A new e-commerce law announced on Monday by Sheikh Mohammed bin Rashid, Prime Minister and Ruler of Dubai, will help boost the UAE's digital economy and contribute to the country's economic competitiveness, analysts have said.
Sheikh Mohammed, who led a meeting of the UAE Cabinet, said that 11 new laws – including the e-commerce law – had been adopted as part of the continuous development of the federal legislative system.
“The aim is to strengthen the legislative environment in the UAE and promote social stability, economic growth and better quality of life,” he said.
In recent years, the UAE’s e-commerce sector has grown considerably.
The UAE’s e-commerce market is expected to reach $9.2 billion by 2025, according to the Dubai Chamber of Commerce, while the sector’s share of total retail sales in the Emirates is projected to reach 12.6 per cent by the same year, propelled by the country's high internet and smartphone penetration rate.
Here is what law firms and consultants are saying about the new e-commerce law and its implications.
BSA
The UAE’s e-commerce law has been primed for a revamp for some time now, as the complexity of technology and the usage of e-commerce platforms has grown tremendously over the past decade.
“This update will benefit both consumers and platforms who will be able to benefit from clearer guidelines and will definitely set the groundwork for future development of the sector in the coming decade,” said Nadim Bardawil, partner at BSA, a law firm.
Consumers will be the first to benefit “as we expect to see clearer regulations surrounding how e-commerce platforms can interact with end users”, he added.
In the long-term, the entire industry will benefit as well as all stakeholders that operate at different levels of the e-commerce ecosystem, including wholesalers, importers and technology service providers, according to Mr Bardawil.
“While we are not sure of the exact changes that will be enacted, we expect to see some new regulations addressing advertising and marketing for e-commerce platforms as well as clearer guidelines for terms and conditions governing the operations of e-commerce platforms,” he said.
“Any legislation improvement is most certainly going to draw a positive impact from a competitiveness perspective. The UAE is already a leader in this sector in comparison to other countries and we expect these changes to raise the bar globally.”
Stephenson Harwood Middle East
The move is the latest in a series of legislative measures designed to enhance the UAE's regional and global competitiveness, according to Sandeep Dhama, partner at law firm Stephenson Harwood Middle East.
“We look forward to helping our clients take advantage of these positive developments,” he said.
Clifford Chance
“It's very encouraging to see the UAE continuing to pioneer strong regulatory frameworks across all its sectors, including in the area of e-commerce,” said Jack Hardman, partner at Clifford Chance.
“We are fully confident that the Emirates will continue to develop a regulatory regime in line with global best practice to support and secure both development and legal protections for the e-commerce sector.”
DVS Management Consultancy
The general implications of a new e-commerce law would revolve around consumer protection, business compliance, taxation, data protection, intellectual property rights, cyber security and the overall legal framework for online transactions, according to Nabeel Ahmed, partner at DVS Management Consultancy.
The existing consumer law covers only a very minuscule aspect of e-commerce, he said.
“The e-commerce sector has grown by leaps and bounds in the recent past. This gives rise to its own set of opportunities and challenges like data protection and privacy,” Mr Ahmed said.
The UAE's new law catering to the e-commerce sector, coupled with its Fourth Industrial Revolution strategy of utilising blockchain technologies for financial transactions, will “usher in a conducive environment that will focus on growth prosperity and security”.
“The exact impact of the new law will depend on the specific provisions of the law and the broader legal context in which it is implemented,” Mr Ahmed said.
He added that if the “law entails consumer protection, then business compliances will be an added layer that adds to the cost for companies, however [it would be] working to the advantage of the consumers”.
But what remains to be seen is if the e-commerce players will be “differentiated from other players in the market, thereby unlevelling the playing field”, he said.
Karm Legal
Calling the move promising, Kokila Alagh, founder of law firm Karm Legal, said she would be interested to see how these new laws will build on the “traditional elements of e commerce (mainly domain, copyright, privacy, electronic contracting, social media, marketing, payment processing, etc), and at the same time, also address innovative segments like Web3, virtual assets and AI”.
“These developments will further boost the evolving ecosystem of the UAE. Karm Legal has been actively advising clients in the e-commerce sector across the region, and is keen to further support the growing UAE tech initiatives,” she said.
Addleshaw Goddard Middle East
The new law forms part of the UAE government's broader, ongoing agenda, not only to reform the UAE's legal framework, but also to proactively support the country's ambitious digital transformation journey, according to Kellie Blyth, partner at law firm Addleshaw Goddard Middle East.
“It will complement other laws and regulations adopted recently on topics such as electronic contracting and digital trust services, consumer protection and data protection, which are together designed to provide greater certainty to businesses as they innovate and to protect individuals from the risks of the digital age,” she said.
