The Kingdom of Saudi Arabia is undergoing rapid digital transformation touching all aspects of economic and social life. At the heart of this transformation, the e-commerce sector stands out as one of the fastest-growing and most dynamic sectors. E-commerce is no longer just an additional option; it has become a strategic necessity and a fundamental driver for advancing the national economy, in line with the ambitious goals of Saudi Vision 2030, which seeks to diversify income sources and enhance the digital economy and e-commerce.
This immense growth in the volume and diversity of e-commerce transactions, which includes selling products and providing services through digital platforms, presents new challenges and opportunities that require increasing legal awareness among all involved parties. Whether you are a consumer seeking your rights when purchasing online, an entrepreneur establishing your online store, or an existing company looking to expand its digital business scope, understanding the legal framework governing e-commerce in the Kingdom is of paramount importance to ensure the safety of transactions, protect rights, and avoid violations.
Recognizing this importance, the Kingdom of Saudi Arabia has taken the initiative to establish an integrated regulatory and legislative framework aimed at enhancing trust in e-commerce transactions, providing necessary consumer protection, and stimulating the growth of this promising sector. Foremost among this framework is the “E-commerce Law” issued by Royal Decree No. (M/126) dated 1440/11/07 AH, and its executive regulations issued to detail its provisions and clarify its implementation mechanisms.
This article aims to be your comprehensive guide to exploring the most prominent features of the legal environment for e-commerce in Saudi Arabia, focusing on the fundamental obligations placed on service providers (merchants and practitioners) and the guaranteed rights of consumers in this digital space. We will also highlight the role of intermediary platforms and provide a forward-looking perspective on the expected developments in this vital sector as 2025 approaches, emphasizing the importance of continuous compliance with regulations to ensure a safe and successful journey in the world of e-commerce.
Amidst this evolving regulatory environment, the need for a reliable legal partner with the necessary experience and knowledge to help you understand your obligations and rights and provide appropriate legal solutions becomes apparent. Here, “Rahn Law Firm for Advocacy and Legal Consultations” prides itself on offering its specialized services in the field of e-commerce. Our team possesses a deep understanding of Saudi regulations and the practical challenges faced by those working in this sector, and we are fully prepared to be your legal guide every step of your journey in the thriving world of e-commerce.
المحتوى
To keep pace with rapid growth and provide a safe and reliable environment, the Kingdom of Saudi Arabia has established a robust legal framework regulating various aspects of e-commerce. This framework represents the cornerstone for ensuring the rights of all parties and enhancing transparency in digital transactions. At the forefront of this regulation is the Saudi “E-commerce Law,” issued under Royal Decree No. (M/126) dated 1440/11/07 AH, which came into effect to shape commercial dealings through electronic means.
The E-commerce Law primarily aims to achieve a set of strategic objectives, most notably enhancing trust in the validity and safety of e-commerce transactions, which is vital for encouraging consumers and businesses to engage in this type of commerce. The system also seeks to provide necessary protection for consumers from harmful or misleading practices that may occur in the digital space, and to ensure they receive their full rights. In addition, the system works to stimulate and develop e-commerce activities in the Kingdom, recognizing its pivotal role in the digital economy and achieving the goals of Vision 2030.
To clarify the mechanisms for implementing the law and detailing its provisions, the “Executive Regulations of the E-commerce Law” were issued in 1441 AH (2020 AD). These regulations provide a detailed explanation of the obligations and procedures to be followed by service providers and consumers, and more precisely define the concepts and practical requirements for practicing e-commerce in a systematic manner. The regulations include details on data disclosure, consumer data protection, electronic contract terms, invoice requirements, advertising regulation, consumer rights to rescind, electronic store documentation, and the obligations of intermediary platforms.
To properly understand the law and its regulations, it is essential to grasp the basic definitions provided in the E-commerce Law. E-commerce is defined as any economic activity conducted by a service provider and a consumer – wholly or partially – by electronic means; for the purpose of selling products or providing services, advertising them, or exchanging related data. A “service provider” is a merchant registered in the commercial register or a practitioner not registered in the commercial register who engages in e-commerce and has an electronic store.
A “consumer” is a person who engages in e-commerce for the purpose of obtaining products or services provided by the service provider. An “electronic store” refers to any digital platform that allows a service provider to display, sell, advertise products or services (such as websites and applications). Finally, an “electronic advertisement” is any promotion conducted by electronic means for the purpose of promoting a service provider’s products or services. These definitions form the basis upon which all provisions and obligations related to e-commerce in the Kingdom are built.
The Saudi E-commerce Law and its executive regulations impose a clear set of obligations on service providers (merchants and practitioners) who conduct their activities through digital platforms. These obligations aim to ensure transparency, protect consumers, and foster a safe and regulated working environment for the e-commerce sector. Compliance with these requirements is essential not only to avoid systemic penalties but also to build a strong relationship of trust with customers and achieve sustainable success in the competitive e-commerce market.
