What You Need to Know About the E-Commerce Law in KSA

E-commerce transformed the retail industry to better respond to the modern-day customer’s needs. Throughout the years, e-commerce witnessed considerable technology developments, enhanced customization, and improved return policies, especially after the Covid-19 pandemic hit the world and forced people to stay home. As a result, purchasers have broader options and can purchase items from around the globe with a simple click of a button.

Many governments drafted new E-commerce rules and regulations to protect online shoppers by providing a safe and regulated online shopping experience.

The Kingdom of Saudi Arabia (KSA) is one of these countries. On July 10th, 2019, the Saudi government enacted a new E-Commerce Law (Royal Decree No. M/126) that came into effect in late October 2019 (the E-Commerce Law).

What are the main provisions introduced by the E-Commerce Law?

Scope of Application:

The E-Commerce Law applies to all e-commerce service providers operating within the KSA, whether they are registered entities with a commercial license in the KSA or not. Offering goods or services online inside the KSA territories by itself requires a business to comply with the E-Commerce Law.

The E-Commerce Law equally applies to the “Business to Customer” (B2C) and the “Business to Business” (B2B) relationships. Not complying with the E-Commerce Law will subject the business to penalties, including temporary or permanent suspension and/or a fine of not more than 1,000,000 Saudi Arabia Riyal.

Details Displayed on the Website:

One of the main requirements imposed by the E-Commerce Law is the minimum number of details the e-commerce service provider should display on its website. Practically, e-stores should demonstrate the following information:

Information about the e-commerce service provider, including its name, address, and, if applicable, commercial registration number;
Information related to the basic characteristics of the goods or services provided by the e-store;
Information on any available warranties;
Information related to the total price, including all the fees, taxes, and any other additional amounts such as delivery charges, for example; and
Information related to the procedure by which the contract will be concluded between the seller and the buyer, along with additional information related to the service’s payment procedure and delivery/performance.

If an e-commerce service provider is practicing a regulated activity or profession, it also needs to provide additional information, such as the identity of the relevant regulator and the license or the permit.

Invoice Issuance:

Under the E-commerce Law, service providers are required to provide customers 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, if any. The invoice should mention the date and the time of delivery and any other details required to comply with other tax and accounting rules and regulations.

Right to Terminate the E-commerce Transaction:

Another aspect covered by the E-commerce Law is the customer’s right to correct errors and terminate an e-commerce transaction.

A customer can terminate the contract “without cause” within seven days as of the date of delivery of the goods/services. 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, there are exceptions to this right. For example, services related to accommodation, transportation, or catering cannot be terminated without cause, and goods damaged due to the customer’s acts or inactions cannot be returned.

On the other hand, a customer can terminate the e-commerce transaction in the event of a delay in delivering the goods or services by more than fifteen (15) days from the agreed date of delivery. This right does not apply in case of a force majeure or if the parties agreed on a different delivery timeline. In all cases, e-commerce service providers should notify customers of anticipated delays or difficulties that may affect delivery or performance.

Protection of Personal Data:

The E-commerce Law requires all e-commerce service providers to take the necessary measures to protect a customer’s personal data and electronic communications. E-commerce service providers should also retain data for a specified period and not use it for unauthorized purposes. A customer’s consent is required to disclose such data to any third party.

Conclusion:

So far, the e-commerce industry has made over 2 trillion US dollars in sales worldwide, which shows that e-commerce is here to stay. If you are still considering whether it’s the time for you to move your business online, the answer is definitely “yes.” Get in touch with a lawyer by visiting lexyom.com and book an online consultation to learn about the latest e-commerce trends, rules, and regulations, whether in the KSA or any other jurisdiction.