New E-Commerce Law in Saudi Arabia

Saudi Arabia recently issued its new e-commerce law. The E-Commerce Law, which will be administered by the Ministry of Commerce & Investment, comes into effect in late October 2019, 90 days following its publication in the Official Gazette on 24 July 2019. The associated Regulations are expected to follow shortly thereafter.

The Law focuses primarily on customer-protection related considerations, both in a B2C context and in a B2B context. It applies not only to e-commerce service providers who are merchants/traders registered in the Saudi Commercial Register, but also to other e-commerce practitioners – both in the Kingdom and elsewhere – who are not registered in the local Commercial Register. Specifically, e-commerce practitioners who are located outside the Kingdom, but who offer goods and services to customers based in the Kingdom, are subject to the Law.

• Minimum details: The Law sets-out minimum details that an e-store must display to customers. It requires e-commerce service providers to provide customers with clear contractual terms, and specifies minimum information that must be included. It also sets-out minimum requirements for invoices.
• Advertising: The Law provides that digital advertising by e-commerce service providers constitutes supplementary terms to the contract that are binding on the parties. It will be interesting to see what this means in practice.
• Rights to terminate: The Law specifies two general scenarios in which customers have a right to terminate an e-commerce contract. These can be understood broadly as a ‘cooling off period’ right to terminate; and a right to terminate in the event of a delay in delivery of the goods or services.
• Personal data protection: The Law contains general obligations with regard to the privacy of customer data.
• Enforcement and penalties: The Law permits MOCI to block access to an e-store in the event of violation of the Law or Regulations. Besides blocking access to the e-store, a variety of other penalties are available, including warnings, public notices, suspension of licences and fines.

The Law provides clarity for e-commerce service providers, although further clarity should follow when the Regulations are issued. In the meantime, e-commerce operators making goods and services available to customers in the Kingdom should prepare to review their customer terms and conditions and policies to ensure that they fit within the expectations set out in the Law.

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Key Contacts

Nick O’Connell
Partner, Head of TMT – KSA
n.oconnell@tamimi.com

Bandar Al Hamidani
Partner, Corporate Commercial
b.alhamidani@tamimi.com