Legal requirements for e-commerce stores

Introduction

In 2020, more than 27% of the world's population shopped online according to statistics, and in the latest statistics issued by the United Nations Conference on Trade and Development (UNCTAD), the Kingdom ranks second in the Arab world and 49th globally among 152 countries on the E-commerce Index. Since 1995, when the Amazon platform emerged, selling has no longer required physical outlets. The Kingdom's regulations did not stand by without regulating a market that has become a contributor to the national product; it has worked on issuing and improving regulations to solidify the foundations of e-commerce. Therefore, neglecting commitment to these regulations makes the store vulnerable to blocking and imposition of fines, exposing it to the loss of consumer trust.

History

Jul 2024

The sector

E-Commerce Law

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It must be emphasized at the outset that a store is required to obtain a commercial registration if it employs workers to perform the work, owns offices or warehouses, or if its activity requires the issuance of specific permits. However, if owners conduct the business themselves and the activity does not require a permit, they can suffice with a freelance document. Nevertheless, a license must still be issued when practicing certain activities, such as selling cosmetics or medicine, for example. Furthermore, the Ministry of Commerce has established several requirements for practicing legal e-commerce, including the mandatory disclosure of certain information on the online store: the privacy policy, the procedures followed for receiving and handling complaints, and the tax number of the service provider. To increase the reliability of e-commerce activities, the Ministry of Commerce highlighted key points that online stores must adhere to, which include providing various means of communication, such as a phone number, email, and live chat. Electronic payments must also be secure and processed through accredited banks. Additionally, before completing the purchase, the store must specify the expected delivery time and have a clear, written policy for exchanges and returns. In the post-sale stage, the store must provide an option to file a complaint on the website and on social media, while disclosing the specific timeframe for responding to and resolving complaints. As for the last points disclosed by the Ministry, online stores in the Kingdom must support the Arabic language and use it in the complaint submission system, live chats, and product displays.

All of these requirements have become necessary to provide an environment that inspires confidence in consumers, thereby boosting the continuous development and growth of e-commerce in the Kingdom. Following numerous complaints regarding delivery delays and procrastination in resolving them, the Ministry had to take such measures to protect the rights of both the consumer and the merchant. To establish an online store that meets all requirements—from a confidence-inspiring usage policy to terms of contract that preserve the rights of all parties—legal entities work to provide services that ensure those wishing to launch their online stores comply with e-commerce regulations, avoiding violations and fines.