Overview:
The Cabinet has enacted Saudi Arabia's first unified consumer protection framework, consolidating three separate regulatory systems into a single law. The system mandates minimum two-year warranties on new products and one-year coverage on used items and services. Twenty government agencies will coordinate enforcement. Penalties for violations include fines reaching 8 million riyals and imprisonment up to two years, alongside administrative sanctions including activity suspension and product seizure.
Details:
The new system replaces the commercial fraud prevention system, e-commerce regulations, and commercial data framework. It establishes clear procedural safeguards for consumers, including the right to cancel contracts concluded outside retail premises within seven days without stating reasons, and mechanisms to challenge unfair contract terms that exempt sellers from obligations or permit unilateral modifications.
The law prohibits false product reviews, misleading advertisements, and false comparisons with competitors. Merchants are barred from charging fees for specific payment methods. The system includes special protections for children, elderly persons, and people with disabilities. During crises and unusual market conditions, authorities may impose temporary price controls and profit margin caps.
Dispute resolution mechanisms include simplified procedures for small claims and authorization for consumer associations to pursue collective damages suits. Alternative dispute resolution outside courts remains available.
Outlook:
Implementation begins with coordination among 20 agencies responsible for market oversight and consumer compliance. Market observers will monitor how enforcement addresses recurring complaints in e-commerce and retail sectors.