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New Consumer Protection Law in the UAE

The New Consumer Protection Law in the UAE

The Consumer Protection Law No, 24 of 2006 (the Previous Consumer Law) was recently repealed in November 2020 by Federal Law No. 15 of 2020 on Consumer Protection (the New Consumer Law).

The New Consumer Law has as its objective the aim of further protecting consumer rights in the UAE and is applicable to the sale and purchase of all consumer goods within the UAE, as well as those e-commerce channels registered within the territory of the UAE.

Although reaffirming provisions of the Previous Consumer Law, the New Consumer Law has been developed to make provision for emerging sectors such as the e-commerce market.

This article will seek to discuss some of the more prominent changes introduced by the New Consumer Law.

Scope

Although the scope of the Previous Consumer Law was already significantly broad, it has been developed further by expanding the definition of a “Supplier” to include any person who plays a part in producing, trading or storing a commodity.

Privacy and Data Protection

The UAE does not have comprehensive, overarching data privacy legislation; however, the New Consumer Law does aim to protect consumer data and privacy by the inclusion of Article 4(5) which establishes the consumer’s right to privacy, data security and protection against the unauthorized use of his personal data for marketing or promotional purposes.

Article 4(6) goes further to oblige suppliers to protect and respect the religious customs, values and traditions of a consumer when providing goods or services.

Provision of documentation and information in Arabic

Article 8(3) of the New Consumer Law provides that a Supplier is obliged to provide a consumer with an invoice including the date, trade name, address, type of good, its quantity and price, type of service and the details and price thereof, as well as any other requirements which may be prescribed by the Executive Regulations.

Article 8(4) goes further to prescribe that the said invoice must be in Arabic, however the Supplier has the discretion to add any additional language which he chooses to the invoice. Article 30 prescribes imprisonment for no longer than 6 months and a fine of between AED 3,000.00 and AED 200,000.00 for failure to comply with the provisions of Article 8(4).

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E-Commerce

As mentioned previously, the amendments to the New Consumer Law have the affect of now including the e-commerce sector. This is evidenced by the provisions of Article 25 which prescribe that an e-commerce supplier registered within the UAE is required to provide consumers as well as the relevant authorities with information relating to its name, address, licensing authority, legal status, payment and warranty terms, contracting terms as well as the details of the services and products it provides in Arabic.  It is important to note that this requirement does not include e-commerce providers registered outside the borders of the UAE.

Recurring Flaws, Defects or Malfunctions

The New Consumer Law further provides in Article 13 that in instances where flaws, defects or malfunctions recur more than 3 times within the first year of the consumer having received the good or service, the Supplier will be obliged to repair, replace or reimburse the consumer accordingly.

License for Promotion

Prior approval in the form of a license must be obtained from the relevant authorities before a supplier may promote goods or services, make general discounts or even advertise such promotions or discounts. This is prohibition is set out in Article 18 of the New Consumer Law. Article 30 prescribes imprisonment for no longer than 6 months and a fine of between AED 3,000.00 and AED 200,000.00 for failure to obtain the required license.

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Penalties for non-compliance

The penalties for non-compliance with the New Consumer Law are set out in Chapter 4 thereof.

One of the most noteworthy is set out in Article 29 stating that false or misleading advertising and failure to replace malfunctioning goods or services may attract severe penalties including up to 2 years imprisonment and fines of between AED 10,000.00 and AED 2 million.

Article 30 prescribes imprisonment for no longer than 6 months and a fine of between AED 3,000.00 and AED 200,000.00 for violation of competition provisions set out in Article 19 or for the failure to ensure that goods sold comply with the approved standards and public health and safety rules (Article 20) or for the failure to comply with the requirement set out in Article 26 that data, advertisements, and contracts related to the Consumer shall be made in Arabic.

Penalties may be doubled in instances of recidivism.

Conclusion

The New Consumer Law came into effect on 16 November 2020 and the in accordance with Article 36, the Executive Regulations are expected to be published in May 2021.

Furthermore, Article 33 of the New Consumer Law provides for a transitional period of one year from the date of coming into force of the new law to allow those affected by its provisions to become fully compliant therewith. The deadline in this regard is 10 November 2021.

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M. Al Khairy, LL.B. is a Senior Partner of HHS Lawyers in UAE. Practicing law for almost a decade, he has in-depth knowledge on UAE legislation with particular expertise on legal drafting, contract drafting, labor disputes, family law, and regulatory compliance for business organizations. Al Khairy also provides counsel on legal rights and obligations in the UAE to clients, including individuals and businesses subject to investigation or prosecution under Criminal Law by major regulators. Read more