Trading Through Modern Technology Regulations

Trading Through Modern Technology

Questions & Answers

1. What is the Federal Decree-Law No. 14 of 2023 about?
   Federal Decree-Law No. 14 of 2023 regulates all trading activities conducted through modern technological means, such as websites, smart applications, and digital platforms. It covers the sale, purchase, and exchange of goods, services, and data in a digital environment. This law aims to enhance consumer protection, ensure data security, establish clear merchant responsibilities, and promote the UAE’s strategy for digital transformation. It applies to all commercial activities conducted electronically within or from the UAE.

2. What does "Trading by Modern Technological Means" refer to?
   "Trading by Modern Technological Means" refers to the use of digital, electronic, or other technological tools for conducting commercial activities. This includes buying, selling, or exchanging goods, services, and data via websites, platforms, or smart applications. Trading can occur in the real world but is facilitated by technology, such as through e-commerce, digital commerce, and social commerce. Additionally, it encompasses virtual goods and services bought and sold online.

3. What are "Modern Technological Means"?

   
   "Modern Technological Means" refers to various technologies used to conduct digital trading, including electronic devices, digital platforms, biometrics, artificial intelligence, and blockchain systems. These means can be used on websites, smart applications, or any other digital medium. Examples include online marketplaces, virtual reality stores, and digital currencies.

4. Who is a Digital Merchant under the law?
   A "Digital Merchant" is defined as any natural or legal person who engages in selling goods or services using modern technological means. This includes individuals or businesses that operate online stores, platforms, or smart applications. Digital merchants are required to comply with specific obligations, such as obtaining the necessary licenses, adhering to consumer protection laws, and providing secure payment methods.

5. What is the role of a Consumer in digital trading?
   A "Consumer" is any natural or legal person who buys or acquires goods or services from a digital merchant through modern technological means. Consumers have rights under this law, such as protection of personal data, the right to clear information about the products or services they purchase, and the ability to seek remedies if they receive faulty or misrepresented goods.

6. What are the objectives of the Federal Decree-Law No. 14 of 2023?
   The objectives of the law include:

   • Promoting Digital Transformation: Supporting the UAE’s strategic objectives in digital transformation and enhancing digital commerce.

   • Regulating Digital Trading: Developing a legal framework for trading through modern technological means.

   • Ensuring Consumer Protection: Protecting consumers from fraud, defective goods, or misuse of personal data.

   • Data Security: Enhancing the protection of data exchanged in digital transactions.

   • Fair Competition: Ensuring that online merchants adhere to fair competition rules and do not engage in deceptive practices.

7. What is a Digital Contract?
   A "Digital Contract" is any agreement made between a digital merchant and a consumer using modern technological means. This could include contracts agreed upon through websites, platforms, or smart apps. Digital contracts contain the terms and conditions of the sale, the price, payment methods, and other critical details, and they are legally binding once the consumer accepts the terms during the purchase process.

8. What is a Digital Signature under the law?
   A "Digital Signature" refers to a form of electronic signature that validates the identity of a person in a digital transaction. It can consist of letters, numbers, symbols, sounds, or biometric data (like fingerprints) and is used to verify the signer's identity. The signature might also include a message sent via email or mobile for identity verification. Digital signatures are legally binding in digital contracts.

9. What is the legal status of Virtual Stores?
   A "Virtual Store" is an online platform where goods and services are sold digitally. Virtual stores include websites, e-commerce platforms, and smart applications where a digital merchant can offer, advertise, and sell products or services. These stores must comply with UAE regulations regarding licensing, consumer protection, and data security.

10. What are the primary responsibilities of Digital Merchants?
    Digital merchants must:

• Obtain the required licenses and approvals from the competent authorities.

• Provide accurate and truthful information about the goods and services they sell.

• Ensure a secure environment for digital transactions, including protecting consumer data.

• Offer clear terms and conditions for purchasing goods or services.

• Provide digital contracts or terms of sale that are easily accessible to consumers.

