Update on UAE’s Digital Law

By on March 15, 2024

POSTED IN Data Privacy/ Technology,

I. Introduction

Recently, UAE published Federal Decree by Law No. (14) of 2023 (“Digital Law”) concerning the modern technology-based trade which repealed the 2021 Law (as defined below). The Digital Law applies to anybody who carries out any activity in relation to modern technology-based trade inside the state or the goods received from outside.

Under the new Law the “Modern Technology-Based Trade” is defined as “the sale and purchase of goods, services and relevant data through technological platforms or modern technology, including, inter alia, the websites, e-platforms or smart applications, including the transactions carried out through electronic or digital commerce or social media platforms. This includes non-digital goods and services that are obtained physically or virtually through modern digital technology or technological platforms.”

Up until now the Federal Decree – Law No. 46 of 2021 (“2021 Law”) i.e. Electronic Transactions and Trust Services law governed the legitimacy of electronic documents, trust services, and digital signatures, bolstering the security of digital transactions in UAE.

But with the new Digital Law, it covers all the online payment and provides more protections to the consumers. The law applies to buyers and sellers through any digital means in the UAE and outside the UAE when residents buy the product through any means online.

II. Key Changes in the New Digital Law

• 2021 Law emphasized on enhancing trust in promoting, and simplifying electronic transactions while ensuring the protection of customers’ rights. It also ensured keeping up with technological advancements across various sectors. Whereas, the Digital Law aims to boost digital transformation by defining regulations for Modern Technology-Based Trade and bridging the gap between digital and physical transactions. It prioritizes consumer protection through measures such as data security, intellectual property rights, and secure digital payments while also setting clear guidelines for the digital trader-consumer relationship to ensure transparency and compliance.
• Electronic Documents have been redefined in the Digital Law. Under the 2021 Law an electronic document didnt lose its legal validity solely because it’s in electronic form and further data within electronic documents maintain its legal validity if it is received and accessible within the electronic information system of the originator. The Digital Law, on the other hand, provides a list of standards and requirements with respect to Modern Technology-Based Trade. These include possessing legal capacity, meeting necessary legal, regulatory, and technical criteria, and obtaining relevant approvals and licenses. Additionally, adherence to competition protection terms, the development of business continuity plans, and cooperation with authorities for data sharing are required. Ensuring a secure online environment, selling only legally permitted goods or services, and transparently detailing pricing and terms of sale and compliance with promotional regulations, accurate representation of products or services, issuing digital invoices are mandated.
• The 2021 Law only contained provisions regulating e-signatures, e-seals and e-documents and there were no provisions dealing with the obligations of individuals. The Digital Law lays down the obligations of the individuals and digital platforms. It provides that individuals must purchase goods and services through legitimate digital platforms. Additionally, an individual is entitled to information regarding the digital trader’s license, contact details, and website for transparency and accountability. The right to return or request the replacement of goods and services purchased through modern technology under certain circumstances is also being given to individuals in the Digital Law. Further, the Digital Law has also imposed obligations on digital payment portals including ensuring services are easily accessible to individuals in line with the digital trade’s nature and refraining from imposing additional fees beyond those disclosed in the digital contract or terms and conditions. An individual also has the right to transparently evaluate his experience, submit complaints, and access designated channels for communication and complaint resolution.

III. Conclusion

Currently, the Digital Law does not have explicit provisions for penalty and the same will be addressed by separate regulations for violations and penalties. Executive laws in this respect are awaited. It is essential for the online businesses to understand the implications of the new UAE law regulating trade through modern technology with the primary objective of bolstering business and investment activities within the UAE.