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25 November 2022

New Era On Turkish E-Commerce Law

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Inal Law Office

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Led by Şeyma İnal, İnal Law Office combines in-depth knowledge of Turkish law with an international outlook. Experienced members of our team assist local and multinational clients in Commercial, M&A, Shipping, Banking and Finance, Corporate, Energy, Transportation, Construction, Competition, Employment, Litigation and Arbitration fields under the requirements of business frameworks.
Law No. 6564 on the Regulation of Electronic Commerce ("Law") was amended with the Law Amending the Law on the Regulation of Electronic Commerce (the "Amendment Law") adopted...
Turkey Corporate/Commercial Law
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Law No. 6563 on the Regulation of Electronic Commerce ("Law") was amended with the Law Amending the Law on the Regulation of Electronic Commerce (the "Amendment Law") adopted by the Turkish Parliament on 1 July 2022 due to the concerns that in its current state, it was inefficient to address the problems created in the face of rapidly changing digitalization and technology. Influenced by the European Union's Digital Markets Act and the Digital Services Act, the Amendment Law was published in the Official Gazette on 7 July 2022 and will enter into force on 1 January 2023[1], brings fundamental changes to the E-Commerce Law, yet relevant restrictive ones compared to the former EU regulations.

I. Fundamental Changes the Law Brings

I.1 Authorities of the Ministry

The Amendment Law authorizes the Ministry of Commerce (the "Ministry") to regulate the activities of both the electronic commerce service providers and the electronic commerce intermediary service providers to ensure the development of electronic commerce, to determine the mandatory elements included in the intermediary agreements, maintain an effective and fair competition environment, and finally, to make regulations on the activities of the electronic commerce service providers and electronic commerce intermediary service providers.

I.2 New Definitions

The Amendment Law brings new definitions such as electronic commerce service provider, electronic commerce intermediary service provider, electronic commerce medium, electronic commerce marketplace, electronic commerce information system, net transaction volume and economic integrity. Furthermore, undertakings operating in the fields of private pension, banking, insurance, financing, capital markets, payment services, betting and chance games, travel agency, civil aviation, and electronic communication are not deemed to be within the scope of electronic commerce intermediary service providers or electronic commerce service providers.

According to the new definitions: (i) "electronic commerce service provider" means a service provider that concludes contracts or takes orders for the provision of goods or services in the electronic commerce marketplace or in its own electronic commerce environment and (ii) "electronic commerce intermediary service provider" is an intermediary service provider that allows the electronic commerce service providers to make a contract or place an order for the supply of goods or services in the electronic commerce marketplace.

I.3. Unfair Commercial Practices

Unfair commercial practices are prohibited within the scope of the Amendment Law. Pursuant to the Amendment Law, the following practices of the electronic commerce intermediary service providers are deemed as unfair commercial practices:

  • practices that significantly disrupt the commercial activities of the electronic commerce service providers,
  • practices that reduce the electronic commerce service providers' ability to make reasonable decisions or,
  • practices that force a party to a commercial relation, which it would normally not be a party to, by compelling it to take a specific decision.

I.4. Obligations of Electronic Commerce Intermediary Service Providers and E-Commerce Service Providers

The Amendment Law brings important obligations for all electronic commerce intermediary service providers. Besides, additional obligations are put forth for electronic commerce intermediary service providers whose net transaction volume and transaction number exceed certain thresholds in a calendar year.

