On 10 November 2021 the Saudi Communications and Information Technology Commission published an open consultation of its draft Digital Content Platform Regulations, which were designed to regulate the activity of digital content platforms as per existing laws and regulations regarding service provision, content moderation, consumer protection, competition and stimulating foreign direct investment.
Article 4 of the Digital Content Platform Regulations, specifies that the Regulations are applicable to four types of digital content platforms[1]:
- Digital Video Platforms, including satellite pay tv platforms, IPTV platforms, Video OTT platforms and video sharing platforms
- Digital Audio Platforms, including audio-on-demand platforms and Internet radio platforms
- Digital Gaming Platforms, including online gaming platforms and Esports participation platforms
- Digital Advertising Platforms, including online advertising platforms and social media platforms.
Moreover, Article 5-1 highlights that it is not permitted for any service providers that manages a digital content platform that falls within the scope of the regulations to provide any service (free of charge or for a fee) to the public in the Kingdom, prior to fulfilling and satisfactorily achieving the “regulatory tool”, which refers to a requirement to obtain a licence, a registration certification or simply notify the CITC of intentions to provide digital content services in the Kingdom, as per Article 5-2.[2] Articles 9 and 11 then highlight the general provisions for licencing, registration or notification as well as application procedures.
The elephant in the room, however, relates to the provisions of Article 12 on “Procedures for applying for Annual Fees Calculation” and Annex 2 on “Fee Requirements” which specify that digital content service providers are obliged to pay a fee requirement to the CITC in lieu of services provided in the Kingdom. This includes an application/renewal fee ranging from SAR 5,000 – SAR 10,000 as well as an annual fee ranging from 0.2% – 0.5% of “relevant revenues”, which include revenue from users, revenue from partnerships and third-party retailer revenue, and advertising revenue. Annex 2 to specifies the methodology for calculating “relevant revenues.”
Other key provisions include (i) Article 6-1 on content moderation and takedown requests; (ii) Article 6-3 on lawful access requirements; (iii) Article 7.1 on Local Presence reading “Foreign Service providers providing digital content services to users inside the kingdom to have a main physical presence or a representative office – in addition to an official rep of the service provider in the Kingdom”; Article 7.4 on maintaining a record of content displayed on a platform for a 90 day period; and Annex 3 on Exemptions.
In conclusion, the draft Digital Content Platform Regulations introduces a broad set of obligations and compliance requirements on service providers and platform operators. These obligations and requirements are burdensome and will require careful manoeuvring.
Access Partnership emphasises the importance of responding to the CITC’s public consultation. The deadline for contributions has been set for 30 November. Interested stakeholders should submit their comments by email to: [email protected].
If you are interested in learning more about the draft Digital Content Platform Regulations, require support in drafting a response or engaging the CITC for clarity, contact Hussein Abul-Enein, Senior Policy Manager, Access Partnership.
[1] A full list of definitions is contained in Article 4 of the draft Digital Content Platform Regulations
[2] Article 5-2 further stipulates the applicable regulatory tool for the various types of digital content platforms.
