Saudi strengthens eCommerce law to ensure compliance

By Rahul Vaimal, Associate Editor
  • Follow author on
eCommerce Image
Representational Image

As part of the kingdom’s efforts to tighten its e-commerce laws, e-stores owners in Saudi Arabia have been advised to review and upgrade their systems to protect the data of customers and to implement a privacy policy if they don’t have one on their website already.

The latest data from the Ministry of Commerce revealed that out of the 75,000 online stores registered on ‘Maarouf’ only 44 shops have complied with it to date.

‘Maarouf’ is the Saudi e-commerce service that guarantees its users’ data confidentiality.

The officials of the ministry added that fines were imposed on offenders while five other e-stores were shut down for breaching e-commerce regulations.

The owners have to register their e-store on the commercial register and make sure they hold the appropriate licence from the ministry.

They will also need to provide an option to “unsubscribe,” update their terms and invoices as per the regulations of the kingdom.

The law aims to improve consumer trust in e-commerce transactions. It has provisions designed to protect consumers from fraud and information misrepresentation. Clear emphasis is placed on the protection of personal data, and the law imposes a legal obligation on the service provider to maintain privacy.

There is also a provision that consumers can return goods or terminate a service contract obtained through an e-commerce channel within seven days of receipt, if they have not used the goods or services.

There are some situations under which this provision is not applicable including when the product becomes defective due to poor consumer care.

Consumers are also entitled to cancel the order should the service provider delay delivery for more than 15 days. Additionally, certain responsibilities are imposed on online ads to help protect customers from fraud.

The Ministry also warned that there are significant penalties for data breaches and/or a permanent or temporary suspension of service in the Kingdom.

The extent of the fines that can be levied will vary, from warnings to fines to closure of stores, depending on the type of violation.

The severity of the imposed penalty takes into account factors such as the seriousness of the violation, its frequency and the damage caused to others.

The Electronic Stores Monitoring Department is tasked with monitoring compliance with the e-commerce law and receiving complaints from consumers.

A 2018 ‘eShopWorld’ report found that there are 12.94 million users of e-commerce in Saudi Arabia, with an additional 6.34 million users anticipated by 2022. And that in 2022 19.28 million users of e-commerce will invest online an average of $487.70.

E-commerce volumes rose 49.9 percent in 2018 , up from 47.9 percent in 2017 and 37.3 per cent in 2016, according to the estimates from the Saudi Communications and Information Technology Commission.