What You Need to Know About the New E-Commerce Law in KSA:
Concerning its various advantages and benefits, online shopping has become a new trend. With the proliferation of new technologies and the internet’s support, people are no longer limited to their local products/shops and got somehow connected to the whole world. As a result, purchasers got wider options and started purchasing items worldwide by simply clicking a button.
We live in the E-Commerce business era. Online shopping will keep evolving day by day, considering the considerable number of different types of businesses that started providing their services online.
With this kind of evolvement, we’ve been seeing many countries executing new E-Commerce rules and regulations. The purpose of such rules and regulations is to protect online customers by providing them with a safe and accurate online shopping experience.
The Kingdom of Saudi Arabia (KSA) is one of these countries. In this article, we will provide an overview of the new E-Commerce Law (Royal Decree No. M/126 dated 07/11/1440H; July 10th, 2019) that was established by the government of KSA on July 10th, 2019, and came into effect in late October 2019.
The first requirement anticipated by this law is the minimum number of details the e-commerce service provider must display on its website. E-stores must essentially display the following information:
- Information about the e-commerce service provider, including its name, its address, and, if applicable, its commercial registration number;
- Information related to the goods or the services provided by the e-store, in other words, its basic characteristics;
- Information on any warranties;
- Information related to the total price, including all the fees, the taxes, or any other additional amounts such as delivery charge, for example; and
- Information related to the procedure by which the contract will be concluded, along with additional information related to the payment and delivery/performance
Besides, when an e-commerce service provider is practicing a regulated activity or profession, such service provider is required to provide additional information, such as the identity of the relevant regulator, the license or the permit, details of that regulator.
Moreover, following this new law, E-Commerce service providers must provide the customer with an invoice indicating the total cost of the purchased goods or services, including the fees, the taxes, and any additional cost related to the delivery any. The invoice should also indicate the date and time of delivery and any other detail required to be compliant with other rules and regulations such as tax law.
Another aspect covered by this law is the customer’s right to correct errors and terminate contracts in an e-commerce transaction. This can be executed according to scenario number one: the right to terminate “without cause” and scenario number two: the right to terminate in the event of a delay in delivering the goods or services. As for number one, customers have the right to terminate within seven days as of the date of delivery of the goods. This right to terminate is without prejudice to any statutory or contractual warranties. It is subject to the condition that the customer didn’t use the goods or benefitted from the services. However, some exceptions limit this, especially if the transaction relates to services for accommodation, transportation, catering, or goods that are damaged due to the customer’s acts or inaction. As for scenario number two, customers can terminate if the delivery of the goods or the services is delayed by more than fifteen days from the agreed date of delivery. This right does not apply in the event of a force majeure or when the parties have agreed on different delivery timeline. It is required by this law as well that e-commerce service providers must notify customers of anticipated delays or difficulties that may affect delivery or performance.
Also, there’s no doubt that this law requires all e-commerce service providers to take the necessary measures to protect customers’ data and electronic communications. This matter is also subject to other legal requirements where e-commerce service providers must retain data for a specified period. They shall not use such data for unauthorized purposes and obtain the customer’s consent to disclose such data to any third party.
This law applies to all e-commerce service providers operating inside KSA, whether they were registered in KSA having a commercial license or not registered in KSA but offering their goods or services inside the territories of KSA. Here, it’s essential to know that this law applies to the “Business to Customer” relationship and the “Business to Business” relationship. And of course, if you’re operating as an e-commerce service provider and not complying with this new law, you will be subject to penalties, such as temporary or permanent suspension of your business and/or a fine of not more than 1,000,000 Saudi Arabia Riyal.
Each country provides different rules and regulations when it comes to e-commerce businesses. You can get in touch with a lawyer by visiting lexyom.com and booking an online consultation to provide you with further details about such rules and regulations, whether in KSA or any other jurisdiction.