Transparency is the cornerstone of building trust between the service provider and the consumer in e-commerce. Therefore, the law obliges service providers to disclose a set of essential data in their electronic stores in a clear and easily accessible manner. This data includes:
Transparency obligations also extend to contract details and terms. The service provider must provide the consumer, before completing the purchase, with a clear statement that includes all contract details, such as an accurate description of the product or service, the total price including all fees (including delivery costs and taxes), payment, shipping, and delivery terms and conditions, contract duration (if applicable), and any warranties or after-sales services. Finally, a detailed and savable electronic invoice must be provided to the consumer after the contract is completed, containing all essential transaction data.
In the age of data, protecting consumer privacy is of utmost importance. The E-commerce Law and the Personal Data Protection Law (PDPL) emphasize the necessity of protecting consumers’ personal data. The service provider is obligated to take all necessary technical and administrative measures to protect this data from any unauthorized access, disclosure, modification, or processing. Consumer data should only be retained for the period necessary to achieve the purpose of its collection (which is often the fulfillment of contractual obligations), and it may not be used for any other purposes, such as marketing or advertising, without obtaining explicit, prior, and independent consent from the consumer.
In the event of any data breach, the service provider must notify the competent authority (Ministry of Commerce and the Saudi Data and Artificial Intelligence Authority “SDAIA”) and the affected consumer within a period not exceeding 72 hours in most cases (according to PDPL) or 3 days (according to the E-commerce Regulations), clarifying the nature of the breach, its impacts, and the measures taken to address it.
Electronic advertising plays an important role in e-commerce, but it must be conducted according to controls that ensure consumers are not misled. The advertisement must clearly state that it is advertising material and include essential information that enables the consumer to make an informed decision. The advertiser must also comply with all regulations and rules related to advertisements in the Kingdom and obtain the necessary licenses if the advertised product or service requires it. As a fundamental consumer right, the advertiser must provide a clear and easy way for the consumer to request to stop receiving advertisements at any time.
To ensure market regulation, a merchant engaging in e-commerce is obligated to register their main electronic store in the commercial register within 30 days from its establishment date. A practitioner (non-merchant) can also request registration in the commercial register if they wish to acquire merchant status. If the commercial activity or profession practiced by the service provider requires obtaining a specific license or permit from a competent government authority, they must disclose the details of this license or permit in their electronic store.
Compliance with these requirements not only enhances the credibility of the service provider in the e-commerce market but also protects them from legal penalties and contributes to building a healthy and sustainable digital business environment in the Kingdom of Saudi Arabia.
The Saudi legislator’s interest was not limited to defining the obligations of service providers in e-commerce; it also placed great importance on protecting consumers and ensuring they receive their full rights when dealing through digital platforms. The E-commerce Law and its executive regulations aim to empower consumers and provide them with the necessary tools to make informed decisions and defend their interests, thereby enhancing trust in this type of transaction and encouraging its growth.
One of the most basic consumer rights in e-commerce is to obtain clear and complete information before completing any transaction. The consumer must be able to easily access the service provider’s basic data (name, address, contact methods, commercial register or license), in addition to reviewing the detailed terms and conditions of the contract, and the store’s policies related to privacy, exchange, return, and complaints. The product or service description must also be accurate and comprehensive, and the total price must be clearly displayed, including all taxes, fees, and potential delivery costs. This right to knowledge enables the consumer to compare and make an informed purchasing decision.
Data privacy is one of the most significant concerns in the digital age. The Saudi system guarantees the consumer the right to protect their personal data shared during e-commerce transactions. The service provider is obligated to maintain the confidentiality of this data and not to collect, use, or disclose it except within the limits necessary to carry out the transaction or with the explicit consent of the consumer. The consumer also has the right to know how their data is processed and the measures taken to protect it, and to request its correction or deletion in cases permitted by law.
The E-commerce Law grants the consumer the right to rescind the contract within 7 days of receiving the product or contracting for the service without stating reasons or paying penalties, known as the “cooling-off period.” Exceptions include perishable products, custom-made products, products that cannot be returned for health reasons, in addition to accommodation, transport, and catering services, auctions, and products linked to market fluctuations. In case of rescission, the consumer bears the cost of returning the product.
The law protects the consumer from any misleading or deceptive commercial practices in the field of e-commerce. This includes false advertisements, displaying incorrect information about the product or service, or concealing essential defects. All information provided to the consumer must be correct, accurate, and not misleading.
In the event of any dispute or conflict related to an e-commerce transaction, the law guarantees the consumer the right to file a complaint. The service provider must clarify the mechanism for receiving and processing consumer complaints. If a satisfactory solution is not reached, the consumer can resort to the competent authorities, such as the Ministry of Commerce or the relevant courts, to settle the dispute according to legal procedures.
These rights form a safety net for the consumer in the world of e-commerce and contribute to building a balanced and fair relationship between the parties to the digital transaction in the field of e-commerce.
