Another Step Towards Regulating Digital Trading by the Issuance of the Federal Law No.14 of 2023
“E-Commerce and Digital Trading” have been considered hot topics during the past decade. With the development of technology and evolvement of artificial intelligence, additional adjustments are introduced to the trading sector. With the issuance of the Federal Law No.14 of 2023 organizing “Trade through Modern Technology Means” (the “Law”), the UAE has taken a positive step towards the consumers and the transacting through technology means.
How modern technology means and trading through such means are defined under the Law?
At first, let us examine the definition of modern technology means. The Law stipulates that any means of technology used for commerce and trade, whether it is electronic, digital, biometric or an artificial intelligence tool or a technical tool as block chains, encompassing either accessing services and trade via a website or an application.
Interestingly, trading through modern technology means is defined under the Law to include trading of non-digital goods and services whether obtained in an augmented reality or virtual one.
One of the main goals behind the Law is to provide and guarantee consumer protection within the country. The Law grants several rights to the consumers, without prejudice to the valid and applicable laws, including but not limited to the following rights:
- to have full knowledge of payment methods;
- to be granted the right to choose between receiving or rejecting advertisements through technology services or tools;
- to have access to reliable, credible information on the services and products being sold;
- to file or submit a complaint online or on the same digital tool regardless of the type of platform; an application or a website consumers; and
- to be afforded with transparent reviews and non-biased feedback on the service providers or online pages.
The Law provides that in the event a dispute arises, the UAE courts shall be the competent courts to hear and rule over any dispute relevant to the subject matter of this Law. In this respect, while the Law gives the parties to a contract the right to arbitration as dispute resolution mechanism, there is an exception to resort to arbitration in case the digital contract’s value is less than 50,000 Dirhams. This limitation proves the UAE’s forward thinking towards protecting the consumers, which should be followed by the various jurisdictions.
Notwithstanding the foregoing, it is typical that the arbitration costs are much higher than 50,000 Dirhams, which may restrict the ability of the parties to file a claim before arbitration and incur costs that far exceed the value of the contract.
Mandatory or Voluntary Insurance Coverage?
Pursuant to Article 11 of the Law, digital traders and/or logistic services provider may maintain an insurance coverage to the obligations arising in connection with trading via technology means, including the risks associated with electronic fraud.
While the language of the provision is not clear whether it is mandatory or optional for the trader to have such insurance coverage, the remainder of Article 11 implicitly entail that insurance coverage is optional unless the Cabinet explicitly mandates the same.
How can we help?
Our GLA team would be delighted to assist companies in reviewing the applicable terms and conditions of their e-commerce / digital trading platforms to ensure their compliance with the applicable laws. Feel free to reach out to Alex Saleh (firstname.lastname@example.org) and Yousef Alamly (email@example.com) if you have any queries.