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Winds of Change @ E-commerce

Winds of Change @ E-commerce

Turkey
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The Turkish Law No. 6563 on the Regulation of Electronic Commerce (“E-Commerce Law”) adopted in 2014, basically regulates the responsibilities of e-commerce service providers ("Service Provider") and e-commerce intermediary service providers (“Intermediary Service Provider”), the contracts made over electronic communication tools and their obligations to provide information based on electronic commerce, and the sanctions that can be applied. The E-Commerce Law also aims to provide an environment of trust in the electronic commerce market, protect personal data, the confidentiality of communication, and protect consumers in their transactions in the electronic commerce Marketplaces (“Marketplace”).

With the effect of the COVID-19 pandemic, the e-commerce market, which has grown at a record level, needs to be reorganized according to the needs of today's world. In this direction, the draft regulation prepared by the Ministry of Commerce (“Ministry”) was accepted in the parliament with minor changes and was published in the Official Gazette on 07.07.2022.

We would like to briefly explain the main issues that are subject to the regulation below:

Responsibility of the Electronic Commerce Intermediary Service Provider for Illegal Content in the Electronic Marketplace

Since it remained unclear in the previous version of the law, this new regulation clarifies the problem of “illegal content”, which is generally obscured by the terms of the contract between Intermediary Service Providers and Service Providers.

With this new regulation, it is stipulated that the Intermediary Service Providers are not responsible for the illegal matters regarding the goods and services offered to the Marketplace by the Service Provider. However, along with this irresponsibility, there are also some obligations imposed on the Intermediary Service Provider. These obligations are as follows:

  • Immediately removing the content that is found out to be illegal and informing relevant public institutions and organizations about this situation,
  • Regarding intellectual and industrial property, if the right owner claims and complains, removing the content which is subject to the complaint, informing the right owner and if the Service Provider applies with documents showing that the complaint is unfounded, republishing the content.

Broad Supervision Authority of the Ministry of Commerce 

With the new regulation, the Ministry of Commerce is equipped with broad powers in order for the development of electronic commerce and the protection of competition, and is even authorized to determine the mandatory elements to be included in the “Intermediation Agreement” between the Service Provider and the Intermediary Service Provider since the electronic commerce is a constantly developing and changing sector.

Moreover, in addition to the existing "supervision" authority, the Ministry has been authorized to request all kinds of information, documents, books, including those kept in the electronic environment, to receive written and verbal information from the relevant people (especially in cases where there is a need to examine software and algorithms), and to appoint an expert when necessary. In line with this authorization, the Intermediary Service Provider and Service Provider are also obliged to keep all kinds of information, documents, books and electronic records that may be required for this examination for 10 years.

Unfair Practices in Electronic Commerce

With this new regulation, commercial practices of the Intermediary Service Provider that seriously impair the Service Provider's commercial activities, reduce its ability to make a reasonable decision, force him to take a certain decision or to become a party to a legal transaction are considered as "unfair commercial practices". In addition to this definition, certain actions have also been clearly specified within the scope of unfair commercial practice. Some of those actions are as follows;

  • Restricting the Service Provider's commercial relations, offering goods and services through alternative channels, or advertising, or forcing it to supply goods or services from anyone,
  • Not making the payment to the Service Provider in return for the sale of goods or services within five business days after the order reaches the consumer and the price reaches the Intermediary Service Provider,
  • Forcing the Service Provider to sell campaigned goods and services,
  • Not drafting the commercial relationship conditions in writing or electronically, and not stocking the contract in an easily accessible way, 
  • Receiving the amounts and rates which are not stipulated in the Intermediation Agreement from the Service Provider, 
  • Reducing the Service Provider's rank in the recommendation list or restricting, suspending, terminating the service provided by him, regardless of the objective criteria in the Intermediation Agreement or on the grounds that an application has been made to public institutions or judicial authorities,
  • Despite it is not expressly specified in the agreement or the Service Provider does not give consent in writing, using Service Provider's brand for marketing and promotional activities.

