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New Consumer Protection Law 181/2018

On September 18, 2018, President Abdel Fatah el Sisi ratified the new Consumer Protection Law (No. 181/2018), which had been approved by parliament in April of this year. The law is to be implemented in three months, with the executive regulations due to be produced within three months. Its key attributes are protecting consumers from unsafe products and implementing the rights of citizens to allow them to know the details of the services they use, or the goods they consume.

The Consumer Protection Law starts by setting out some relevant definitions:

  1. 1. Consumer: all natural and legal persons to whom a product is offered
  2. 2. Persons: natural persons and legal entities, including all types of companies and economic entities, associations, unions, organizations, enterprises, financial groupings or grouping of individuals however incorporated
  3. 3. Products: goods and services offered by public or private law persons, including second-hand commodities offered by suppliers, but now excluding financial and monetary services as per Law No. 2003/88 Promulgating The Law of the Central Bank, the Banking Sector and Money, as well as Law No. 10/2009 for the Regulation of Non-Banking Financial Markets and Instruments

The new Consumer Protection law cancels the previous one, No. 67/2006, and replaces its provisions with those more protective of consumers’. Indeed, the old law can be criticized for not providing consumers with enough protection.

In its emphasis on providing consumers with more information, it obligates businesses to inform the consumer of all information relevant to the product, including its source and main features in a clear manner. The business will otherwise face a fine between 10,000 EGP and 50,000 EGP. The seller must also make clear their information, including their address, contract information, and trademark. In fact, all messages aimed at the consumer, including advertisements, data, information, bills and receipts must be written either in Arabic or in Arabic and another language. Moreover, a fine no lower than 50,000 EGP but no higher than 1m EGP is imposed for creating misleading advertisements. Business will also face the same fine for providing products, or advertising for them in a way that incites racism or religious hatred.

Businesses must also provide invoices to consumers for goods and services, in addition to providing spare parts for the products they sell, or made available to consumers even after their warranty period has ended.
The new Consumer Protection law also creates a list (Article 9) warning business of providing misleading information as to the nature or components of the goods, the source of the goods as well as their production and expiry dates, the relevant trademarks, and the producer of the goods.

Perhaps two of the most important reforms that have come with this law are those concerning real estate. Article 15 stipulates against two actions that were previously harmful to consumers. Firstly, it prohibits the advertising or the contracting of sale of property or land before obtaining the relevant license (as per Law No. 119/2008 on Unified Building). This is to prevent agents or owners from selling land based on a yet-to-be-imposed plans or blueprints. Secondly, the Consumer Protection law now prohibits the common practice of real estate agencies, wherein they often stipulated in their contracts with new land owners that they were to receive a percentage of any further sale of the land or property. This percentage often went up to 10%, and was a way for agencies to continue making money off of consumers, even after they had already purchased the land. Any clause stipulating for such behavior will be considered void.

The new Consumer Protection law contains a number of provisions concerning e-commerce. Article 36 stipulates that the business must, before carrying out the contract, provide the consumer information regarding the business itself, the product, the warranty, the post-sale services, and the delivery date and location.

The Consumer Protection law also holds a section concerning the Consumer Protection Agency, identifying it as the body responsible for implementing this law and any decisions resulting from it. Offices of the agency must be set up in all governorates. The agency is responsible for placing plans and programs aimed at protecting the consumer, encouraging a culture of consumer protection, acting on feedback and complaints, and preparing studies on the matter. The use of the agency has indeed been on the rise, and most notably, last year it had received 38,000 complaints, as opposed to 13,000 in 2011.

The Executive Regulations of the Consumer Protection law will be issued within three months. The law makes it clear that the economic courts will be responsible for adjudicating the relevant civil and commercial disputes, and the administrative courts will adjudicate over the administrative disputes resulting from implementing the new law.
The new law has indeed met its aims of protecting consumers through ensuring that they obtain all the information and rights regarding the goods and services easily, further implementing this by imposing high fines on businesses should they fail to do so.

The Consumer Protection law is relevant and up-to-date both in how it addresses e-commerce and in its realization of the issues surrounding real estate, and fixes them, effectively protecting the consumer from possible deception or abuse by real estate agencies. The Consumer Protection Authority serves as a body supportive of the law and its citizens, acting as a reference point for consumers. Through our expertise, we truly find this new law to be a positive step, beneficial for consumers.

Written By

Andersen Legal Team

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