Other BriefingsUAE Details Provisions of Recently Implemented E-Commerce Law
The Ministry of Economy of the UAE recently unveiled detailed provisions of its latest e-commerce legislation, Federal Decree Law No. (14) of 2023 on Commerce through Modern Means of Technology, which has been in effect since September.
This law aims to encourage both domestic and foreign investment in the Emirates and aligns with global digital commerce regulations. Notably, it supersedes the 2006 law, which primarily focused on electronic transactions rather than the broader spectrum of e-commerce.
Other laws in the UAE pertaining to the digital commerce sector include the Consumer Protection Law and the legislation addressing the Protection of Personal Data.
Applicability
Applicable to all e-commerce activities within the UAE and those originating from overseas, this legislation mandates compliance for all e-commerce platforms serving users in the UAE, marking a significant and noteworthy development.
The law applies to enterprises involved in the broadly characterized “trading through modern technology means,” which covers transactions conducted on websites, platforms, smartphone applications, social media, virtual stores, and blockchain-based platforms. It also includes the rights and responsibilities of digital consumers.
Business facilitation and compliance
Federal Decree Law No. (14) of 2023 is expected to streamline e-commerce business operations and contracts in the UAE. It seeks to enhance efficiency and reduce business costs while fostering trade expansion through the adoption of advanced technologies and smart infrastructure. Importantly, it treats e-commerce trade on par with conventional trade.
Eligibility criteria for commencing an e-commerce business in the UAE under the new law include meeting legal, regulatory, professional, and technical requirements. Entrepreneurs must obtain necessary approvals, permits, and licenses, maintain a secure technology infrastructure, and comply with cybersecurity and anti-piracy standards. Merchants are now obligated to provide customers with detailed digital invoices for purchases and are permitted to sell only authorized goods and services in the UAE.
The legislation also includes measures to protect consumer interests, intellectual property rights, and ensure secure transactions. It coordinates digital payment gateways in collaboration with relevant entities in the UAE.
The 2023 e-commerce law introduces optional jurisdictions for dispute resolution, offering a dispute settlement committee or arbitration as options.
Consumer rights
The 2023 e-commerce law grants consumers a range of rights, including the ability to return digitally purchased goods or services, communicate with the digital merchant to evaluate their experience or lodge complaints, decide whether to receive advertising or marketing campaigns through phone calls, emails, or social media platforms, and ensure the security and protection of their consumer information and data.
Dispute settlement
The legislation outlines dispute resolution mechanisms for e-commerce disputes. This includes the establishment of a dispute resolution committee by the Ministry of the Economy and arbitration options for digital contracts exceeding a value of AED 50,000 (approx. US$13,613.96).
However, legal experts still await further clarity on these provisions.
UAE e-commerce market
The UAE’s e-commerce market is projected to reach US$9.2 billion in 2026, reflecting a 92 percent increase from 2021, according to the Dubai Chamber of Commerce. Euromonitor data suggests that the e-commerce share of total retail sales in the UAE is expected to reach 12.6 percent by 2026. This growth is driven by the global increase in online shopping post-pandemic and consistent investment inflows into the sector’s infrastructure.
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