UAE Approves Federal Law to Protect Consumers

“We see our customers as invited guests to a party, and we are the hosts, it’s our Job every day to make every important aspect of the customer experience a little bit better” – Jeff Bezos.

However, with increasing levels of development, while some companies respect the customer, it is observed that an increasing number of enterprises have sprung up to take a consumer for the ride. As such, governments have turned their focus towards consumer protection, as consumers are the primary movers of the economy. Consumers are the market for which all goods & services are produced. Furthermore, consumers are at a weaker position when contrasted against large companies, which may have the resources to trample on the complaints made by a poor consumer. While, this seems to be the motto of global tech giants and online retail operators, an increasing number of enterprises have taken up policies that take customers for a ride. The UAE government has therefore, turned their focus towards consumer protection. This is now of even more importance with the global pandemic situation. The COVID-19 pandemic has created a myriad of issues in the UAE consumer market starting with cancellation of orders, lack of availability of resources, inflated prices of essential goods etc.

The Former Regime – Federal Law Number 24 of 2006

The Federal Government had earlier promulgated Federal Law 24 of 2006 (“2006 Federal Law”) and Cabinet of Ministers Resolution No. (12) of 2007 in respect of Executive Regulation to the Federal Law No. 24 of 2006 in respect of Protection of Consumers (“Resolution”), by defining the rights and obligations of the players in the market.

The legislation also included other measures to protect consumers against abusive monopolies in the market, overpricing of goods/services and other fraudulent commercial activities. Under the 2006 Federal Law and the Resolution, a consumer is defined as a person who has obtained a good or a service (with or without charge) to satisfy their or another’s needs. Consumers are granted the following rights under the law –

  • Right to SafetyConsumers have a right to be protected against any product, production process or service which may be detrimental to their health or safety.
  • Right to KnowConsumers have a right to accurate information regarding any product or service, such as information pertaining to the origin of products, their ingredients, expected risks, etc.
  • Right to ChooseConsumers have a right to have multiple options when it comes to choosing services or goods. This right promotes a competitive marketplace for higher consumer benefit.
  • Right to RepresentationConsumers have a right to express opinions regarding the pricing and availability of a good or service, as well as of other important characteristics of the same.
  • Right to be Informed

Consumers have a right to acquire awareness, knowledge and requisite skills for the utilization of consumer rights.

Obligations of the Suppliers

Essential Information to be indicated–  the supplier must ensure essential information about the goods such as the type and nature of the product, contents, directions of use, expiry date, price in legible font etc. is provided to the consumer.

Standardized Goods the supplier must ensure conformity of the goods or services with the approved standard specifications.

Warning of any defect/recall of goods– the supplier must immediately notify the Department, the consumer and concerned parties of any defect in the product or service that may cause harm to the consumer, and follow the procedure set out in the Resolution for recall of defective goods.

Customer Services every supply contract must include clauses for maintenance, repair or after sale service and return of goods for a limited period after discovery of any defect. The supplier must exchange or accept return of goods if a defect is discovered by the consumer.

Liability the supplier is liable for any damage incurred from usage or consumption of goods, or spare parts of durable goods for a prescribed period of time.

Guarantee the supplier must provide a guarantee in the manner and to the extent set out in the Resolution for all services rendered by them or provide refunds or redo the service.

Warranty– in the absence of warranties as set out in the Resolution, for locally produced goods the producer and the seller are jointly liable.

No Discrimination– no provider shall be permitted to exercise any form of discrimination among consumers while selling any goods or service, whether in terms of price or quality.

Customer Charter for Federal Government Services

The UAE Government has not turned their focus simply towards consumer satisfaction with private services, and had also earlier in the year 2011, promulgated a Customer Charter for Federal Government Services. The Charter infuses the services offered by the Federal Government with speed, transparency, mutual respect and professionalism, thus aiming to promote consumer satisfaction even in its interactions with the Government.

The GCC Unified Law on Consumer Protection

The Gulf Cooperation Council has also promulgated a Unified Law on Consumer Protection, in order to achieve legislative harmonization amongst member countries. The Unified Law aims to provide adequate protection to consumers against the fast pace of digital enterprises, which may leverage accelerated growth and increasing technology to the detriment of consumers. The GCC Framework creates liabilities for defective products, as well obligations for repairs or replacements. Products in the region should be fit for the purpose that they are being sold for, as well be reasonably safe for the use of the consumer. National limits apply when it comes to the reporting timeframes for the recall, replacement of such defective goods.

The 2019 UAE Consumer Protection Law

On December 25th, 2019, the UAE Cabinet, chaired by His Highness Sheikh Mohammad bin Rashid Al Maktoum, approved the Consumer Protection Law (“CP Law”), which aims to regulate prices in favour of stability, and weed out any negative practices that impacted consumer welfare. The new law is in line with the GCC’s unified laws on consumer protection, and takes special cognizance of the e-commerce economy. Reportedly, the new law shall also strive to ensure that the delivery of goods and services happens in distribution patterns which are tailored to the needs of the consumer. Code of ethics have also been made available for producers and distributors of various goods and services. The law aspires to promote sustainable consumption, maintain stability of prices, as well as bolster the consumer’s right to choose. The promulgation of the law indicates the participation of the government in the economy, updating legislation in order to accord full protection to consumers within the region.

Post Covid-19 regulation and monitoring

In addition to the laws that are applicable for consumer protection, the Dubai Economy has initiated an awareness campaign through its Commercial Compliance & Consumer Protection (CCCP) division. This has been done to issue warnings and notices to stop indiscriminate price hikes on staple and essentially by imposing penalties on merchants who engage in such practices. Inviting consumer complaints and any incidence of malpractice.

In pursuance of this campaign the Dubai Economy has also launched the Price Monitor portal to track prices in all retail platforms of staples, listing basic goods as essentials in order to allow normal functioning of the economy.

Conclusion

The new CP Law guarantees the protection of consumers in the UAE, as well as price stability in the market economy. The Government’s participation in the economy also aims to have a prohibitive impact on any negative practices against consumer welfare, as well as prevent rapid price hikes. By regulating advertisers, suppliers and commercial agents, and promoting consumer rights against the advent of e-commerce, the UAE Government has taken a positive move that should surely bolster the faith of consumers in the legal framework.

Author:

ADV. Urvashi Ramachandran
Wills, Trust, Estate Planning, Probate, Family | Dispute Resolution
urvashi@goodwinslaw.ae