Saudi Arabia approves first comprehensive consumer protection law

In a move aimed at strengthening consumer rights and ensuring fairness in commercial transactions, the Council of Ministers, chaired by Crown Prince Mohammed bin Salman, has approved the Consumer Protection Law. The new legislation provides a comprehensive legal framework to regulate the relationship between consumers and businesses, setting clearer standards to protect citizens from fraud, deception, exploitation, and unfair commercial practices.

The new law reflects a shift towards developing the consumer protection system, moving from multiple market regulations to a unified legal framework that consolidates consumer rights, trader obligations, and oversight mechanisms. This is expected to boost confidence in commercial dealings and enhance transparency and fair competition.

The significance of the decision goes beyond combating commercial fraud, extending to protect consumers at every stage of acquiring goods or services—from advertising and contracting to purchase and the right to compensation in case of harm.

Unified legislation ends regulatory fragmentation and strengthens consumer rights

The introduction of Saudi Arabia’s first comprehensive consumer protection law marks a significant legislative milestone. Comprising 10 chapters and 76 articles, it replaces three previous laws: the Anti-Commercial Fraud Law, the E-Commerce Law, and the Commercial Data Law.

This unification is important as it brings all consumer rights provisions under one framework, making rights and obligations clearer, reducing overlapping jurisdictions, and providing a more transparent legal reference for addressing violations and commercial disputes.

Protecting consumers from price hikes during crises

A key feature of the new law is the introduction of exceptional mechanisms to address abnormal price increases during crises, pandemics, and unusual circumstances, protecting consumers from exploitation during emergencies.

Measures permitted under the law include setting prices for certain products, imposing caps on profit margins, and requiring prior approval from the relevant authority before raising prices.

These measures are especially important during economic disruptions, giving authorities tools for temporary intervention to stabilize markets and preserve consumers’ purchasing power.

Combating misleading advertising

The law also protects consumers from marketing tactics that seek to influence purchasing decisions, banning misleading practices such as providing false information, concealing essential data, or presenting information unclearly, as well as promoting counterfeit products.

It also addresses practices that impose burdensome restrictions on consumers or use pressure and threats to sway decisions, and prohibits charging extra fees simply for using a particular payment method.

Another important guarantee is the ban on publishing fake reviews and comments, which enhances the credibility of published product and service ratings and protects consumers from deceptive promotional campaigns.

New guarantees for used products and services

The law expands protection to cover transactions outside traditional stores, subjecting them to guarantees similar to those in e-commerce.

It also includes provisions to protect consumers from unfair contract terms, nullifying unjust clauses, and introduces guarantees for used products and services, marking a significant step in safeguarding buyers’ rights beyond just new goods.

The law also allows comparative advertising between traders and economic entities, provided it is transparent, objective, and not misleading or disparaging to competitors, helping consumers compare prices, quality, and services before making a purchase.

Special protections for children, the elderly, and people with disabilities

A notable aspect of the law is its focus on vulnerable groups, especially children, the elderly, and people with disabilities, through special provisions that address their needs and provide additional protection in commercial dealings.

It also prohibits advertisements targeting children from containing messages that could harm their lives, health, or safety, reinforcing the responsibility of businesses and advertisers regarding marketing content aimed at this group.

Collective compensation and faster dispute resolution

The law not only prevents violations but also ensures that affected consumers can claim their rights by regulating compensation for damages caused by non-compliant products and services.

One of its key features is allowing consumer protection associations to file class action lawsuits to seek compensation for affected groups, enabling large numbers of consumers to be compensated without each having to file individually.

The law also streamlines dispute resolution mechanisms, introducing simplified procedures for minor claims to speed up case handling and improve access to justice.

Penalties up to 8 million riyals and two years in prison

To ensure compliance, the law imposes strict penalties on violators, 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 issuing consumer warnings.

Enforcement tools also include blocking non-compliant websites and withdrawing advertisements that violate the law, extending oversight to both traditional and digital markets.

20 government agencies to strengthen market oversight

Coordination among more than 20 government agencies involved in consumer protection and market oversight is expected to enhance the law’s implementation, improve regulatory coordination, and speed up handling of complaints and violations.

Minister of Commerce Majid bin Abdullah Al-Qasabi said the Cabinet’s approval of the law is a major legislative step to strengthen consumer rights in the Kingdom, noting that it establishes clear guarantees, regulates the relationship between consumers and businesses, and promotes fair commercial practices.

180 days until implementation

The law will come into effect 180 days after its publication in the official gazette, replacing the three previous regulations and ushering in a new era in the relationship between consumers and providers of goods and services.

With its guarantees of rights, mechanisms to address unjustified price hikes, penalties for fraud and deception, and avenues for compensation and dispute resolution, the law provides a comprehensive framework to boost market confidence. It marks a shift from merely responding to violations after they occur to proactively preventing them and regulating commercial practices to balance the interests of consumers and businesses.