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Saudi consumers can be assured they will have full data protection on their online exposures. Kingdom's law imposes tough penalties against e-tailers that do not fail to comply. Image Credit: Reuters

Abu Dhabi: Out of 75,000 online stores registered on ‘Maarouf’, the Saudi e-commerce service that guarantees data confidentiality of its users, only 44 shops have complied so far.

“Offenders were issued with fines and five other e-stores were shut down for breaking the e-commerce laws,” officials at the Ministry of Commerce told ‘Al Riyadh’ newspaper.

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Owners of e-stores have now been told to review and update their systems to protect consumers’ data and prepare a privacy policy, if they don’t already have one on their website. They will also need to include an “unsubscribe” option, update their terms and invoices in line with the kingdom’s regulations.

They must also register their e-store on the commercial register and ensure that they hold the appropriate licence from the ministry.

The Ministry also warned that the fines for data breached are substantial – of up to one million riyals and/or permanent or temporary suspension of activity in the Kingdom.

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What the Saudi E-Commerce Law could impose as penalty on e-retailers.

Protect the consumer

The law aims to raise consumer confidence in e-commerce transactions. It includes provisions intended to protect consumers against fraud and misrepresentation of information. There is a clear emphasis on the protection of individuals’ data, and the law imposes a legal obligation on the service provider to maintain the privacy.

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

There are certain circumstances where this need not be the case and are set out in the law. These are likely to include a situation where the good is defective due to poor consumer care.

Consumers also have the right to cancel the order if the service provider delays delivery for more than 15 days. Further, certain obligations are placed on online ads to further protect consumers against fraud.

A market heading into a boom

A tudy conducted by ‘eShopWorld’ found in 2018 “there are 12.94 million e-commerce users in Saudi Arabia, with an additional 6.34 million users expected by 2022”. And that in 2022 the “19.28 million e-commerce users will spend an average of $487.70 online”.

According to figures from Saudi Communications and Information Technology Commission, e-commerce volumes grew 49.9 per cent in 2018, up from 47.9 per cent in 2017, and 37.3 per cent in 2016.

Penalties

The severity of the penalties that can be imposed pursuant to the E-Commerce Law range, depending on the violation, from the violator receiving a mere warning, to receiving a fine of up to one million riyals.

The online store may be suspended or closed down permanently. The severity of the penalty imposed takes into consideration factors such as the seriousness of the violation, its frequency and the damage caused to others.

The Department of Monitoring Electronic Stores is tasked to monitor compliance with the E-commerce Law and receive consumers’ complaints.