Abu Dhabi Firms Face Closure, Fines for Illegal Social Media Contracts

Police in Abu Dhabi have recently dispatched a serious warning to all the merchants and companies with license to operate in the emirate regarding cooperation with social media personalities. Many stores were shut down or fined between Dh 3,000 and Dh 10,000 by the Department of Economic Development (ADDED), as per regulation.

In a circular released on June 20, ADDED outlined three critical areas of compliance:

Licensing for Influencers: Moreover, the involvement of social media influencers requires the department’s license to market services through a website.

Permits for Economic Establishments:

ADDED requires a permit for any advertisement or marketing action or any promotion by any organization or even individual whether profit oriented or not.

Valid Business Licenses:

Because social networking sites are included under the Media Business License, businesses in this context must verify that ADDED issued them a valid license before entering into a contract with influencers and social networking sites. These measures are in response to the 2018 rules by the National Media Council (NMC) thatály for social media influencers to obtain a media license if they are to benefit financially from brand promotions. A reminder of these regulations was recently given in June 2019 by the SCA indicating that anyone who continues to post sponsored content without a license will be subjected to a fine of Dh5000. The NMC also links the enforcement of legal measure against the usage of Social networks and other online communities to track unlawful activities.

Specifically, the popularity of influences on Instagram and TikTok has developed as a new form of advertising where famous people demand large amounts of money for promoting brands and products. However, such provisions do not apply to regular social media users who limit themselves to posting unscripted testimonials without any monetary reward.

It also applies to the news websites, the electronic publishing outlets, and the commercial activities that are carried out through the Social Media within the UAE in which it is unlawful to perform any of those mentioned activities without NMC license. ESMA regulations/guidelines were designed for social media personalities selling brands and businesses for monetary compensation, and to meet the set requirements, influencers/botters must obtain a media license.