Introduction:
In today’s increasingly digital world, where transactions are conducted with the click of a button, ensuring the rights and safety of consumers is paramount. Recognizing the importance of consumer protection in both traditional and digital transactions, the United Arab Emirates (UAE) has taken significant steps to enact comprehensive legislation aimed at safeguarding consumer interests. Central to this legal framework are Federal Law No. 15 of 2020 on Consumer Protection (CP Law) and Cabinet Decision No. 66 of 2023, issuing the long-awaited Executive Regulations of the Consumer Protection Law (Executive Regulations).
Additionally, the UAE has introduced Federal Decree Law No. 14 of 2023 on Trading through Modern Technology (E-Commerce Law) to regulate e-commerce transactions. Together, these legislative milestones form the backbone of consumer protection in the UAE, ensuring fairness, transparency, and accountability in commercial dealings. This article aims to shed light on key concepts outlined in these laws, highlighting the rights of consumers and the obligations of sellers.
Objective and Scope:
The Consumer Protection Legislation aims to safeguard the rights of consumers, encompassing both individuals and corporate entities, within the UAE, including free zones. It covers a broad spectrum of goods and services, ranging from tangible products to intangible services. Moreover, it extends its jurisdiction to electronic transactions if the seller or supplier is a UAE-registered corporate entity. Conversely, the E-Commerce Law focuses on fostering digital transformation and regulating online commerce. It applies to any commercial activity conducted through modern technological means within the UAE, ensuring a secure and transparent digital marketplace. While promoting e-commerce, the law excludes certain activities, such as government procurement and non-commercial online platforms.
Consumer Rights:
Under these laws, consumers enjoy a myriad of rights aimed at ensuring fair treatment and quality service. These include the right to be informed about their rights and obligations, receive goods and services as advertised, purchase securely online, opt-out of marketing campaigns, rate sellers and services, and return or exchange electronic purchases as per specified conditions.
Seller Obligations:
Sellers, advertisers, and commercial agents are bound by stringent obligations to uphold consumer rights. These obligations include accurate advertising, transparent pricing, providing dated invoices, offering warranties, addressing product defects promptly, and safeguarding consumer data privacy. Non- compliance with these obligations may result in civil or criminal penalties, depending on the severity of the violation.
Specific Requirements: The Executive Regulations introduce specific provisions to reinforce consumer protection. Notably, sellers must obtain proper licensing for promotions and inform consumers of discounts within a specified time frame.
Advertising & Promotions
The Executive Regulations reinforce the responsibilities of suppliers when advertising goods or services.
Suppliers must ensure:
Clear Pricing: Prices must be prominently displayed on goods or labels, ensuring transparency for consumers.
Non-Misleading Advertisements: Ads should not mislead consumers, directly or indirectly, by creating false impressions.
Language Requirements: Invoices, warranty information, and other essential labeling details must be provided in Arabic, with the option for additional languages.
Notification of Promotions: Suppliers are obligated to inform consumers of any promotional discounts within one week of purchase. Failure to do so entitles consumers to claim the price difference. This provision prioritizes consumer rights and may necessitate revisions to sales practices.
Invoices
Following a sale, suppliers are required to furnish consumers with a dated invoice containing specific details, including the supplier’s commercial registration and tax number, along with a comprehensive description of the goods or services, quantity, condition, and warranty period.
Warranties & Spare Parts
According to the Executive Regulations, suppliers must inform consumers about warranty coverage, including any obligations and exclusions. Additionally, suppliers must provide mechanisms for spare parts and maintenance documentation, alongside warranties, which should be accessible on their website. Fixed time frames are set for supplying spare parts, emphasizing the importance of efficient handling of consumer requests.
Defects
In the event of discovering defects or hazards in goods, suppliers have obligations outlined in the Consumer Protection Law. These include notifying consumers of the defect, halting trading of the goods or services, recalling defective products from the market, and either replacing or repairing the goods at their own expense. While the Executive Regulations establish procedures for handling defective goods in line with international standards, implementation and enforcement remain areas to be observed. Compliance with processes such as product recalls is critical to avoid financial and reputational damage.
Monopolistic Practices
The Executive Regulations also address monopolistic practices by imposing administrative sanctions on violators. These sanctions, which may be imposed by the Ministry, include administrative fines of up to AED 1 million, suspension of activity for up to 90 days, or revocation of licenses and removal from the commercial registry.
Data Privacy
Sellers are mandated to safeguard the confidentiality and integrity of consumer data, refraining from its use for promotional or marketing purposes. The E- Commerce Law explicitly stipulates that prevailing data protection legislation in the UAE governs the utilization, categorization, and ownership of consumer information. Within mainland UAE and free zones lacking specific data protection laws, Federal Decree Law No. 45 of 2021 on Personal Data Protection governs the processing of personal data. In the Dubai International Financial Centre (DIFC), Data Protection Law No. 5 of 2020 applies to the processing of personal data, while the Data Protection Regulations 2021 apply in the Abu Dhabi Global Market. For more details on the UAE federal data protection regime, please refer to our client alert.
Language Requirement
Information, advertisements, and contracts intended for consumers must be available in Arabic or any additional language alongside Arabic.
Non-Compliance
Various civil and criminal penalties are applicable for non-compliance with the Consumer Protection Legislation or the E-Commerce Law, varying based on the nature of the violation.
Unfair Contractual Terms
The Executive Regulations introduced provisions rendering certain terms and conditions null and void if included by a seller in any contract, invoice, or related document pertaining to a transaction with a consumer. Such unfair terms include the seller’s unilateral interpretation or amendment of clauses, termination of contracts without recourse to the consumer, limitations on consumer compensation in case of breach, or waiver of consumer rights granted by applicable laws, including the Consumer Protection Legislation and the E-Commerce Law.
Dubai Corporation for Consumer Protection and Fair Trade In a significant development, Dubai Law No. 5 of 2023 established the Dubai Corporation for Consumer Protection and Fair Trade. The Corporation is tasked with upholding Fair Trade and Competition principles, combating monopolistic practices, and regulating the market in Dubai, including free zones. To fulfill its mandate, the Corporation can request data from commercial establishments, form investigative committees, and combat commercial fraud.
Conclusion:
The UAE’s commitment to consumer protection reflects its proactive stance in adapting to the evolving digital landscape. Businesses are urged to align their commercial practices with these laws to ensure compliance and consumer trust. As consumer rights continue to evolve in the digital age, legal advisors play a crucial role in navigating these complex regulatory frameworks. In conclusion, the UAE’s consumer protection laws underscore the government’s dedication to fostering a fair, competitive, and consumer-friendly marketplace. By empowering consumers and holding sellers accountable, these laws promote economic growth and digital innovation while safeguarding consumer interests. As the UAE continues to embrace digital transformation, consumer protection remains a cornerstone of its legal framework, ensuring that consumers can shop with confidence and trust in the integrity of the marketplace.