With this legal regulation it is aimed that the Service Provider, which does not have bargaining power against the Intermediary Service Providers, can act of their own free will and not be forced to become a party to the contracts they do not intended.

Obligations of the Intermediary Service Provider

In line with the regulation, some striking and revolutionary obligations have been envisaged for the Intermediary Service Provider, some of which vary according to the amount of the Marketplace's net transaction volume and number in a calendar year. These obligations are listed below:

Obligations That are Applicable to All Intermediary Service Providers:

  • The Intermediary Service Provider may not offer or mediate the sale of its own brands or the brands of the persons with whom it has economic integrity with, in the Marketplaces where it provides intermediary services. This prohibition will not be applied to the goods and services that derive more than half of the total sales revenue from sales other than electronic commerce. *

Obligations of Intermediary Service Providers whose Net Transaction Volume in a Calendar Year Exceeds TRY Ten Billion:

  • The data obtained from the Service Provider and the buyer will only be used for the intermediation service, and will not be used while competing with the Service Providers in the Marketplace where the intermediation service is offered or in any other electronic environment.
  • Access will not be provided between their electronic commerce environments and Marketplaces which are owned by the Intermediary Service Provider and each other will not be promoted in these environments.
  • Technical opportunities will be provided for the free transfer of the data obtained by the Service Provider through hand-sales and access to these data.
  • A report containing the procedures for the detection of illegal issues regarding the content provided by the Service Provider and the violations detected will be sent to the Ministry.
  • In case of establishment of a company, acquisition of shares of established companies, and transfer of shares, these transactions will be reported to the Ministry within one month.

Obligations of Intermediary Service Providers whose Net Transaction Volume in a Calendar Year Exceeds TRY Thirty Billion and the number of transactions exceeding one hundred thousand, excluding cancellations and refunds:

  • Some financial limits have been set for Intermediary Service Provider in relation to the advertising budget and promotions, rewards, points, coupons, gift certificates and similar opportunities that will be provided to buyers.
  • The Service Provider's commercial relations, offering goods or services at the same or different prices through alternative channels, or advertising shall not be restricted. It shall not be forced to supply goods or services from any person, and any provision that allows this shall not be included in the intermediation agreement.

Obligations of Intermediary Service Providers whose Net Transaction Volume in a Calendar Year Exceeds TRY Sixty Billion and the number of transactions exceeding Ten million, excluding cancellations and refunds:

  • The Intermediary Service Provider shall not enable the acceptance of electronic money issued by electronic money institutions which it is in economic integrity.*
  • Except for the sales in the electronic commerce marketplaces where it provides intermediary services, its sales as an electronic commerce service provider, and its sales outside of electronic commerce, he shall not be engaged in the activities of goods transportation and postal service provider. *
  • In the event that an electronic environment is provided for the publication of goods or service announcements, it shall not be allowed the conclusion of contracts or placing orders for the supply of goods or services in the same environment. In the event that these services are provided in different electronic environments by himself or the persons with whom he is in economic integrity, he shall not provide access between these environments and shall not promote each other.

Obligations of the Service Provider

In line with the regulation, the Service Provider is prohibited from engaging in marketing and promotion activities in online search engines by using the registered trademark of persons with whom it does not have an economic integrity without permission.

License Obligation for Intermediary Service Provider**

In line with the regulation, it is stipulated that Intermediary Service Providers must obtain a license from the Ministry and renew this license every year in order to continue their activities. This obligation is valid for Intermediary Service Providers whose net transaction volume in a calendar year is over 10 billion Turkish Liras and whose number of transactions excluding cancellations and refunds is over one hundred thousand. The license renewal fee will be calculated according to the net transaction volume of the Intermediary Service Provider in a calendar year.

Is There Any Matter in The Regulation Regarding the Protection of Personal Data?