The world of e-commerce is not limited to the direct relationship between the service provider and the consumer; it also witnesses the emergence of a pivotal role for electronic intermediary platforms (Marketplaces). The executive regulations of the E-commerce Law define these platforms as any website or electronic application that acts as an intermediary between service providers and consumers, whether by displaying advertisements, promoting products and services, enabling order reception and payment, or any other service that facilitates the practice of e-commerce.
Given the important role these platforms play in bringing together a large number of sellers and buyers and facilitating transactions, the Saudi legislator has allocated specific obligations to them to ensure market regulation and the protection of all parties. Intermediary platforms have fundamental responsibilities, including:
1.Transparency and Publication of Terms: The platform must clearly publish its terms and conditions of use, its privacy policies, and mechanisms for handling user complaints (whether service providers or consumers), in addition to the dispute resolution policy that may arise between parties dealing through the platform.
2.Disclosure of Platform Data: The platform is obligated to disclose its basic data required by law, just as is required from other service providers in e-commerce.
3.Verification of Service Provider Data: The platform must request data from service providers who display their products or services through it, including contact information, and documentation or commercial registration data (if any). It is also obligated to retain and periodically update this data and provide it to the competent authorities (such as the Ministry of Commerce) upon request. This procedure helps verify the identity of sellers and increase reliability.
4.Content Management: The platform is obligated to delete any content, products, or services displayed on it that violate the provisions of the E-commerce Law or its executive regulations or the terms and conditions of use of the platform itself.
5.Cybersecurity: The platform must enhance its cybersecurity to protect user data and transaction integrity, and comply with the controls and requirements issued by the competent authorities in this regard. It must also deal quickly and efficiently with any security incidents or breaches and notify the competent authorities and affected users according to legal procedures.
6.Retention of Contract Data: The platform is obligated to retain sufficient data about contracts and transactions conducted through it for a period of no less than three years (unless another law stipulates a longer period), to enable reference to it when needed, while observing the provisions of personal data protection.
Regulating the role of intermediary platforms in e-commerce contributes to creating a safer and more organized environment and ensures the presence of a responsible party that can be referred to in case of issues related to transactions conducted through these vital platforms.
Navigating the evolving legal landscape of e-commerce in the Kingdom of Saudi Arabia requires more than just a general understanding of regulations; it demands specialized legal expertise and deep knowledge of the practical challenges faced by businesses and individuals in this dynamic sector. The multiple obligations related to disclosure, data protection, consumer rights, advertising regulation, and dealing with intermediary platforms necessitate a precise legal approach to ensure compliance and avoid risks.
Here, “Rahn Law Firm for Advocacy and Legal Consultations” plays its role as a strategic partner and trusted legal advisor for all those working in the e-commerce sector. We fully understand the complexities of the regulatory environment and the unique challenges faced by entrepreneurs, startups, and established companies seeking to capitalize on the immense opportunities offered by the Saudi e-commerce market. Our team of specialized lawyers and consultants possesses a comprehensive understanding of the E-commerce Law and its executive regulations, the Personal Data Protection Law (PDPL), and other related regulations, and we are committed to providing practical and innovative legal solutions that meet the diverse needs of our clients.
Our specialized services in the field of e-commerce include:
As the Kingdom of Saudi Arabia moves steadily towards achieving the goals of Vision 2030, the e-commerce sector is expected to witness further significant developments and growth in 2025 and beyond. This growth will be driven by several factors, including increased internet penetration, widespread use of smart devices, government support for digital transformation, and the increasing demand from consumers for online shopping experiences. However, this growth also brings new challenges that require continuous adaptation and legal readiness.
To seize these opportunities and overcome challenges, continuous legal awareness and proactive compliance are essential. Businesses must regularly review their legal practices, update their policies, and seek specialized legal advice to ensure they are operating within the latest regulatory framework.
The e-commerce sector in Saudi Arabia is a dynamic and promising field, offering immense opportunities for growth and innovation. However, navigating its complexities requires a deep understanding of the legal framework and a commitment to compliance. The E-commerce Law and its executive regulations, along with other related laws, provide a robust foundation for protecting consumers and regulating the activities of service providers and intermediary platforms.
“Rahn Law Firm for Advocacy and Legal Consultations” is your ideal partner to ensure your success and legal safety in this thriving sector. Our specialized team is equipped with the knowledge and experience to guide you through every legal aspect of your e-commerce journey, from ensuring compliance with disclosure and data protection requirements to drafting robust legal documents and representing you in disputes.
Do not let legal complexities hinder your e-commerce ambitions. Take the proactive step towards legal clarity and protection.
Contact Rahn Law Firm for Advocacy and Legal Consultations today for a confidential discussion about your e-commerce legal needs.
Phone: [966114400058+]
Email: [info@rhn-group.net]
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Your success in e-commerce is our legal mission.
