Etisalat
The corporation called Etisalat is government-owned and operates as a telecommunications service provider in the UAE. Law No. 1 of 1991 (The Etisalat Law) established the corporation on 24 March 1991, which grants Etisalat independent authority, and also provides Etisalat with the exclusivity for telecommunications and electronic equipment and work. The law prohibits competition with Etisalat and provides terms of services for telephones, Internet or otherwise, and also prohibits the import, installation and use of any equipment without Etisalat's approval. Accordingly, it would be rather difficult to import any equipment to be used in telecommunication and Internet services or to provide a satellite or land line service without the approval of Etisalat. Therefore it is not possible to sell, install, import or provide services to the public unless Etisalat's approval is first obtained. Considering the Etisalat Law is a federal law which supercedes any local laws, under the UAE constitution it appears very important that in order for any e-commerce or e-business in general to be successful in the UAE, and to avoid violation of the law, Etisalat's approval must be obtained. The Etisalat law provides a fine of Dhs.10,000/- or imprisonment of up to six months in case of violation.

The UAE Penal Code also provides, under Article No. 380, a punishment for anyone who misuses Etisalat's telecommunication cables or lines or services or steals some of their services and competes with them in the services that they provide to the public. However, this general article intends to protect Etisalat's services from being installed by the public or other traders. It is yet to be seen whether these articles can also apply to other entities who will provide services independently from Etisalat. Most likely Etisalat intends to stretch this article to apply to those who would provide competition to their services without their license.

In 2000, the Dubai Prosecution charged a young Briton expatriate of 'hacking' or misusing the Internet service for illegal purposes under Article 46 (b) of the Etisalat Law. He has also been charged under Article No. 380 of the Penal Code. The prosecution based its accusations on a Dubai Police Criminal Laboratory report, and the alleged hacker's confession. The prosecution claims that on June 21, 2000 the accused misused the Internet service to decipher the passwords of a number of Etisalat's managers through which he was able to enter sites forbidden to network users. Once inside the network, he is alleged to have opened and copied some employee's emails. He is alleged to have entered Etisalat's network more than once. The alleged hacker's home was raided and his laptop was confiscated. He allegedly confessed to police and explained to Etisalat engineers how he entered the system, and revealed what programs he had used. According to statements published in the local press, he used hacking tools which are easily downloaded from the Internet to break into Etisalat's system. The crime of penetrating into Etisalat's network, according to the Etisalat Law, carries a penalty of six months in prison and a Dhs10,000 fine.

In December 2001, the Dubai Court of Cassation upheld an Appeal Court ruling issued against the 22-year old Briton, confirming an AED10,000 fine imposed on him by the Court. The Dubai Appeal Court in the first week of October 2001 adjusted a lower court ruling issued against the Briton, finding him guilty on both charges of opening private emails of Etisalat employees and misusing Etisalat services through unauthorized penetration of its Internet system. The Dubai Misdemeanors Court had originally found the Briton not guilty on the charge of opening private emails of Etisalat employees and fined him AED10,000 on the second charge of misusing Etisalat services through unauthorized access. The Appeal Court, however, while upholding the AED10,000 fine, convicted him on both the first and the second charge.

In another precedent-setting case for the UAE, an IT company owner and a member of his staff in Dubai were jailed for three months for receiving international telephone calls through the Internet and forwarding them to people in the UAE as local calls. In 2001, the Dubai Court of First Instance ruled that the company had illegally bypassed Etisalat's systems and deprived it of its share of revenues from calls from the United States. Along with the jail terms, the two were also ordered to pay fines to Etisalat amounting to Dhs10,000 as temporary compensation and Dhs1,000 in legal fees. Etisalat's lawyer issued a statement that the court sentence is just and sends a warning to anyone who may think of conspiring against the country's economy and the welfare of its institutions. The company had been using 15 telephone lines and a single line of 128 KB capacity connected to the Internet to enable the transfer of calls from the U.S. to people in the UAE. The convicted trader admitted that he obtained a commercial license at the request of a U.S.-based company, and rented the flat and telephone lines for the company. The American company supplied the local company with integrated network equipment which enabled the transfer of sounds into a digital signal and vice versa, and a hub and router to enable the receipt and transfer of calls via the Internet. A subscriber in the U.S. would contact the American company and that company would then route the call through the Internet to the local company. The local company would then transfer the call to Etisalat's network with calls charged to the company at local rates.

Whether or not Etisalat should retain its exclusivity is an ongoing debate between those in favor and those against opening up the telecom sector to competition. With respect to the demand for communication technology products and services, the UAE population is among the most demanding in the region.