In a rapidly evolving marketplace where consumer transactions have become increasingly diverse and complex, ensuring the rights and interests of consumers has become paramount. The United Arab Emirates (UAE), in recognition of the need to strengthen consumer protection measures, has enacted robust legislation aimed at safeguarding consumers against unfair practices and ensuring a fair and transparent marketplace. Federal Decree Law No. (5) of 2023 amending Federal Law No. (15) of 2020 regarding consumer protection lays down stringent regulations to punitive measures for non-compliance of supplier’s obligations. Therefore, it is essential to understand the dynamics of consumer protection law in the UAE for both consumers and providers alike in navigating the modern marketplace landscape.
FEDERAL LAW NO. 15 OF 2020
The law is designed to safeguard consumer rights, with a focus on ensuring the quality of goods and services at the declared price, maintaining consumer health and safety when obtaining goods or receipt of services, and promoting fair practices. The law applies to all goods and services within the UAE, including free zones, covering transactions conducted by suppliers, advertisers, commercial agents, and those involved in e-commerce, provided the supplier is registered within the UAE.
CABINET DECISION 66 OF 2023 (THE EXECUTIVE REGULATIONS), outlines detailed provisions and guidelines for implementing the law effectively. These regulations cover various aspects of consumer protection, including supplier obligations, warranty requirements, advertisement standards, complaint procedures, and measures to address product defects. They provide clarity and specificity on how suppliers and businesses should comply with the law to ensure the rights and safety of consumers are upheld.
Federal Decree Law No. 5 of 2023 amending the Federal Law No. 15 of 2020
The new Consumer Protection Law and its implementing regulation mark a significant advancement in the government’s endeavor to enhance the country’s consumer protection framework in alignment with global standards. This development encompasses two main aspects. Firstly, it entails empowering local authorities with enhanced legislative authority to enforce consumer protection laws more efficiently. These authorities are now vested with key legal competencies, including; receiving, monitoring, and addressing consumer complaints, imposing administrative penalties and fines for breaches of the law and its regulations, and addressing appeals against punitive measures.
| Labelling | The Supplier is obligated to prominently showcase information on the product’s packaging or at a location where it is easily noticeable. This information should be presented in a clear and legible manner. Additionally, the Supplier is required to outline the correct installation and usage procedures, ensuring alignment with the Standard Specifications legislation. In cases where the goods pose any risks, it is imperative for the Supplier to explicitly communicate this information, adhering to the established guidelines. |
| Invoicing | The Supplier must provide the Consumer with a dated Invoice containing essential details such as the trade name, address, type, and price of the Good or Service, and any additional information required by the Implementing Regulation. The Invoice must be in Arabic, with the option to include another specified language for clarity and communication. |
| Monopoly | The Supplier is prohibited from engaging in practices such as concealing the product, refraining from its sale, or withholding services. This prohibition is in place to prevent the Supplier from attempting to manipulate or monopolize prices or compelling the Consumer to acquire certain quantities of the product. Additionally, the Supplier is restricted from imposing conditions for availing services or purchasing goods, and from charging a price higher than the one initially advertised. |
| Harmful Clauses | The law specifies clarity on contractual terms deemed detrimental to consumers present in agreements, invoices, or other documents. These restrictions primarily target clauses that provide suppliers with unfair unilateral powers over consumers or in any way diminish the consumers’ rights concerning goods or services. |
| E-Commerce | Suppliers engaged in ecommerce within the UAE must disclose their names, legal status, addresses, and licensing information to Consumers and Competent Authorities, along with detailed Arabic information about products or services, including specifications, contract terms, payment, and warranties, as specified by the Implementing Regulation. The Regulations also impose specific requirements for ecommerce providers, mandating disclosures related to goods and services offered through e-commerce platforms. Businesses in the UAE must be attentive to these requirements, impacting both consumer and business transactions. |
| Data Protection | The law acknowledges consumers’ data as confidential and prohibits suppliers from disclosing it for trading or marketing purposes. Additionally, the Consumer Protection Law safeguards consumers’ religious values and traditions during transactions. Suppliers are compelled to provide the competent authority with commercial books, ledgers, trade data, and supporting documents when requested. |
| After Sale Services and Spare Parts | The Supplier is obligated to execute all warranties, ensuring the availability of necessary spare parts, maintenance, and the option for replacement or a refund within the specified timeframe. Concerning services, the Supplier must warrant their quality and freedom from defects and malfunctions, committing to reimburse the Consumer or properly redo the service if issues arise within a timeframe commensurate with the service’s nature. The Regulations explicitly demand the provision of spare parts for the operation and repair of goods sold in specific circumstances. |
In recent developments on Consumer Protection Law, Federal Decree Law No. 5 of 2023 introduces significant amendments to Federal Law No. 15 of 2020, along with its executive regulation issued by Cabinet Decision No. 66 of 2023. These amendments aim to enhance consumer rights and provide a robust framework for consumer protection in the UAE.
Key Highlights of the New Consumer Protection Law (Federal Decree Law No. 5 of 2023):
- Establishes a comprehensive legislative framework to safeguard consumers’ rights and ensure the highest standards of protection when purchasing goods and services.
- Introduces a list of 46 offenses, with fines for violations reaching up to AED 1 million, aiming to prevent any violations on consumer rights.
- Imposes 43 obligations on providers to establish a more balanced and equitable relationship between suppliers and consumers.
- Introduces integrated regulatory mechanisms and procedures to promote sound business practices and enhance consumer satisfaction, happiness, and well-being.
- Grants relevant local authorities’ necessary powers to enforce the provisions of the law and its implementing regulation.
- Authorizes local authorities to receive and resolve consumer complaints, impose penalties and fines for violators, and address grievances effectively.
- Introduces a new complaint mechanism for consumers, enabling expedited dispute resolution and reducing reliance on the courts.
- Provides clear procedures for imposing sanctions and fines, ensuring a solid legal basis for resolving consumer disputes.
- Supports the promotion of good business practices across all markets in the UAE.
- Strengthens oversight mechanisms for competent local authorities to ensure compliance with consumer protection laws.
- Enhances transparency and improves consumer experience by providing better services and greater protection at various stages of the contractual relationship.
- Offers consumers guarantees when purchasing goods or receiving services, thereby fostering trust and confidence in the marketplace.
- Affirms the competence of local authorities in accepting consumer complaints and resolving disputes.
- Specifies cases where complaints should be examined by the Ministry, based on mutual agreement between the Ministry and the competent authority.
- Prohibits the inclusion of any clause that may harm consumers and prohibits monopolistic practices.
- Outlines specific examples of conditions or provisions that providers are prohibited from including in contract forms, invoices, or other consumer-related documents.
The amendments to the Consumer Protection Law signify a significant step towards strengthening consumer rights and ensuring fair and transparent business practices in the UAE. These enhancements aim to empower consumers, foster trust in the marketplace, and promote a thriving economy based on mutual respect and accountability between suppliers and consumers. Understanding the dynamics of consumer protection law in the UAE is indispensable for both consumers and providers in navigating the complexities of the modern marketplace. It not only fosters trust and confidence among consumers but also fosters a fair and transparent commercial environment conducive to sustainable economic growth.
