The Law Firm of Hazim Al Madani Attorneys and Legal Consultants

The E-Commerce law in Saudi Arabia

Date: 17-11-2020

Important substantive and procedural provisions in the E-Commerce law:

The merchant is the person registered in the commercial registry, who provides the product electronically, while the practitioner is the person who is not registered in the commercial registry but engages in the activity of trade and provides the product electronically, and the common legal term for both the merchant and the practitioner is:

The E-Service Provider.

Provisions for the E-Service provider’s workplace:

The provisions of the law are applicable to the E-Service provider who provides

his products electronically within the Kingdom and is also applicable to the practitioner, who is outside the Kingdom, but provides his E-Products and E Services inside the Kingdom. 

The merchant’s place of business is the address recorded and specified in his commercial registry, while the practitioner’s workplace is the recorded place and specified in the E-Platform (online store), through which he offers his E-Products or E-services.

If the merchant or practitioner has more than one workplace and each of them has not specified a seat for him, then the place of residence will be the location associated with the contract, taking into account, the knowledge of the parties to the contract at the headquarters or their expectation of that headquarters, before the conclusion of the contract or upon its conclusion.

If the natural person does not have a place of business, then his regular residence is the one to be taken into account as the place of business. 

The presence of equipment and technology used by the E-Service provider to provide E-Services in a particular place is not conclusive evidence that place is a place of work. 

The service provider, as well as the E-Service provider using a domain name or email address related to a particular country, does not create a presumption that its place of business is located in that country.

Provisions for the consumer:

If an error occurs by the consumer while sending an electronic message to the EService provider after completing the E-Transaction, and he is unable to fix the error, because there is no communication technology that allows him to do so, then he has the right to inform the E-Service provider of the error within 24 hours after sending the electronic message as specified by the regulation. 

Provisions for registering E-Stores (E-Platforms):

Obligating the merchant to register his E-Store (E-Platform) in the commercial register, according to the commercial registration law.

The Ministry of Trade and Investment, shall supervise the E-Commerce sector, and issue the necessary rules to regulate it, in a way that enhances its role and protects the integrity of dealings in it.

Provisions for prohibitions on the E-Service provider:

Prohibiting and preventing the E-Service provider from preserving the consumer’s personal data and communications, except within the limits of the period required by the E-Transaction, and compels him to protect it, and to preserve its privacy, during that period, as the person responsible for that, because it is in his custody, and under the control of the agencies or agencies’ agents that an E-Service provider deals with.

Prohibiting and preventing the E-Service provider from using the consumer’s personal data and communications for purposes that are not authorized or permitted, or even disclosed to any other party, whether, for compensation, or without compensation, except with the consent/approval of the consumer. 

Provisions for service provider obligations:

Obligating the E-Service provider, in its E-Store, to disclose its name and address, if it is not registered with one of the E-Store documentation authorities, and to disclose the means of communication with it, the name and number of the record, if it is registered in the commercial register, and other data specified in the regulations.

Obligating the E-Service provider to provide a statement to the consumer, explaining the terms and conditions of the contract between them and its inclusion of the procedures to be taken to conclude the contract, the data of the E-Service provider, the characteristics of the E-Product or E-Service in question, and its price, including all fees, taxes and additional amounts for delivery, arrangements for payment, delivery, execution, guarantee data, and any other information specified by the regulation. Obligating the E-Service provider to provide an invoice to the consumer, stating the costs of purchasing the product, or providing the service, the price including taxes and fees, and additional amounts for delivery, and the place and time of delivery, as determined by the regulations.

Obliging an E-service provider who practices a profession subject to a specific regulation, and that requires a specific license or permit, to disclose the authority with which he is registered, the license or permit information, the applicable professional title, the country to which he granted it, and any other data specified by the regulation.

Provisions related to electronic advertising and its conditions:

E-Advertising is one of the contractual documents that complements the contracts concluded between the E-Service provider and the consumer, whose requirements are the parties to the contract, and must include the name of the advertised E-Product  or E-Service, the name of the E-Service provider or any distinctive statement thereof, the means of contacting it, and any other specified by the data.

The E-commerce law, prohibits the inclusion of an E-Advertisement, i.e. a false display, statement, or claim or any phrases that lead directly or indirectly to deceiving or misleading the consumer, and it is also prohibited to include the E-Advertisement any logo or trademark, which the E-Service provider does not have the right to use, Or include counterfeit marks, if the E-Service provider does not abide by that, and contrary to the requirements of the law, then the Ministry of Trade and Investment, shall obligate him to remove the violation or withdraw the E-Advertisement within 1 day from the date of reporting the violation.

Provisions for terminating the contract between the consumer and the E-Service provider and the cases of prohibiting the termination:

The consumer has the right to terminate their contract within the next 7 days from the date of receiving the E-Product or contracting to provide the service, in the event that the product is not used, or is not benefiting from the service, or obtain a benefit from either of them, additionally, the consumer bears the costs of terminating the contract, unless agreed otherwise.

The consumer may revoke the contract when the E-Service provider is late for delivery or execution for more than 15 days, from the date of concluding the contract, or for the date agreed upon, and he has the right to recover what he paid in return for the E-Product or E-Service, or other from Costs, unless they agree to extend the delivery or implementation deadline, or if the delay is due to the presence of force majeure, then the termination is not permissible, additionally, the E-Service provider must inform the consumer of any delay or difficulties expected to occur, which may delay the delivery time. Prohibiting and preventing the consumer from terminating the contract, if the product wanted and specified in the contract, is manufactured upon the request of the consumer, according to the specifications he specified.

Exception: terminating the contract is permissible, if there is a defect in the product or if it does not conform to the specifications of the consumer, then he may cancel the contract. Prohibiting the consumer from breaking the contract, if the product is video tapes, CDs or information programs, which the consumer has already used, or if the

contract includes purchasing newspapers, magazines, publications, or books, or the provision of accommodation, transportation, or food services, or buying software download products via the Internet.

Exception: Terminating the Contract is permissible, if the program has a defect which prevents the completion of the download or does not conform to the specifications of the consumer, then the termination will be permissible at that time.

The termination of the contract is prohibited if there is a defect in the product resulting from the misappropriation by the consumer.

Provisions for detecting violations, and referring them to the committee competent for their consideration, to decide and adjudicate them:

Employees appointed by a decision of the Minister will carry out supervision and inspection of E-Commerce transactions, and control violations of the law or  regulations.

One or more committees will be formed by the decision of the Minister, to consider violations of the provisions of the law, the number of members of such committees shall not be less than three members, including one legal advisor and its decisions shall be issued by a majority.

The committee for examining violations is responsible for inflicting penalties on violators, within a period not exceeding 10 days from the date of referring the violation of the E-Service provider to it, and it has the power to stop the blocking, partially or completely, if it deems it justified.

Provisions for penalties in the system:

The penalties vary according to the severity of the violation, its frequency, the size of the activity of the E-Service provider, and the harm caused to others because of it, and those penalties are expected by the committee to consider violations.

The committee undertakes the task of inflicting penalties stipulated by law on violators, and those penalties are warning, or a fine that does not exceed one million riyals, or suspending the practice of electronic activity temporarily or permanently, or withholding the electronic store partially or completely, temporarily or permanently, and it is permissible for whoever A decision against him, against the decision or grievance against him, was issued against him before the Administrative Court, according to the system of pleadings before the Board of Grievances.

The decision issued for the punishment shall be published at the expense of the violator, in one or more local newspapers, which are issued in his place of residence.

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