Caveat emptor has less teeth following the UAE’s new consumer protection law

My first thoughts were: I’m going to learn about shopping? I really liked those Doc Marten’s in that shop down the road… I wonder if they have a Kurt Cobain t-shirt to go with it.”

However, my dreams of manly shoes and 90s grunge rocker tees were quickly abandoned when I learned that the very exotic sounding “caveat emptor” translates in English to “buyer beware” and there are various legal implications that come with it.

Dubai, of course, has always had the coveted reputation of being a shopping haven. It even has an annual shopping festival, but the concept of caveat emptor reigned supreme. Shoppers could purchase almost anything, from very affordable electronic products to designer products, or the most exquisite and rare jewelry, but always had to be careful because there was no real recourse if you have been duped by an over-zealous or low-on-ethics shopkeeper.

In 2006, the federal consumer protection law was passed, implementing much needed regulations and guidance for consumer rights in the UAE. Last year, an updated version of the law was passed, granting consumers even more protections, including for online shopping – which has skyrocketed due to lockdowns during the global pandemic.

In general, the 2020 law is similar to the 2006 law with regards to protecting consumers’ rights with an aim to, among other rights, create a safe and suitable environment for consumers to purchase products and services, protect consumer’s religious values, customs and traditions and to ensure that consumers get accurate information about that they purchase and are aware of their rights and recourse. It also provides for quick settlement of disputes, compensation for damages and generally provides a framework for suppliers with regards to how to treat consumers in a fair and legal way.

However, the new law brings in some challenges.

The 2020 law is now applicable to not only suppliers, vendors and advertisers in the UAE, but also to e-commerce providers. This change is especially significant following the dramatic increase of online shopping last year.

Last year, an updated version of the law was passed, granting consumers even more protections, including for online shopping.

However, the law specifies that provisions only apply to e-commerce providers registered in the UAE. Therefore, if you need to complain about your consumer rights after buying those Jimmy Choo’s from an online portal in Timbuktu – for example –this new law will not be able to give you the recourse you are looking for. These provisions are without prejudice to any international conventions and agreements to which the UAE is party.

In keeping with the UAE’s recent focus on data protection, the new law also provides that consumer’s privacy and data security needs to be protected. This is in line with the government’s move toward increased protection, including the new Dubai International Financial Centre data protection law issued last year and the healthcare data protection law. Further, federal data protection legislation may soon be considered by the government.

It seems logical that suppliers, providers and advertisers have to ensure that no consumer data or private information is used for promotion or marketing purposes.

Another change in the new law is that all data, advertising and contracts relating to the consumer must be in Arabic. Other languages may be used in addition to Arabic, but this is the supplier, provider or advertiser’s prerogative.

That brings us to the changes relating to what happens if someone does not comply with the new law – the penalties. The new law imposes stricter penalties on suppliers who do not comply with their obligations with regards to labelling, warranties, repairing or replacing flawed or defective items, maintenance, after-sales services, providing false or misleading information about products or having terms in their contracts that may be harmful to consumers. These infringements mean that a supplier may incur a prison sentence of up to two years and fines of between AED 3,000 to AED 2,000,000.

UAE’s recent focus on data protection, the new law also provides that consumer’s privacy and data security needs to be protected.

For offences such as not being duly licensed, creating undue competition activities in an attempt to monopolise the market, non-conformance to approved specifications or public health and safety regulations or not using Arabic in its data, advertising and contracts, the penalties can be imprisonment of up to six months or a fine between AED 3,000 and AED 200,000.

These are already quite significant penalties, but if there are repeat offences, these penalties may be doubled by the authorities.

For consumer complaints, there is a Ministry of Economy hotline available and the Department of Economic Development in each Emirate deals with consumer protection rights violations and the implementation of the provisions of the new law.

The concept of “buyer beware” has not yet been replaced by “the customer is always right”, but the latest changes to the consumer protection landscape is definitely a leap in the right direction. Where the culture of bartering in the souks was a prime motivation for consumers to be cautious of what they are purchasing, shoppers can now head back to the souks, malls, or their computers, tablets or phones, and get shopping – feeling safer with the knowledge that their consumer rights are protected.

Marize Coetzer, Corporate Associate at Reed Smith.