• Adhere to competition laws and refrain from using deceptive marketing practices.

• Ensure the availability of customer service channels, including for complaints and returns.

11. What goods or services can a digital merchant legally sell under this law?
    Digital merchants can only sell goods and services that are legally permissible in the UAE. They must refrain from selling any items that require special approvals unless they have obtained such approvals from the competent authority. For example, the sale of controlled substances, health products, or weapons may require specific permits.

12. What are the conditions for advertising goods and services under the law?
    Advertising for goods and services must be truthful and not misleading. Digital merchants must clearly present the terms of the sale, such as the product description, price, payment terms, and any associated fees. Additionally, they must comply with applicable advertising standards and consumer protection laws in the UAE. Misleading or deceptive advertisements can result in penalties.

13. How are consumer rights protected in digital transactions?
    Consumers are granted several rights under this law, including:

• Receiving goods and services that match the description provided by the digital merchant.

• Secure and transparent payment methods.

• Clear and accurate product information, including pricing and terms of sale.

• The right to file complaints if goods are defective or if they have received inadequate services.

• Protection of their personal data and the right to decide whether they receive marketing communications

  .

14. What obligations do digital merchants have regarding the return of goods?
    Digital merchants must provide consumers with the right to return goods or services in the following cases:

• The product or service received is defective, incomplete, or does not match the description provided.

• There is a delay in delivery that makes the product unusable.

• Any breach of the digital contract’s terms and conditions. Consumers may forfeit their right to a return if the product has been used beyond checking for defects or if it is a perishable good.

15. What are the penalties for non-compliance with the Federal Decree-Law No. 14 of 2023?
    Non-compliance with this law can result in various administrative penalties, such as fines, the suspension of the digital merchant's license, or even legal action. Penalties depend on the severity of the violation and are imposed by the Ministry or other competent authorities.

16. What are logistics services under the law?
    Logistics services refer to the support services provided for the storage, shipping, and delivery of goods purchased through modern technological means. Digital merchants may provide these services directly or through third-party logistics companies licensed in the UAE. The digital contract must specify the delivery terms, logistics fees, and timelines.

17. How does the law address digital payment gateways?
    The law requires that digital payment gateways provide secure and transparent services to consumers. Digital merchants must not charge additional fees for payment methods beyond what is stated in the digital contract. Payment gateways must meet cybersecurity standards to protect consumer data and payment information.

18. What protections does the law offer consumers regarding data security?
    The law mandates that digital merchants and platforms protect consumer data by ensuring secure transactions and preventing unauthorized access to personal information. Digital merchants must comply with UAE’s data protection laws, which require that consumers’ personal information is only used with their consent and kept confidential unless required by law.

19. What are the requirements for digital contracts under the law?
    Digital contracts must clearly outline the terms and conditions of the transaction, including product descriptions, prices, logistics fees, and payment terms. The consumer's acceptance of these terms, whether through a website, app, or other technological means, constitutes agreement to the contract, which is legally binding under the law.

20. How are digital signatures used in e-commerce under this law?
    Digital signatures are used to verify the identity of individuals involved in a digital transaction. The law recognizes digital signatures as legally binding, provided they comply with authentication standards. Digital signatures can be in the form of biometric data, encrypted codes, or other forms of digital verification used to authenticate the identity of the signer.

21. an digital merchants impose additional fees on consumers?
    Digital merchants are prohibited from imposing additional fees beyond what is stated in the digital contract or terms and conditions. Any deviation from the announced fees must be explicitly agreed upon with the consumer, or it may be deemed a violation of the law.

22. How is intellectual property protected under the law?
    Intellectual property rights are protected in the context of digital trading. Digital merchants must ensure that the goods and services they sell do not infringe on the intellectual property rights of others. Consumers are also protected from purchasing counterfeit goods through digital platforms, and violators may face penalties.

23. What standards must digital merchants follow regarding cybersecurity?
    Digital merchants must implement cybersecurity measures to protect their platforms and consumer data. This includes protecting against cyberattacks, ensuring secure payment methods, and maintaining data privacy standards. Merchants must comply with the cybersecurity standards set by the competent authorities.

