Expanding into new markets comes with a myriad of challenges and companies must evaluate and consider financial plans, marketing strategies, operational issues, and related legal implications in connection with such expansion.
At this stage, many businesses offering goods or services through mobile applications (apps) ask their legal counsel common questions, such as:
“Can we provide it to customers in new regions? [for example, the United Arab Emirates] With the same app you already use in other jurisdictions [typically, in the European Union or the United States] Or do they need to be changed? Do they need to change the terms of use of the app as well? If so, how would you change it?”
No categorical answer can be given without first assessing the situation in each individual case. Below are some quick questions that digital companies should ask and answer when considering expanding into new markets:
Questions to prompt analysis
First, Basic questions:
- What type of business do you run?
- What products or services are offered? (For example, does the app act as a marketplace for third-party products or services, a platform for selling your own goods, or a platform for offering your own services?)
- Are there in-app purchases?
- What features does the app provide?
- Does the app include a chat feature that allows users to communicate?
Answers to these gating questions are essential for identifying sector-specific regulations as well as e-commerce regulations (e.g. health and safety regulations if the app offers health-related services or products, or communications rules regarding communication registration and data transfer if the app includes messaging functionality).
Notably, UAE law stipulates that all invoices for products or services must be in Arabic, with additional languages being optional. E-commerce companies in the UAE must provide customers and authorities with the name, legal status, address, licensing authority, and sufficient Arabic information about the product or service (such as specifications, terms and conditions, payment, warranties, etc.).
- What methods are used to interact with customers? Does the app clearly disclose the applicable terms and conditions? Are these terms clear and comprehensive?
- Are there any loyalty programs? What are the terms and benefits of such programs?
- Are the terms of in-app purchases and subscriptions clearly explained and transparent to customers?
- How do you handle refunds, cancellations and customer complaints?
The above questions are necessary to evaluate your current practices and ensure you are compliant with consumer protection laws in new markets. For example, in the UAE, it is mandatory to provide clear, accurate and comprehensive terms and conditions in Arabic (providing terms and conditions in both English and Arabic is permitted). Additionally, all information must be transparent and not misleading, so any clauses that are detrimental to customers will be considered invalid.
Data Protection and Security
As authorities become more interested, another set of related questions becomes crucial. Protection and security of personal data.
- What personal data does the app collect? How is this data processed and where is it stored? Is there a risk that minors provide their personal data?
- What are the existing and planned data flows?
- How are your personal data protected? What (1) organizational and technical measures and (2) security and safety measures are in place?
- Are users informed of their data rights, and can they easily exercise those rights (e.g. access, correction, deletion)?
Considering these questions will help you understand both your current (anticipated) data processing activities and the data protection requirements that apply, as well as the protective measures that need to be implemented.
For example, while some jurisdictions allow companies to rely on legitimate interests to collect and process their customers’ personal data, some jurisdictions (e.g., the UAE or Oman) do not recognize such a legal basis. Therefore, to enter markets such as the UAE and Oman, we will need to amend our existing processing practices and obtain customer consent, which will be displayed to customers during the account registration process on our app.
Content and Intellectual Property
Another important question is: Content and Intellectual Property Provided and Used by the App.
- Is the app’s materials and content properly licensed for use in new markets?
- Have any relevant trademarks been registered to protect the company’s brand?
Due to the territorial nature of trademarks (i.e., trademark protection is limited to the country in which it is registered), it is important to conduct a preliminary trademark search and file a trademark application before entering a new market.
- Does the app’s content comply with local regulations regarding hate speech and other restricted content?
Expanding your business or products into new markets requires thorough consideration of various legal issues. Addressing these issues before entering a new market can help your company better navigate the complexities of market entry and ensure compliance with local laws and regulations.
