A new e-commerce law now in force in the United Arab Emirates (UAE) marks another significant step towards clear and effective regulation of the rapidly growing digital commerce sector, according to Pinsent Masons in a briefing note on 5 December.
The law, which came into force in September 2023, provides a wide-ranging set of standards and requirements applicable to businesses engaging in the broadly defined "trading through modern technology means", covering digital commerce, e-commerce and social commerce. Its scope includes trading on websites, platforms, smart phone applications, social media, virtual stores and blockchain based platforms, and it places digital consumers' rights and obligations at the centre of the new law.
Dubai-based technology law expert Martin Hayward of Pinsent Masons said the new law "demonstrates the rapid growth of digital commerce in the UAE, in its varied forms, the importance of the development of digital commerce for the UAE economy moving forward and the need for clear and effective regulation of the sector".
"The new law intersects with, and complements, a number of other UAE laws on consumer protection, intellectual property, payments, data protection, cybersecurity and electronic transactions, all of which apply to digital commerce," he said.
The law sets out the standards which must be met when trading through modern technological means, including providing a technically secure environment for online trading and meeting cybersecurity requirements, prioritising consumer privacy, avoiding the use of misleading data or methods to describe and promote goods and services, meeting competition law requirements and ensuring business continuity plans are in place.
It gives a set of rights to consumers, such as to return goods or services bought digitally; to a means of communication with the digital merchant to rate their experience or submit complaints; to choose whether to receive advertising or marketing campaigns via phone calls, emails, or social media platforms; and to have their consumer information and data secured and protected.
It also provides dispute resolution methods for e-commerce disputes, including a dispute resolution committee formed by the Ministry of the Economy, and arbitration for digital contracts of a value higher than AED 50,000 (approx. US$13,600).
According to Hayward, the new law "seems to have a degree of extra territorial effect".
"It applies to persons who commercially engage through modern technological means either inside the UAE or by receiving goods from outside the UAE," he said. "However, this will need to, and may, be clarified in the regulations that will follow this law."
The new law does not apply to UAE government procurement; data, platforms and smart applications being used for non-commercial purposes; digital currencies used for payment and trading that are under the supervision of the UAE Central Bank; and transactions carried out by licensed financial institutions and insurance companies that are under the UAE Central Bank's supervision.
Other recently introduced new laws relevant to the digital commerce sector in the UAE include the Consumer Protection law and the law on the Protection of Personal Data.
