In recent years, Saudi Arabia has witnessed a rapid digital transformation across various economic sectors, with one of the most prominent being the trade sector. Transitioning from traditional markets to digital platforms, the Kingdom has made significant strides in adopting the concept of e-commerce. This evolution is complemented by the issuance of the E-commerce Law, which establishes a comprehensive legal framework to regulate this promising sector. This article sheds light on the E-commerce Law in Saudi Arabia and its significance in fostering trust, growth, and advancing the digital economy.
What is the Concept of E-commerce law in Saudi Arabia?
The E-commerce Law in Saudi Arabia defines e-commerce as an economic activity conducted entirely or partially by the service provider and the consumer through electronic means—whether electrical, electromagnetic, optical, digital, or any other similar technological means—for the purpose of selling products, providing services, advertising them, or exchanging related data.
Objectives of the E-commerce Law:
Defining the legal framework for e-commerce in the Kingdom.
Protecting consumer rights.
Regulating relationships between parties involved in e-commerce.
Encouraging the growth of e-commerce in the Kingdom.
Applicability of the Law:
The law applies to:
Service Providers within the Kingdom: Includes merchants registered in the commercial registry who engage in e-commerce.
Practitioners outside the Kingdom: Includes individuals not registered in the commercial registry but who provide products or services within the Kingdom by making them accessible to consumers.
Consumers: Individuals engaging in e-commerce to acquire products or services offered by service providers.
Service Provider’s Business Address:
For merchants: The address specified in their commercial registry.
For practitioners: The location specified in their electronic platform, defined as “an electronic platform enabling the service provider to display, sell, provide, advertise products, or exchange related data.”
In cases of multiple business locations: The location most closely associated with the contract.
If no business location exists for a natural person practitioner: Their legal residence.
Conditions for Practicing E-commerce:
According to Article 6 of the E-commerce Law, service providers must disclose the following in their electronic platform:
Their name or any distinguishing information, and address unless registered with an electronic store authentication entity.
Means of communication with them.
The name and number of the registry they are listed in, if applicable.
Commitment to protecting consumer data and using it solely for commercial transactions in compliance with applicable laws.
Providing a means for consumer complaints.
Disclosing the contract’s terms and conditions to consumers.
Obligations to Inform Consumers:
According to Article 7 of the E-commerce Law, service providers must provide a clear and comprehensive statement to consumers before finalizing a contract to promote transparency and trust. The statement should include:
Steps necessary to conclude the contract.
Information about the service provider.
Key features of the products or services subject to the contract.
The total price, including all applicable fees, taxes, or additional delivery charges, if any.
Payment, delivery, and execution arrangements.
Warranty details, if applicable.
An invoice indicating the purchase cost of each product or service, the total price, including all fees, taxes, and delivery charges, and the delivery date and location.
Consumer Data Protection Regulations:
Article 5 of the E-commerce Law specifies:
Service providers are prohibited from retaining consumer personal data or electronic communications beyond the period required for the e-commerce transaction.
They must take necessary measures to safeguard and ensure the privacy of such data during retention.
Service providers are not allowed to use consumer data or electronic communications for unauthorized purposes, disclose them to third parties (with or without compensation), unless with the consumer’s consent or as required by law.
Read also : The Saudi Labor System and its regulations
Electronic Advertising: Concept and Conditions
Electronic advertising refers to any promotion conducted through electronic means by the service provider to encourage the sale of a product or the provision of a service, either directly or indirectly.
Required Elements of Electronic Advertisements:
The name of the advertised product or service.
The name of the service provider and any distinguishing information unless registered with an electronic store authentication entity.
Means of communication with the service provider.
Other information as determined by regulations.
Prohibited Practices in Electronic Advertising:
Article 11 of the E-commerce Law prohibits:
False or misleading statements or claims that could deceive or mislead consumers directly or indirectly.
Using a logo or trademark the service provider does not own or using counterfeit marks.
Violations and Dispute Resolution:
Designated inspectors, appointed by ministerial decision, are responsible for monitoring e-commerce activities, inspecting compliance, and documenting violations.
Committees (comprising at least three members, including a legal advisor) are established by ministerial decision to handle violations and impose penalties specified in Article 18 of the law. Decisions are made by majority vote.
Penalties for Violating the E-commerce Law:
Warnings.
Fines up to SAR 1,000,000.
Temporary or permanent suspension of e-commerce activities.
Partial or complete, temporary or permanent blocking of the electronic platform in coordination with relevant authorities.
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Legal Expertise: Specializes in legal matters related to e-commerce, ensuring compliance with all regulations.
Comprehensive Support: Assists with store registration, drafting terms and conditions, and protecting customer data.
Swift and Secure Solutions: Provides prompt and secure legal procedures.
Rights Protection: Safeguards your commercial rights and ensures the legal security of your store.
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