Jail, closure, fines for e-commerce violations

KUWAIT CITY, Feb 23: Decree Law No. 10/2026 was issued on Sunday for regulating the digital commerce sector, reports Al-Seyassah daily. The decree aligns with global developments and ensures a balance between encouraging innovation and protecting consumers while guaranteeing transparency and fairness in transactions. It establishes a legislative framework to regulate the digital commerce sector in the State of Kuwait, enhancing trust in digital transactions, creating a secure and competitive environment that fosters investment and innovation, and contributing to the goals of Kuwait’s development vision, New Kuwait 2035. The decree also takes into account laws related to electronic transactions, consumer protection, copyright and neighboring rights, cybersecurity, and competition protection. The decree comprises 45 articles in 10 chapters, covering comprehensive provisions related to the regulatory, procedural, supervisory, and punitive aspects of the digital commerce sector.
It assigns the Ministry of Commerce and Industry the responsibility of regulating the sector and overseeing the implementation of the decree-law, including its regulations and decisions. According to the decree, no person may operate in the digital commerce sector without first registering with the Ministry of Commerce and Industry. The decree also specifies the information that providers of products or services must disclose in their online stores.
It grants consumers the right to cancel or amend any part of a contract where an error occurred, in accordance with specific regulations, if a mistake was made while using the electronic contracting system of a product or service provider. The decree also allows consumers to withdraw from a contract within 14 days of receiving a product, or to exchange or return it for a full refund using the original payment method or another agreed-upon method, at no additional cost. Products must be returned in the same condition as when purchased, except in specified cases.
The decree further regulates advertising and promotion in digital commerce, given its direct impact on trust in online transactions. Advertisements must include clear information about the product or service provider, its price, specifications, contact details, and any other information required by the executive regulations. The decree prohibits including any false, misleading, or illegal information in advertisements. It also requires product and service providers to comply with cybersecurity standards applicable within the State of Kuwait.
Service providers are obligated to regularly update their data protection systems to address new cyber threats. The decree mandates that product and service providers work only with electronic payment service providers licensed by the Central Bank of Kuwait (CBK). It also prohibits charging additional fees for using electronic payment methods without prior approval from the Central Bank of Kuwait. Two specialized committees have been established under the decree. They are: - The Violations Committee, which is responsible for reviewing violations and deciding whether to refer, close, or approve settlements related to them. - The Dispute Resolution Committee, which handles disputes between product or service providers and consumers, imposes penalties outlined in the Financial Regulations, and refers criminally punishable offenses to the Public Prosecution.
According to the decree, the decisions of these committees are final and enforceable, as detailed in the implementing regulations. The decree-law also includes several penal provisions, stipulating imprisonment or fines for anyone who violates the core articles, with the possibility of doubling the penalty in cases of repeated violations. The decree authorizes the confiscation of tools or assets used in committing offenses, as well as the closure of the offending store once a violation is confirmed. It allows for reconciliation in the crimes specified, under certain controls, to provide procedural flexibility and reduce the burden on the judiciary. The decree-law grants certain ministry employees the authority of judicial officers to investigate the crimes and violations stipulated in its provisions. It also mandates the Ministry of Commerce and Industry to publish its implementing regulations and decisions in the official gazette and on the ministry’s website. The decree-law will take effect six months after its publication in the official gazette, giving the ministry time to prepare for its implementation.