New consumer protection law targets price hikes and deceptive practices

Saudi Arabia’s new consumer protection law introduces exceptional measures to guard against abnormal price increases during extraordinary circumstances, such as crises and pandemics. These measures include setting price caps, limiting profit margins, and requiring prior approval from the relevant authority before raising prices, all aimed at maintaining market stability and safeguarding consumer interests.

The Ministry of Commerce stated that the law addresses commercial practices that may influence consumer decisions, such as imposing burdensome restrictions, using threats or undue influence, or charging fees for specific payment methods. The law prohibits misleading practices or attempts thereof, including providing false information that could deceive consumers, concealing relevant details, presenting information unclearly, or offering counterfeit products for sale.

The law allows comparative advertising between economic operators to enable consumers to fairly and transparently compare products and services. It also strengthens consumer protection for contracts made outside traditional retail outlets by subjecting such agreements to guarantees similar to those in e-commerce.

The ministry clarified that the law includes special provisions to protect vulnerable groups and prohibits advertisements targeting children from containing messages that could harm their lives, health, or safety.

Violators face penalties including fines of up to 8 million riyals (SAR), imprisonment for up to two years, suspension of business activities, confiscation of non-compliant products, and public consumer warnings. The law also streamlines dispute resolution procedures for minor claims, ensuring quicker access to justice.