21. How can consumers file complaints under the law?
    Consumers can file complaints if they encounter issues with goods or services purchased through modern technological means. Complaints can be submitted directly to the digital merchant via phone numbers or communication channels that must be permanently available. Alternatively, consumers can raise their complaints to the Dispute Resolution Committee established by the Ministry or the relevant competent authority. Complaints may address issues such as receiving defective goods, delayed deliveries, or discrepancies between the product description and the item received.

22. What are the standards for digital payment gateways under this law?
    Digital payment gateways must adhere to the following standards:

    • Provide a secure and transparent environment for payment transactions.

    • Ensure that consumers can complete transactions easily and securely.

    • Refrain from charging additional fees beyond what is outlined in the digital contract.

    • Comply with technical and cybersecurity standards, ensuring that consumer payment data is protected against breaches and unauthorized access.

    • Facilitate smooth, uninterrupted digital payments in line with the flow of trading by modern technological means.

23. What are the rules for logistics services in digital transactions?
    Logistics services, such as storage, transport, and delivery, can be provided by digital merchants or through third-party licensed logistics companies. The law requires that:

    • Logistics fees must be clearly stated in the digital contract or the terms and conditions.

    • No additional logistics fees may be imposed unless they have been transparently agreed upon.

    • Digital merchants must meet the logistics standards set by competent authorities, including delivery timelines, secure handling, and fair pricing for services rendered.

24. What are the key protections offered to consumers under this law?
    Consumers have the following key protections:

    • Right to Accurate Information: Consumers must receive detailed, accurate descriptions of goods or services, including price, payment terms, and shipping costs.

    • Secure Payments: Payment methods must be secure, and consumers should not be charged extra fees unless previously agreed upon.

    • Right to Returns: Consumers can return goods or request refunds if the goods are defective, incomplete, or do not match the description provided.

    • Data Protection: Consumer data, including payment details and personal information, must be securely handled and cannot be shared without the consumer’s consent.

    • Right to File Complaints: Consumers can lodge complaints regarding their digital transactions, and merchants must have communication channels for this purpose.

25. What are the consumer obligations under this law?
    Consumers must adhere to several obligations, including:

    • Legitimate Use: Only purchase goods and services through legal, authorized digital platforms.

    • Payment: Consumers are required to make timely payments for the goods and services they purchase.

    • Review of Terms: Consumers are expected to review the specifications of the goods or services, as well as the terms and conditions of the digital contract before making a purchase.

    • Responsible Returns: Consumers should not abuse their right to returns or refunds and must comply with the conditions outlined for returning goods.

26. Can a digital merchant charge for advertising and marketing campaigns?
    Digital merchants may use advertising and marketing campaigns to promote their goods or services. However, they must clearly state any associated costs and provide the consumer with the option to opt in or out of receiving such campaigns via phone calls, emails, or social media. Merchants cannot mislead consumers with false advertising, and any advertising campaigns must meet the standards set by the competent authorities.

27. What is the role of the Ministry in blocking digital platforms or applications?
    The Ministry, in coordination with the competent authorities, has the authority to block or suspend any website, platform, or smart application that violates the provisions of this law. This includes actions that breach public order, mislead consumers, or otherwise go against UAE regulations. Digital merchants whose platforms are blocked must resolve the issue and comply with the law before resuming operations.

28. What obligations do digital merchants have concerning data protection?
    Digital merchants must ensure that consumer data is protected in compliance with UAE data protection regulations. This includes:

    • Collecting and storing consumer data securely.

    • Not sharing or disclosing personal information without the consumer’s explicit consent, except where required by law.

    • Implementing security measures to protect against unauthorized access, data breaches, and cyberattacks.

    • Ensuring data integrity and providing consumers with secure ways to interact with their platforms.

