What are the features of the new law?
In general, Federal Law No. 15 of 2020 on Consumer Protection (New Law) is similar to the 2006 law with regard to protecting consumers’ rights in that it aims, among other rights, to create a safe and convenient environment for consumers to purchase products and services; to protect consumers’ religious values, customs and traditions; and to ensure that consumers get accurate information about what they are purchasing and are aware of their related rights and remedies. It also provides for quick settlement of disputes, compensation for damages and, generally, guidance for suppliers on how to treat consumers in a fair and legal manner.
Key changes in the New Law include:
- The New Law applies not only to suppliers, vendors and advertisers in the UAE (as was previously the case), but also to e-commerce providers. This change is especially significant following the recent surge in online purchases of goods and services (resulting from the rapidly increasing digitalisation of shopping and services provision, accelerated, among other things, by lockdowns and other pandemic-related public restrictions, as well as individual concerns). However, the New Law specifies that these provisions will only apply to e-commerce providers registered in the UAE. Therefore, if you needed to complain about your consumer rights after buying designer shoes from an online portal in Timbuktu, say, the New Law will not provide you with the recourse you are looking for. However, the provisions of the New Law are without prejudice to any international conventions and agreements that the UAE may be party to.
- In keeping with the UAE’s recent focus on data protection – for example, the new Dubai International Financial Centre data protection law (DIFC Data Protection Law No. 5 of 2020) and the federal health care data protection law (Health Data Law No. 2 of 2019), to name just two – and given that federal data protection legislation may soon be published by the government, it is no surprise that the New Law also provides for the protection of consumers’ privacy and data security. Suppliers, providers and advertisers must ensure that no consumer data or private information is used for promotional or marketing purposes.
- Another change under the New Law is that all data, advertising and contracts relating to consumers must be in Arabic. Other languages may also be used, but that is for the relevant supplier, provider or advertiser to determine. Whilst having documents and advertisements in Arabic or a bilingual format is not new in the UAE, the fact that the requirement for Arabic has been included in the New Law suggests that the authorities may be more vigilant in enforcing this requirement in the future.
- That brings us to the changes to what happens if someone does not comply with the New Law: the penalties. The New Law imposes stricter penalties on suppliers who do not comply with their obligations relating to labelling, warranties, repairing or replacing flawed or defective items, maintenance, after-sales service, providing false or misleading information about their products or having terms in their contracts that may be harmful to consumers. Infringements may result in the supplier (or potentially, in the case of a corporate supplier, the general manager or CEO) incurring a prison sentence of up to two years or fines of between AED 3,000 and AED 2 million.
For offences such as not being duly licensed, performing activities such as concealing or not selling a product in order to control the price, adding restrictions on the use of a product, requiring consumers to buy a certain quantity of a product, attempting to create a market monopoly for a product, non-compliance with approved specifications or public health and safety regulations, or failing to use Arabic in their data, advertising and contracts, suppliers may be punished with up to six months’ imprisonment or a fine of between AED 3,000 and AED 200,000.
These are already quite significant penalties, but in the case of repeat offences, the authorities may double them.
What should you do if you have a complaint?
The Department of Economic Development (DED) in each Emirate deals with violations of consumer rights and the implementation of the New Law. Complaints can be made by either calling the hotline: +971 600545555, downloading the relevant smart app (available at consumerrights.ae) or on the DED website: consumerrights.ae.
The principle of caveat emptor has not yet been replaced with the principle that “the customer is always right”, but the latest changes to the consumer protection landscape definitely represent a leap in the right direction. Whilst, in the past, a culture of bartering in the souks was a prime motivation for consumers to be cautious of what they were purchasing, shoppers can now head back to the souks and malls, or continue with their computers, tablets or phones, and get shopping, safe in the knowledge that their consumer rights are protected.
How we can help
Reed Smith was one of the first international law firms to establish a dedicated base in the UAE when we opened in Abu Dhabi in 1978. For over 40 years, the firm has been supporting the growth and potential of regional markets and has created durable and long-lasting relationships with some of the most significant entities in the public and private sectors across the Middle East.
We offer you a dedicated team of multilingual lawyers with leading experience in a variety of disciplines required in the Middle East. Their knowledge and strategic thought-leadership have forged robust community and commercial ties.
Client Alert 2021-058
