Federal Law No. (15) of 2020 on Consumer Protection

The new Federal Law No. 15 of 2020 on Consumer Protection (the “new Consumer Protection Law”) issued on 10 November 2020 repeals the previous Federal Law No. 24 of 2006.

The new Consumer Protection Law covers all goods and services within the UAE, including in free zones, and all related operations carried out by suppliers, advertisers or trade agents, including electronic commerce transactions if the supplier is so registered in the UAE.

The key provisions are summarised here:

Consumer Privacy

The introduction of privacy and data security for consumers and the unauthorised use of consumers’ data (Article 4(5)). Suppliers and businesses now have an obligation to safeguard their consumers’ data, avoid using consumer data and information for marketing and promotion, and protect consumers’ religious values, customs and traditions when providing a commodity or receiving any service.

E-Commerce

All e-commerce providers registered within the UAE shall be required to provide the consumers and competent authorities with their names, legal status, address, licensing authorities and sufficient information in Arabic on the services they provide, specifications, terms of contracting, payment and warranty terms (Article 25). These obligations do not apply to e-commerce providers based outside the UAE. Information made available to consumers, data, advertisements, contracts and invoices must be in Arabic, and other languages may also be used alongside Arabic at the supplier’s discretion (Article 8).

Penalties

The new Consumer Protection Law stipulates more robust penalties for suppliers. Suppliers who falsely advertise products or services can face imprisonment of up to two years and a fine not exceeding AED 2 Million. This penalty will also apply to suppliers who do not remedy a defective product by repairing or replacing the products or services without charge. Penalties will be doubled in the event of recurrence.

It is intended that stricter penalties will offer further protection to consumers and ensure suppliers compliance with these new obligations.

Companies have a one year transition period to comply the provisions of new law (Article 33) from the date it came into force. Such a period may be extended by a resolution from the Cabinet.

The Cabinet will issue the Executive Regulation of this law upon a proposal from the Minister within six months from the date the new law was published in the Gazette, on 15th November 2020. The Executive Regulation, therefore, is expected to come into force by 15th May 2021.

We will, of course, provide a further update upon the issuance of the Executive Regulation.