Legal Guidelines for E-commerce in the UAE

Author: Hassan Elhais
Introduction:

The UAE is rapidly growing into a digital economy, making e-commerce an essential component of its economic framework. To support this growth, the UAE has established comprehensive legal frameworks to regulate electronic transactions and ensure consumer protection. This article explores the key aspects of Federal Law No. 15/2020 on Consumer Protection and Federal Decree-Law No. 46/2021 on Electronic Transactions and Trust Services, highlighting their implications for e-commerce in the UAE.

Federal Law No. 15/2020 on Consumer Protection:

Federal Law No. 15/2020 aims to safeguard consumer rights in the UAE, ensuring fair trade practices and protecting consumers from fraud and exploitation in the marketplace. It applies to all commercial transactions conducted within the UAE, including those carried out via e-commerce platforms. Consumers are guaranteed several rights under this law, including the right to information, which mandates that consumers must be provided with clear and accurate information about products and services, including prices, terms of sale, and warranty details, as stipulated in Article 4. Additionally, the right to safety ensures that products and services must meet safety standards, and consumers should be protected from hazardous goods, according to Article 5. The right to choose ensures consumers have access to a variety of products and services, allowing them to make informed choices, as outlined in Article 6. The right to privacy stipulates that personal data collected from consumers must be protected and not used for unauthorized purposes, as per Article 7.

E-commerce businesses have specific obligations under this law. They must maintain transparency by displaying comprehensive product information and pricing clearly on their websites, as stated in Article 8. They are also required to establish and communicate clear policies regarding refunds, returns, and cancellations, as mandated by Article 9. Advertising standards must be upheld, ensuring that all advertisements are truthful and not misleading, as indicated in Article 10. For dispute resolution, the law mandates an efficient process for handling consumer complaints, ensuring swift and fair resolution of disputes, as specified in Article 11. The UAE Consumer Protection Department is tasked with monitoring compliance and addressing violations, according to Article 12.

Federal Decree-Law No. 46/2021 on Electronic Transactions and Trust Services:

Federal Decree-Law No. 46/2021 regulates electronic transactions, providing a legal framework that supports the secure and efficient use of electronic signatures, records, and other trust services. This law is pivotal for e-commerce as it facilitates secure online transactions. It grants legal recognition to electronic signatures and records, ensuring they have the same legal validity as their physical counterparts, thereby promoting confidence in digital transactions, as outlined in Article 3. Only approved trust service providers can offer electronic signature services, ensuring a high level of security and reliability, as stated in Article 4.

The law mandates the use of digital identities issued by approved providers for accessing government e-services and conducting secure transactions, as per Article 28. Trust service providers may issue authentication certificates verifying the identity and authorization of individuals engaging in electronic transactions, as stipulated in Article 34. Businesses are required to implement strong security measures to protect electronic records and signatures from unauthorized access and tampering, according to Article 35. Providers of electronic trust services are held liable for any damages resulting from their failure to meet security and reliability standards, as specified in Article 38.

Penalties may be imposed for violations under this law. Forgery or fraudulent use of electronic documents and signatures may result in imprisonment and fines. Article 39 stipulates that offenders may face imprisonment and fines ranging from AED 100,000 to AED 300,000, depending on the severity of the offence. Operating electronic trust services without proper authorization is also punishable under Article 45, with penalties including temporary imprisonment and fines ranging from AED 150,000 to AED 750,000.

Conclusion:

The UAE’s legal framework for e-commerce, as summarised in Federal Law No. 15/2020 on Consumer Protection and Federal Decree-Law No. 46/2021 on Electronic Transactions and Trust Services, provides a comprehensive and secure environment for digital trade. These laws collectively ensure that e-commerce platforms operate transparently, protect consumer rights, and maintain the security and integrity of electronic transactions. Businesses engaged in e-commerce must comply with both sets of regulations to promote trust and confidence among consumers, thereby contributing to the sustainable growth of the digital economy in the UAE.