In Brief:
The UAE has implemented a comprehensive framework to enhance consumer rights. Key legislation introduced in recent years includes:
- Data Protection Legislation: Federal Decree-Law No. 45 of 2021 on the Protection of Personal Data.
- Consumer Protection Legislation: Federal Law No. (15) of 2020 on Consumer Protection and Cabinet Resolution No. 66 of 2023 concerning the Executive Regulations of Federal Law No. (15) of 2020.
- Digital Commerce Legislation: Federal Decree-Law No. 14/2023 on Trading by Modern Technological Means (“Digital Commerce Law”).
In this article, we focus on the Digital Commerce Law and, specifically, on the obligations imposed by the Digital Commerce Law that may impact the design and architecture of digital platforms. Please see the conclusion of this article for links to further articles discussing the other UAE legislation mentioned above.
Understanding “Trading by Modern Technological Means”
The Digital Commerce Law imposes a number of obligations on digital merchants who are “Trading by Modern Technological Means”.
“Modern Technological Means” is broadly defined to encompass all types of digital commerce. This definition includes trading through electronic, digital, and biometric methods, as well as artificial intelligence, blockchain, and any other forms of “technical media.” As a consequence, it covers e-commerce (traditionally defined as the buying and selling of goods or services over an electronic network), digital trading, and any other technology-driven trading methods. Both physical and intangible goods and services are included, ensuring that transactions in virtual spaces, such as the metaverse, also come under the jurisdiction of the Digital Commerce Law.
Merchants subject to the Digital Commerce Law who utilise digital platforms such as websites, mobile apps, social media, online marketplaces, blockchain platforms, or messaging apps facilitating commerce must ensure that both they and their platforms comply with the requirements of the Digital Commerce Law.
Who Must Comply with the Digital Commerce Law
The Digital Commerce Law applies to any natural person or corporate entity conducting “Trading by Modern Technological Means”. Unlike the UAE Consumer Protection regime, its application is not limited to merchants registered in the UAE. The law applies both to commercial activity using Modern Technological Means inside the UAE and commercial activity that is “received in the state”.
Notably, the “commercial activity” needs only to be received inside the UAE. This indicates that transactions for products and services delivered by digital merchants based outside the UAE will be subject to the Digital Commerce Law. For example, a travel website selling tours to UAE residents for holiday packages outside the UAE may be subject to the Digital Commerce Law, even if the digital merchant has no physical presence in the UAE and the ultimate services (the holiday) are received by the consumer outside of the UAE.
Platform Requirements
The Digital Commerce Law imposes a number of requirements that may impact platform UI/UX design, and digital merchants must ensure that their platforms comply with the Digital Commerce Law.
Items which must be present on the “website, application, or other Modern Technological Means”:
- The terms, conditions, and details of the various stages of the sale of the goods and services.
- The price of the goods or services.
- The delivery fees associated with any delivery of the purchased goods or services.
- The fees associated with any payment processing.
- The digital contract, or where there is no digital contract, the purchase terms and conditions relating to the purchase.
Items which must be made “publicly available”:
- Details of any associated website.
- Physical and digital address.
- Contact numbers.
- Digital merchant trade license.
Items which must be provided to the customer:
- A method of submitting and tracking complaints.
- Feedback functionality to allow customers to rate their experience of the sales transaction, the payment service and any associated logistic services.
- A method of selecting communication preferences.
Dispute Resolution and Complaints
The Digital Commerce Law establishes a process for consumers with complaints (related to the Digital Commerce Law) to follow, and provides the Ministry of Economy with the right to prepare a list of violations and administrative penalties (which has not yet been published). To seek to mitigate the risk of complaints (and, indeed, penalties), it is imperative for digitial merchants to be aware of their obligations to consumers in the UAE.
In addition, digital merchants should be mindful of the convenience offered to consumers under the soon to be introduced consumer complaints process of the Dubai Corporation for Consumer Protection and Fair Trade (the DCCPFT, which is part of the Dubai Department of Economy and Tourism (DET)). This new process enables consumers to file formal complaints against businesses quickly and easily, simply by messaging on WhatsApp. We expect that complaints capable of being launched by consumers in this way will include complaints under the Digital Commerce Law, such as complaints relating to websites that do not include terms and conditions or a clear indication of price for goods or services. A Dubai resident could simply upload documents related to their grievance via WhatsApp, and would quickly receive a ‘resolution letter’ from the DCCPFT, which they would then be able to present to the relevant business for execution and the swift resolution of their complaint. If a digital merchant refused to accept the resolution prescribed by the DCCPFT, they would face potential penalties.
Digital merchants would be well advised to become familiar, therefore, not only with the Digital Commerce Law dispute resolution process and potential penalties (once published), but also with the mechanisms that are being established in the UAE to aid consumers in exercising their rights.
The Digital Commerce Law contains a wide range of obligations, and this article focuses only on those that may impact platform design. In addition to the wider obligations imposed by the Digital Commerce Law, digital and non-digital merchants should also be aware of the UAE Consumer Protection Law, in relation to general trading and also, for digital merchants, in the context of platform design. You can read our article on this here.
See also our article here on compliance with the UAE Data Protection Legislation.
For more information, please contact a member of the Hadef Commercial Team (Victoria Woods, Partner - v.woods@hadefpartners.com, Diana Froyland, Senior Counsel - d.froyland@hadefpartners.com, or Julie Beeton, Senior Counsel - j.beeton@hadefpartners.com).