I.4.1 Obligations of Electronic Commerce Intermediary Service Providers

The Amendment Law imposes significant obligations for all the intermediary services providers to prevent them from using the advantage their position brings, and the data obtained from their sales to gain competitive advantage. Accordingly, the electronic commerce intermediary service providers must comply with the following obligations:  

  • Not Selling their Own Brands: Electronic commerce intermediary service providers shall refrain from offering or intermediating the sale of goods bearing their own brands or the brands of their affiliates that are under the same economic integrity or in the electronic commerce marketplaces where the intermediary services are provided.
  • Ensuring the provision of the Information within the scope of the Tax Procedure Law: Electronic commerce intermediary service providers shall ensure that the information in the documents that are required to be issued within the scope of the tax legislation can be provided in the electronic commerce marketplace where the sale is made.
  • Marketing and Promoting Activities: Electronic commerce intermediary service providers shall not engage in marketing or promotion activities in online search engines by using the electronic commerce service providers' registered trademarks that constitute the main element of the domain names registered in the electronic commerce information system, ETBIS, without obtaining their prior written or electronic consent.
  • Verifying Information: Electronic commerce intermediary service providers shall verify the introductory information of the electronic commerce service providers through the documents obtained from them or from the relevant institutions' electronic systems.
  • Removing the Illegal content: Electronic commerce intermediary service providers shall remove the illegal content provided by service providers as soon as they become aware of such illegality and notify the authorities immediately. Electronic commerce intermediary service providers shall not be liable of the unlawful points with respect to the contents or goods or services subject to the content provided by the electronic commerce service providers.

The Amendment Law sets forth further obligations to the electronic commerce intermediary service providers with net transaction volume over TRY 10 billion, TRY 30 billion and TRY 60 billion in a calendar year, which shall be explained below in detail.

Electronic Commerce Intermediary Service Providers with a Net Transaction Volume over TRY 10 billion

Electronic commerce intermediary service providers with a net transaction volume over ten billion in a calendar year must also comply with the following obligations:

  • Data Restrictions: Electronic commerce intermediary service providers falling under this category shall only use the data obtained from the electronic commerce service providers and buyers to provide the intermediary services and shall not use such data to compete with other electronic commerce service providers in the electronic commerce marketplaces or other e-commerce environments where the intermediary services are provided.
  • Access/Promotion Limitation: An electronic commerce intermediary service provider falling under this category shall not provide access between its own electronic commerce environments except for the electronic commerce environments included in its net transaction volume and shall not promote each other in these environments.
  • Notification Obligation: Electronic commerce intermediary service providers falling under this category shall notify the Ministry of any share transfers or acquisitions of shares that amount to 5% or more, except for the shares that are listed in the stock exchange, within one month from the date of record in the share ledger. If they establish a company, acquire, or transfer the shares of the established company they shall also report this within one month from the registration of such establishment in the trade registry, in case of establishment, and from the date of record in the share ledger in case of acquisition/transfer.
  • Report Submission: Electronic commerce intermediary service providers falling under this category shall send audit reports prepared by independent audit firms, to the Ministry.

Electronic Commerce Intermediary Service Providers with Net Transaction Volume over TRY 30 billion

Electronic commerce intermediary service providers with a net transaction volume over thirty billion and number of transactions over 100,000 excluding cancellations and returns in a calendar year must also comply with the following obligations, among others explained in the above sections.

  • Limitation on Advertising Expenses: Electronic commerce intermediary service providers under this category shall limit the advertising expenses, promotions, rewards, points, coupons, gift certificates and similar opportunities.
  • Restriction on Operations: Electronic commerce intermediary service providers under this category shall not restrict the e-commerce service providers' commercial relations, their offering of goods or services at the same or different prices or their advertisements on alternative channels; and not compel electronic commerce service providers to procure goods or services from anyone.    

Electronic Commerce Intermediary Service Providers with Net Transaction Volume over TRY 60 billion

Electronic commerce intermediary service providers with a net transaction volume over sixty billion and number of transactions over 100,000 excluding cancellations and returns in a calendar year must also comply with the following obligations, among others explained in the above sections.

