Hot off the heels of recent updates to Federal Law No. 15/2020 On Consumer Protection (“Consumer Protection Law”) and its newly issued implementing regulation (Cabinet Decision No. 66/2023 Concerning the Executive Regulation of the Federal Law No. 15/2020 Concerning the Consumer Protection) (“Consumer Protection IRs”) (together the “CPLs”), the UAE has issued Federal Decree-Law No. 14/2023 On Trading by Modern Technological Means (“TMTM Law”). Whilst the CPLs set out certain limited requirements applicable to “suppliers working in the field of e-commerce”, these are limited primarily to informational requirements (both with regards to the information which must be included on the e-commerce platform itself and on the products sold on the platform). Critically, for e-commerce platform operators who permit third party sellers to trade on their platforms, those operators will be responsible for the failure of any third parties to comply with the CPLs.
The TMTM Law represents the first step towards a more substantive set of requirements specifically applicable to those who engage in the broadly defined “Trading by Modern Technological Means” (i.e. e-commerce). The definition captures trading on websites, platforms, mobile applications, social media, virtual reality connected platforms and blockchain based platforms.
The TMTM Law provides a basic (and in some cases, broad) framework covering a broad range of issues, with further detail to be provided by the associated Implementing Regulations (not yet published).
Of particular note, it appears that the TMTM Law is intended to have a degree of extra territorial effect (Article 2(b) provides that the TMTM Law applies to “[a]ny person who engages in any commercial activity through modern technological means inside the State or those received from outside it, including modern technological means, logistics services, and digital payment gateways to the extent related to trading through modern technological means”).
Other key observations are set out below. The TMTM Law:
- includes a set of basic standards and criteria which must be met when Trading by Modern Technological Means. These include, by way of example, a requirement to issue a non-paper invoice, as well as a requirement to technically secure the trading environment and to meet “the requirements and standards of e-security, cyber safety, and combating cyberattack”;
- includes a set of basic rights afforded to consumers including, by way of example, providing consumers the ability to:
- rate their experience via functionality within the relevant platform;
- submit complaints and feedback by way of phone with which is permanently available and staffed by qualified staff; and
- choose whether to receive advertising and marketing campaigns or not via phone calls, emails, or social media platforms;
- provides for enhanced return and exchange rights;
- imposes broad obligations with respect to information collection and processing (with more detailed requirements being set out under Federal Decree-Law No. 45/2021On the Protection of Personal Data)
- includes obligations to ensure that logistics operations are fully licensed and conducted in accordance with applicable regulatory requirements;
- includes a restrictions with respect to imposing additional fees on consumers for the use of digital payment methods; and
- prevents providers from binding counterparties to dispute resolution by way of arbitration for any disputes which relate to a transaction of less than USD 50,000.
The list above is not exhaustive and it will be critical both for brands who operate e-commerce sites, as well as those operating third party seller e-commerce platforms, to conduct a detailed analysis of the new requirements and to adjust their operations accordingly. Whilst there are no penalties expressly set out under the TMTM Law, Article 19 suggests that a list of violations and their accompanying penalties will be following by way of a Cabinet Decision in due course.
If you are a business who may be subject to the TMTM Law and require any support in assessing how the TMTM might impact your operations, please reach out to Jamie Ryder and Alex Mackay.