Growth of E-Commerce
The UAE has been a leading jurisdiction for e-commerce platforms landing services, whether remotely from their home jurisdiction or within the UAE itself. This E-Commerce Law will provide welcome clarity as this sector continues to grow.
Modern Means of Technology
The E-Commerce Law focusses on the concept of trading through "Modern Technological Means", which is broadly defined as "any technological means used for trading whether it is electronic, digital, biometric, artificial intelligence, blockchain, or in technical media, and whether on websites or smart applications". The wide scope of this definition is reflective of and continual growth of e-commerce activities within the region.
Scope and Exclusions
The provisions of the E-Commerce Law apply to all commercial activity conducted through Modern Technological Means inside the UAE and to the trading of goods and services from outside of the UAE. The E-Commerce Law extends its jurisdiction to free zones (for activities that are not wholly within the free zone or do not have equivalent regulations in the free zone), ensuring a comprehensive regulatory framework for e-commerce.
Government procurement, online platforms used for non-commercial purposes, and all transactions carried out by entities licenced by the UAE Central Bank (who are subject to the UAE Central Bank's specific consumer protection rules) expressly fall outside of the remit of the E-Commerce Law.
Eligibility
The E-Comerce Law clarifies the eligibility criteria that must be met to conduct an e-commerce business in the UAE, making the authorisation similar to conventional trade. The requirements include compliance with all legal, regulatory, professional and technical requirements, obtaining the appropriate approvals, permits and licences from the competent authority, and adopting a secure technology infrastructure.
Consumer Rights
The E-Commerce is largely consumer centric, containing provisions which seek to ensure a secure e-commerce environment whereby consumers are adequately informed. The E-Commerce Law contains provisions including the right to secure purchases, protection of intellectual property rights and a clear mechanism to resolve complaints. UAE data protection legislation is also expressly applicable to all consumer information and data, its classification, and its ownership. Insurance coverage is mandated for digital merchants and entities involved in logistics and digital payments.
Enforcement
The E-Commerce Law indicates that a "ecosystem of supervision and control" will be established by the Ministry of Economy in order to achieve the objectives of the E-Commerce Law. We await further guidance as to the structure of this ecosystem and the means for enforcement thereunder but anticipate that activities related to online trading will be treated with the same importance as traditional methods.
Next steps
If you have any questions or would like to know how the introduction of the E-Commerce Law may affect your business or transactions, please email the key contacts listed below.
Authored by Isabelle Forrest and Imtiaz Shah.
