, without limitation, the right of the seller to interpret or amend certain clauses or unilaterally terminate a contract without reverting to the consumer or granting the consumer the right to compensation; cancelling or limiting a consumer from claiming compensation in case the seller breaches the contract; or waiving any right granted to a consumer under any of the applicable laws, including the Consumer Protection Legislation and the E-Commerce Law.

Data Privacy

Sellers are required to protect the privacy and security of a consumer’s data and to refrain from using such data for promotional or marketing purposes. The E-Commerce Law specifically dictates that data protection legislation in force in the UAE will apply to the use, classification and ownership of consumer information. Onshore UAE, and in free zones that do not have their own data protection laws, Federal Decree Law No. 45 of 2021 on Personal Data Protection applies to the processing of personal data of data subjects. In the Dubai International Financial Centre (DIFC), Data Protection Law No. 5 of 2020 applies to the processing of personal data of data subjects in the DIFC. The Data Protection Regulations 2021 apply to the processing of personal data of data subjects in the Abu Dhabi Global Market. Please see our client alert here for more information on the UAE federal data protection regime. 

Arabic

Information, advertisements, and contracts to be entered into with a consumer must be in Arabic or any other language in addition to Arabic. 

Non-Compliance

A range of civil and criminal penalties apply in case of non-compliance with the Consumer Protection Legislation or the E-Commerce Law, which depend on the nature of the violation. 

CLOSING REMARKS

The Consumer Protection Legislation and E-Commerce Law are a clear indication of the UAE Government’s proactive and pragmatic approach to updating its legislation to safeguard consumer rights in the ever-changing digital world.

We recommend companies to consult with their legal advisors to ensure that their commercial arrangements and standard terms and conditions for the sale of goods and services are in line with the Consumer Protection Legislation and the E-Commerce Law.