Saudi Arabia has approved a unified consumer protection law aimed at strengthening market oversight, curbing unfair commercial practices and consolidating regulations governing relations between consumers and businesses.
Approved by the Cabinet on Tuesday, the legislation introduces broader safeguards covering contracts, warranties and price disclosure. Violators face fines of up to SAR 8 million ($2.1 million) and prison sentences of up to two years.
The Kingdom’s first comprehensive consumer protection law covers products and services and will be implemented in coordination with more than 20 government agencies.
It seeks to protect consumers from harmful, defective or noncompliant products and services, guarantee compensation for damages, simplify dispute resolution and encourage sustainable consumption.
Addressing legislative gaps
The law addresses shortcomings in the existing framework, where consumer protection provisions are scattered across multiple regulations, creating inconsistencies and weakening consumer and investor confidence.
It complements other legislation, including the General Authority for Competition’s efforts to combat collusion and monopolistic practices.
The framework covers consumer safety, contractual terms, product liability, unfair commercial practices, warranties, repairs and maintenance.
It draws on UN consumer protection guidelines, Sustainable Development Goals, OECD documents, G20 principles and the Gulf Cooperation Council’s unified consumer protection law, alongside legislative practices from 11 countries, including the United States, Britain, France and Japan.
Unfair practices
The legislation targets practices that influence consumer decisions unfairly, including burdensome restrictions, pressure and additional fees for certain payment methods.
It prohibits fabricated reviews, manipulated consumer comments and misleading advertisements, including promotions for unavailable products, false scarcity claims and undisclosed advertising.
During crises, pandemics or other exceptional circumstances, authorities may impose price controls, cap profit margins or require prior approval for price increases, subject to Cabinet authorization and applicable procedures.
Transparency and consumer rights
Contracts concluded outside business premises will be subject to safeguards similar to those governing e-commerce.
Businesses must disclose their details, contact information and payment methods, while consumers may cancel such contracts without giving a reason within seven days, subject to applicable conditions.
Service providers must clearly disclose prices and inform customers about maintenance work, its duration and cost.
The law also seeks to invalidate unfair contractual provisions that exempt businesses from liability for negligence or allow them to amend or terminate agreements without consumer consent.
Special protections cover children, older adults and people with disabilities, including restrictions on advertisements that could endanger children’s health or safety.
Minimum statutory warranties are set at two years for new products and one year for services and used products, with longer periods possible depending on their nature.
Dispute resolution
Comparative advertising will be permitted provided it is fair, transparent and free from misleading claims or attempts to damage competitors’ reputations.
Competitions and their advertisements will require prior authorization. Businesses will be prohibited from placing competition coupons inside products, requiring purchases for participation or raising prices during promotional competitions.
The law also introduces simplified procedures for minor claims before competent courts, allows consumer associations to seek compensation for harm to collective interests and provides for alternative dispute resolution.
Enforcement
The legislation establishes graduated enforcement measures, beginning with orders requiring businesses to correct violations and remedy their consequences within specified deadlines.
Serious violations may result in the suspension of products, services or contractual provisions, the blocking of offending websites or the withdrawal of unlawful advertisements.
Cases may be closed under specified conditions when businesses correct violations and settle with affected consumers.
Additional administrative measures include suspending business activities, seizing noncompliant products and issuing consumer warnings.
Government coordination
Article 73 preserves the existing powers of regulatory and supervisory authorities, while maintaining additional consumer rights and guarantees established under other laws or international agreements.
Relevant agencies will oversee compliance, conduct inspections, document violations and enforce the law. A designated committee will examine objections. A dedicated center will handle consumer inquiries and complaints through the unified number 935.
The legislation is expected to strengthen consumer confidence, encourage fair competition, protect vulnerable groups and promote sustainable consumption while reducing waste and harmful products.
It will replace three existing laws 180 days after publication in the Official Gazette: the 2008 Anti-Commercial Fraud Law, the 2019 E-Commerce Law and the 2002 Commercial Data Law.