In accordance with the E-Commerce Law currently in force; It has been stated that the service provider and the Intermediary Service Provider are responsible for the storage and security of the personal data they have obtained due to the transactions they have made within the framework of the law. At the same time, although it is regulated with the E-Commerce Law that they cannot transmit personal data to third parties and use them for other purposes without the consent of the person concerned, it is seen that this article regarding the protection of personal data with  this regulation has been removed. As a reason; It has been pointed out that service providers and intermediary service providers within the scope of the E-Commerce Law are also data controllers under the Personal Data Protection Law No. 6698 (“KVKK”). Accordingly, it has been concluded that the provision in the current E-Commerce Law limits the obligations of service providers and intermediary service providers in terms of processing personal data, and it has been deemed appropriate to remove the relevant article from the text of the Law. Moreover;

  • In order to ensure auditability of intermediary service providers and service providers and to ensure effectiveness in this audit, an obligation has been introduced to keep the information, documents, ledgers, and electronic records of their business and transactions within the scope of the Law for ten years from the date of the work or transaction.
  • It is seen that there are frequent problems in the detection of commercial electronic message senders in the process of finalizing commercial electronic message complaint applications. It is regulated that the Ministry of Commerce has authorized to obtain the information from the Information Technologies and Communication Authority of the natural person or legal person makes voice call or sends short message in order to finalize the complaints much more easily and quickly.

Service providers and intermediary service providers are obliged to take all necessary technical and administrative measures to prevent the unlawful processing of personal data, to prevent unlawful access to personal data, to ensure the preservation of personal data, and to ensure the appropriate level of security.

In addition, they must fulfill the obligations of clarification and explicit consent regulated in the KVKK, inform about cookies and obtain the necessary permissions, and fulfill the obligations of registration in the registry of data controllers, if necessary.

As a result, the provisions on the protection of personal data in the unrevised version E-Commerce Law text were restrictive. With these changes, it is intended to point out that the service providers and intermediary service providers who access the data of real persons through electronic commerce are actually data controllers who must act in full compliance with the KVKK.

Administrative Fines

In order to ensure compliance with the new regulations that will come into force, severe administrative sanctions are envisaged by the legislator regarding the violation of these regulations. In this direction, the main administrative fines to be applied are as follows:

  • Regarding unfair commercial practices, an administrative fine of TRY 10.000 to TRY 100.000 is imposed on the Intermediary Service Provider for each Service Provider exposed to unfair commercial practices, 
  • An administrative fine of TRY 500.000 to the Intermediary Service Provider for each Service Provider who is forced to change the sales price unilaterally or to sell campaigned goods or services;
  • An administrative fine of TRY 10.000.000 to the Intermediary Service Provider, which provides access between its own electronic commerce environments and promotes each other in these environments, and also an administrative fine of TRY 20.000.000 to the Intermediary Service Provider, who provides an electronic environment for the publication of advertisements for goods or services, enabling the conclusion of contracts or placing orders for the supply of goods or services in the same environment,
  • A fine of 2 times the amount of the previous administrative fine in a case that the violation is not remedied within 1 year despite the implementation of the said administrative fines, or if the same violation is repeated,
  • An administrative fine of ten times the aforementioned fines, in case these acts are carried out with works and transactions aimed at misleading the Ministry of Commerce,

Various severe administrative sanctions are envisaged for other illegal transactions of the Intermediary Service Provider, with varying amounts and calculation methods.

When Will It Take Effect?

The amendments in the relevant regulation will enter into force as of 01.01.2023 in general, except for the exempted provisions. Moreover; It is envisaged that the intermediation agreements made before the effective date of the regulation should also be brought into compliance with the regulation within 6 months, otherwise the provisions that are not made into compliance will become null and void.

(* It will enter into force as of 01.01.2024.)

(** It will start to be fulfilled as of 01.01.2025.)

Conclusion

It is seen that the purpose of these regulations introduced for Marketplaces which have completely changed consumer habits and retail trade is to protect the competitive environment and Service Providers lacking negotiation power. With the opinion that the regulations brought by the amendments are fundamental and the sanctions for the violations are heavy, the legislator is giving time for Intermediary Service Providers in order to make them ensure the necessary operational adaptation and help them gain time by making the regulations come into force much later than the date of publication.

By Onur Kucuk, Managing Partner, Alperen Kocalan, Associate, and Melodi Ozer, Associate, KP Law

Turkey Knowledge Partner

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