The United Arab Emirates has always made keen efforts to protect the rights of consumers to enhance consumer confidence in institutions and the UAE market, which will help strengthen the relationship between the consumers and the businesses running in the country. The promulgation of consumer protection laws aims to make commercial transactions transparent, and the integral party to the transaction, the consumer, are protected from any loss. While making any commercial transaction, consumers’ fundamental rights are protected against products, production processes, and harmful services to consumers’ health and safety. The right to be informed about the facts concerning the product he/she intends to purchase will help the consumer decide on the product. The freedom of choice shall be available to the consumer to ensure the quality of the product for the satisfaction of the consumer.
To protect consumers’ rights, the UAE government previously enacted Federal Law Number 24 of 2006 (Old Law); through the promulgation of the Old Law, consumers were given protection against the commercial transaction they make in their everyday life. Moreover, broadly defined rights and restrictions favour consumers’ rights, responsibilities, and liabilities and specify penalties imposed on people for selling substandard goods to safeguard consumers’ rights. Recently the UAE implemented new consumer protection law known as Federal Law Number 15 of 2020 in November 2020 (the New Consumer Protection Law) by superseding the previous of 2006.
The Consumer Protection Law regulates sales of all goods and services within the UAE (mainland and in free zones) and governs any incidental operations to consumer selling as carried out by suppliers, trade agents, or advertisers. Due to the global pandemic, the year 2020 reflected a remarkable shift from conventional trading to an accelerated digital transformation globally and in the UAE market specifically. E-commerce is rapidly flourishing in the current years, and to protect the rights of consumers using e-commerce for their daily purchasing needs, legislation to safeguard their rights and introduce robust penalties for law breaches.
The new Consumers Protection Law, like the former consumers’ law, governs all goods and services within the UAE, including mainland and economic free zones, and all connected operations carried out by advertisers, suppliers, or trade agents, including electronic commerce transactions if the supplier is so registered in the UAE. The new law has also imposed restrictions on the use of consumers’ data for marketing and other purposes.
However, the old law provided a detailed definition of the supplier, but the concept of e-commerce was not explicitly provided in that law. Whereas the Consumers Protection Law 2020 has expanded its application and included e-commerce service providers registered in the UAE, it will not extend protection outside of UAE. The Consumer Protection Law intends to protect consumers from the risks that have arisen due to the growing e-commerce markets in the UAE and the increased reliance on such e-commerce platforms resulting from the global pandemic.
It is mandatory for the e-commerce service providers that are licensed or registered in the UAE required to provide their names, legal status, addresses, licensing, details of the licensing authority, and adequate information in Arabic on the products or services that they provide (along with the specifications, terms of contracting and payment) to the consumers and authorities in the UAE under Article 25 of the Consumer Protection Law.
The service provider must supply invoices in the Arabic language and any other language in addition to Arabic to the consumers. Moreover, the data, advertisement, and contracts relating to the sale or delivery of services to a customer must be in Arabic, and in any other language that may also be used alongside Arabic as per Article 8 of the Consumer Protection Law. It has provided stringent penalties for the person who breaches the provision of the Consumer Protection Law, which is a minimum fine of AED 2,000 and which can increase to AED 200,000 and/or the punishment of imprisonment for a term of not less than six months. If the said provisions are breached again, then the penalties, as mentioned earlier, can be doubled by the Ministry of Economy.
For the first time, the UAE has incorporated provisions regarding protecting the privacy and data of consumers and its unauthorized use by the service suppliers in the Consumer Protection Law through Article 4(5). Under this provision, businesses and suppliers are duty-bound to safeguard consumers’ data and personal information and avoid using consumers’ data in marketing and other promotions. The new Consumer Protection law protects religious values, traditions, and customs when providing a product or receiving any service per Article 4(6) of the new law.
It is mandatory to get an appropriate license from the competent authority before promoting goods or services or applying general discounts to prices under Article 18 of the Consumer Protection Law.
The Consumer Protection Law imposes on providers/suppliers of goods and services an obligation to repair, replace, or refund the consumer for any flaws in the goods or services that reappear no less than three times during the first year of the consumer receiving it.
The penalties for breaches of the law have been significantly increased in the new Consumer Protection Law. Suppliers who misleadingly advertise products or services can be subject to a fine of a minimum of AED 10,000 and up to AED 2 million and/or punishment of imprisonment of up to two years under Article 29. The same penalties can apply to any supplier who does not repair or replace a defective good or re-provide a service without charge if there is a defect in the product or the service provided.
The court can order after conviction to confiscate or destroy the goods (and the materials and tools used to produce the product), closure of the shop or place where the crime took place for no longer than three months, and publication of the conviction in two daily local newspapers
The new consumer Protection Law provides a one-year grace period for entities to ensure compliance with law provisions. The Law applies to all service providers, manufacturers, commercial agents, a person advertising goods or services, and e-commerce providers registered in the UAE.
The recent changes are a positive step towards ensuring consumer rights are being protected in the UAE. The institutions and suppliers need to audit their consumers’ contracts to align with the new Consumer Protection Law. Stringent penalties will further enhance consumers’ protection and ensure the suppliers’ compliance with the law.
The Ministry of Economy’s Consumer Protection Department deals with the grievances of consumers, who face challenges regarding purchasing defective products or services. This department supervises the prices of goods and services and controls commercial practices. Consumers can seek legal aid from an experienced lawyer to file complaints against the suppliers or service providers regarding their faults and mishandling their requests for refund or compensation or repairing or replacing the defective goods or services provided. The Consumers Protection Department takes up the case of aggrieved consumers and helps them in getting justice. It encourages fair competition and combats monopoly. The department receives complaints and resolves consumer complaints or refers them to competent authorities. It publishes the discussions and recommendations that contribute to increasing consumer awareness.
The ministry provides a hotline (600-522-225) to receive complaints related to infringements of the rights of the consumers. Department of Economic Development (DED) in each emirate deals with consumer rights issues and implement plans and procedures regarding consumer protection laws. It receives consumer complaints and raises consumer awareness about their rights and duties.
