Digital Transactions: Consumer Rights, E-Security, and Data Privacy Under Modern Technology Regulati

Introduction:

The rise of digital transactions has transformed interactions between consumers and businesses. As technology rapidly advances, regulatory frameworks must adapt to address emerging challenges. Federal Decree-Law No. 14/2023 on Trading by Modern Technological Means is a significant legislative framework in the UAE for digital transactions. This article explores key provisions of the Decree-Law related to consumer rights, e-security, and data privacy, highlighting their implications for both consumers and businesses.

Consumer Rights in Digital Transactions

Federal Decree-Law No. 14/2023 establishes robust protections for consumers engaged in digital transactions. Article 5 authorizes that businesses must obtain necessary approvals, permits, and licenses from the Competent Authority. This includes the obligation to ensure a technically secure trading environment and to sell only legally permissible goods and services. Businesses must also ensure transparent communication regarding the terms and conditions of digital transactions. This includes clear disclosure of pricing, product details, and terms of service, ensuring consumers have all necessary information before making a purchase.

Article 6 enforces the consumer’s right to accurate and truthful information, requiring businesses to provide reliable data about their products and services. Consumers are entitled to receive goods and services that match the advertised specifications and terms. They should have access to secure purchasing methods, clear options for opting out of marketing communications, and transparent mechanisms for rating and reviewing their experiences. Additionally, consumers have the right to file complaints and access reliable contact information for resolution. Digital merchants must also publicly disclose their licenses, contact details, and physical addresses.

According to Article 7, consumers can return items if they are defective, damaged, not as described, or if delivery is delayed beyond usability. Returns are also permitted if the goods or services violate the terms of the digital contract. However, the right to return is forfeited if the consumer has used the goods, missed the statutory return period of three weeks, or if the items are perishable or non-returnable as specified by the Minister.

Additionally, Article 8 defines consumer obligations when purchasing through digital means. Consumers must engage with recognized technological platforms, avoid abusing return rights, and thoroughly review product specifications and contract terms. Prompt payment for purchased goods and services is also required.

E-Security Measures for Businesses

E-security is an essential factor of the Decree Law, emphasizing the need for businesses to implement robust measures to protect digital transactions from fraud and cyber threats. Article 10 highlights the requirement for businesses to adopt appropriate security measures to safeguard financial and personal information. This includes encryption protocols, secure payment gateways, and regular security audits to ensure that sensitive data remains protected.

Article 11 defines the obligations of businesses to report any data breaches or security incidents to the relevant authorities promptly.

Data Privacy Protections

Data privacy is a central concern in digital transactions, and Federal Decree-Law No. 14/2023 addresses this through rigorous data protection requirements. Article 12 authorizes businesses to collect and process personal data only for legitimate purposes and with the explicit consent of the individuals concerned. Article 13 further strengthens data protection by requiring businesses to implement measures for data anonymization and secure storage.

Dispute Resolution Mechanisms

Article 9 of the Decree-Law outlines the mechanisms for resolving disputes arising from the application of its provisions. The Ministry or the Competent Authority within the Emirate may establish a Dispute Resolution Committee to address disputes related to the Decree Law. This Committee will have clearly defined competencies and an operational framework, as determined by the decision on its formation. The Ministry is also empowered to form such a committee, in coordination with the Competent Authority, to further the Decree-Law’s objectives and safeguard consumer interests.

Article 9 also permits arbitration as a means of dispute resolution. Disputes covered by existing arbitration agreements can still be referred to arbitration, provided they do not conflict with the Decree-Law’s provisions. However, for digital contracts valued below AED 50,000, the inclusion of an arbitration clause is not permissible. If arbitration is pursued after a Dispute Resolution Committee’s decision, such arbitration will render the Committee’s decision null and void. This ensures that once a Committee’s resolution is issued, it stands as the final resolution unless arbitration was previously agreed upon.

Conclusion:

Federal Decree-Law No. 14/2023 provides a comprehensive regulatory framework for digital transactions in the UAE, focusing on consumer rights, e-security, and data privacy. By mandating transparency, implementing strict e-security measures, and safeguarding personal data, the Decree Law aims to create a secure and reliable digital marketplace. Understanding and complying with these provisions is crucial for both consumers and businesses to navigate the complexities of modern technology transactions effectively.

Dr. Hassan Elhais is a legal consultant in Dubai, specializing in the drafting of all statements of claim, memos and consultation on litigation of all manner.