The Administrative Court ruled Sunday that the minister’s authority to regulate digital commerce services does not extend to establishing punitive administrative penalties absent clear statutory empowerment, annulling Article 15 in the lawsuit filed by Talabat. Court records show the contested provision had created an integrated sanctions regime ranging from warnings to temporary and permanent blocks as well as full license revocation. The judgment stressed that the underlying digital commerce law already designated specific penalties and the competent bodies to apply them, rendering the ministerial addition invalid.
According to the court’s detailed reasoning, Ministerial Decision 109 of 2026 issued on July 8 and published in the official gazette later that month had incorporated the regulations to organize intermediary electronic platforms for product display, ordering and delivery to consumers. Article 15 specifically introduced the graduated penalties that the court viewed as exceeding the minister’s delegated powers under Decree-Law No. 10 of 2026. This decision carries consequential effects that could reshape enforcement approaches across the sector while leaving core licensing and transparency obligations intact.
The regulations replaced an earlier narrower framework focused only on restaurant food delivery and introduced measures such as commission caps, pricing disclosure requirements and consumer protection standards, according to accounts in Al-Seyassah newspaper. Industry assessments described the 2026 rules as the first comprehensive Gulf legislation of its kind aimed at fostering fair competition and shielding small merchants from disproportionate platform fees. Kuwait’s e-commerce activity has expanded markedly since the pandemic, with platforms required to adjust licensing classifications to an internationally recognized code for digital mediation services.
Talabat brought the challenge as operators navigated mandatory updates to align existing contracts and activities with the new rules by early September, court filings indicate. The parent decree-law had set criminal penalties including fines and potential imprisonment for certain violations such as providing false data or breaching data security obligations, a structure the court cited to limit additional ministerial sanctions. Legal observers following digital regulation cases noted that the ruling underscores the need for legislative clarity when executive bodies seek to impose enforcement mechanisms.
Further details from the judgment clarified that while the minister may issue organizational decisions to implement the law, creating a standalone penalty ladder falls outside that scope and must instead follow the distribution of authority spelled out by lawmakers. The decision referenced how the primary legislation assigns roles to both judicial and designated administrative entities for handling infractions. Platforms must nevertheless continue complying with remaining provisions on contract terms, complaint mechanisms, data retention and fee transparency to avoid other legal exposure.
The outcome arrives against a backdrop of robust sector growth in which multiple operators handle food, grocery and pharmacy deliveries under heightened consumer expectations for service quality and pricing clarity, according to commerce ministry statements from earlier in the year. Previous rules had frozen platform commissions for three years to aid merchant planning and prohibited certain restrictive practices, elements that remain unaffected by the annulment. Authorities may now consider legislative adjustments to address any resulting gaps in administrative oversight while the court decision stands.
