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Profiting From Crisis: Legal and Moral Perspectives on Price Gouging in the UAE

Is price gouging permissible, particularly in light of Federal Law No. 15 of 2022 on consumer protection?

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Shulka S. Chavan

Published on April 25, 2024, 10:35:49

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price gouging, uae floods, hotels in uae, price gouging in uae, hotels in dubai

‘One Room for Dh8,000 a Night: Some UAE Hotels Raise Prices as Floods Leave Residents Stranded’; ‘Dh600 Towing Cost: Motorists Face Increased Prices After Abandoning Cars Amid Floods’ – These were among the recent headlines in UAE media following the floods that wreaked havoc across the UAE.

While the recent catastrophe saw people unite to support those in distress and the government introduce measures on a war footing, some took advantage of the crisis situation to make a quick profit.

In the aftermath of the flash floods in the UAE, a contentious issue has emerged – price gouging by some businesses, especially hotels. As residents grappled with the natural disaster, reports surfaced of exorbitant room rates, leaving many stranded and questioning the morality and legality of such actions.

What are the moral and legal dimensions of price gouging in the UAE, particularly in light of Federal Law No. 15 of 2022 on consumer protection?

Price gouging refers to the practice of raising prices excessively during times of high demand or emergency situations, often to exploit consumers' urgent needs. In the context of the recent floods, reports have highlighted instances of hotels charging exorbitant rates for accommodation, with some rooms reportedly priced as high as Dh8,000 per night.

From a moral standpoint, price gouging raises ethical concerns about fairness, exploitation and social responsibility. In times of crisis, such as natural disasters, communities rely on businesses to act ethically and prioritise the well-being of consumers over profit maximisation.

Price gouging undermines trust and solidarity within society, as it exacerbates the vulnerability of those already facing hardship.

Legal Framework

In the UAE, Federal Law No. 15 of 2022 on consumer protection serves as a cornerstone for regulating business practices and protecting consumers' rights. The law prohibits unfair commercial practices that harm consumers, including price manipulation and exploitation.

Article 8 of the law explicitly prohibits price gouging, stating that businesses must not exploit consumers' circumstances to charge prices significantly higher than the market value of goods or services.

Enforcement and Penalties

Under Federal Law No. 15 of 2022, businesses found guilty of price gouging can face severe penalties, including fines, suspension of activities and even closure of establishments. The law empowers regulatory authorities to investigate complaints of price gouging and take appropriate enforcement actions to ensure compliance with consumer protection regulations.

Call for Accountability

In light of the reported instances of price gouging by hotels in the wake of the floods, there is a growing call for accountability and transparency in the hospitality sector. Consumers, advocacy groups and regulatory authorities are urging business establishments to adhere to ethical pricing practices and comply with legal obligations to protect consumers' rights.

Price gouging in the UAE, particularly in the aftermath of natural disasters, raises complex moral and legal questions. While businesses have a duty to operate profitably, they must also uphold ethical standards and respect consumers' rights.

As the UAE continues to prioritise consumer protection and fair business practices, it is imperative for all stakeholders to work together to combat price gouging and promote a fair and just marketplace for all.

For any enquiries or information, contact ask@tlr.ae or call us on +971 52 644 3004Follow The Law Reporters on WhatsApp Channels.

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