29. What are the rules regarding refunds and returns for perishable goods?
    The law includes specific rules for perishable goods, such as food items or consumer goods that have a short shelf life. Consumers cannot return these goods unless they are defective or do not meet the agreed-upon description. The law also allows the Minister of Economy to issue further regulations for such items, ensuring the rights of both consumers and merchants are protected.

30. What happens if the delivery of goods is delayed?
    If the delivery of goods is delayed beyond the timeframe specified in the digital contract, and the delay renders the goods unusable or irrelevant, the consumer has the right to cancel the transaction and request a full refund. This provision protects consumers from unreasonable delays and ensures that digital merchants adhere to agreed delivery schedules.

31. How are intellectual property rights protected in digital transactions?
    Digital merchants must respect the intellectual property rights of others when selling goods or services through modern technological means. This means they cannot sell counterfeit or pirated goods, and they must ensure that their products or services do not infringe on any copyrights, trademarks, or patents. Intellectual property violations can result in penalties and the removal of products from digital platforms.

32. Can digital merchants use consumer data for marketing purposes without consent?
    No, digital merchants cannot use consumer data for marketing or advertising purposes without the explicit consent of the consumer. Under UAE data protection laws and this decree-law, consumers must have the option to agree or decline marketing communications. Additionally, consumers can opt-out of receiving such communications at any time.

33. What are the conditions for secure browsing in digital transactions?
    Digital merchants are required to ensure that their websites or platforms provide secure browsing environments. This includes meeting the technical standards for cybersecurity, protecting users from cyberattacks, and ensuring the secure transmission of data. Merchants must also have systems in place to detect and respond to potential security breaches promptly.

34. What is the business continuity plan requirement for digital merchants?
    Digital merchants must develop and implement a business continuity plan to address risks or crises that may affect their operations. This ensures that, even in cases of technical failures, cyberattacks, or other disruptions, the merchant can continue to provide services to consumers. The continuity plan must be comprehensive and include strategies for protecting consumer data and maintaining the functionality of the platform.

35. What happens if a digital merchant provides false or misleading information?
    If a digital merchant provides false or misleading information about the goods or services they offer, they are in violation of this law and may face penalties. This can include fines, suspension of their business license, or the removal of products or services from their digital platforms. Consumers affected by such practices can also file complaints and request refunds or compensation.

36. What are the conditions for the formation of a digital contract?

    
    A digital contract is formed when a digital merchant and a consumer agree on the terms and conditions of a transaction through modern technological means. The contract must include clear details about the goods or services, the price, payment terms, and any additional fees (such as for logistics). The consumer’s acceptance of these terms, whether by clicking "accept" or completing a purchase, creates a legally binding agreement.

37. What are the requirements for obtaining a license to trade through modern technological means?
    Digital merchants must obtain the necessary licenses and permits from the competent authorities before engaging in trading through modern technological means. This includes meeting all legal, regulatory, and technical requirements, such as providing secure payment options, protecting consumer data, and adhering to competition and advertising laws. Failure to obtain a proper license can result in fines and the suspension of digital activities.

38. What penalties can be imposed for failing to comply with logistics standards?
    If a digital merchant fails to meet the logistics standards, such as delivering goods on time or charging unauthorized fees, they may face administrative penalties. These penalties could include fines, orders to refund affected consumers, or even the suspension of their trading license. Merchants are required to adhere to the delivery schedules and fees outlined in the digital contract.

39. Can consumers refuse to accept advertisements from digital merchants?
    Yes, consumers have the right to refuse or opt-out of receiving advertisements or marketing campaigns from digital merchants. This can be done through settings provided on the merchant's platform, social media, email preferences, or through other communication channels. Merchants are required to respect consumer preferences and not send unsolicited marketing materials once a consumer opts out.

40. What happens if a consumer uses a good beyond checking for defects before returning it?
    If a consumer uses a product beyond the extent necessary to check for defects, they may lose the right to return the item. For example, if the consumer fully uses an electronic device or significantly alters it, their right to return the product for a refund may be forfeited unless the item was defective from the beginning. The digital contract must clearly outline the conditions for returns.