  • Electronic Money and Banking Operation Restrictions: Electronic commerce intermediary service providers under this category shall not engage in activities that facilitate the provision of the services of banks, financial leasing companies, finance companies and savings finance companies within its own economic integrity, excluding the payments that include those with credit cards. They shall also not enable the performance of any activity that facilitates the acceptance of digital currencies exported by specific institutions.
  • Operation Restrictions: Electronic commerce intermediary service providers under this category shall not engage in commodity transportation, transportation organizer services nor in postal services; except for the sales made in the electronic commerce marketplace where they provide intermediary services, the sales made as the electronic commerce service providers and the sales outside of the electronic commerce sector.

I.4.2 Obligations of Electronic Commerce Service Providers

The Amendment Law does not separately introduce obligations for the electronic commerce service providers, but instead states that the obligations imposed on the electronic commerce intermediary service providers will be applied by analogy with certain exceptions, and distinctions as per certain thresholds determined for net transaction volumes and transaction numbers of the electronic commerce service providers.  

As per the Amendment Law, the electronic commerce service providers shall not engage in marketing or promotion activities in online search engines by using the registered trademarks of the persons with whom they are not in economic integrity; which constitute the main element of the domain names registered in the electronic commerce information system, ETBIS, without obtaining their prior written or electronic consent.

I.5. Administrative Fines

The Amendment Law sets forth different amounts of administrative fines to be imposed in case the relevant obligations are breached, from one thousand Turkish liras to forty million Turkish liras. Furthermore, based on the nature and repetition of the violation, such administrative fines may be multiplied.

I.6.  License Liabilities

Electronic commerce intermediary service providers with a net transaction volume over ten billion and number of transactions over 100,000 excluding cancellations and returns in a calendar year shall obtain a license from the Ministry and renew such license to continue its activities. The provisions regarding the obligation to obtain a license will enter into force on 1 January 2025.

License fees set forth are as follows:

      Net transaction volume

                   Licence Fees

TRY 10-20 billion

0.03% of the part exceeding TRY 10 billion

TRY 20-30 billion

in addition to the above amount, 0.5% of the part exceeding TRY 20 billion

TRY 30-40 billion

in addition to the above amounts, 1% of the part exceeding TRY 30 billion

TRY 40-50 billion

in addition to the above amounts, 5% of the part exceeding TRY 40 billion

TRY 50-55 billion

in addition to the above amounts, 10% of the part exceeding TRY 50 billion

TRY 55-60 billion

in addition to the above amounts, 15% of the part exceeding TRY 55 billion

TRY 60-65 billion

in addition to the above amounts, 20% of the part exceeding TRY 60 billion

over TRY 65 billion

in addition to the above amounts, 25% of the part exceeding TRY 65 billion

I.7. Transition Process

The Amendment Law provides certain provisions to enable the transition of the companies as per the new requirements. Accordingly, the Amendment Law grants a grace period to the relevant companies to adapt their brokerage agreements in a way to render them compliant with the new requirements of the Law. It further sets forth that the relevant provisions of the brokerage agreements; that have been entered into before the entry into force of the Amendment Law, which are not adapted in accordance with the provisions of the Amendment Law within six months from 1 January 2023, shall be deemed void.

2. Conclusion

The tendency to regulate digital markets have been on many country's agenda lately. The amendment made on the electronic commerce can be evaluated as a step taken in this regard, which aims to prevent unfair commercial practices, protect the competitive environment, and ensure a balanced growth of the electronic commerce market in Turkey. Nevertheless, the high license fees and high administrative fines set forth, restrictions regarding the sale of one's own brands will all have major impact on the electronic commerce environment in Turkey.

Footnote

1 Except for specific provisions on data portability, announcement to the Ministry which will enter into force on 1 January 2024; and the obligation to obtain e-commerce license which shall be fulfilled as of 1 January 2025.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

ARTICLE
25 November 2022

New Era On Turkish E-Commerce Law

Turkey Corporate/Commercial Law

Contributor

Led by Şeyma İnal, İnal Law Office combines in-depth knowledge of Turkish law with an international outlook. Experienced members of our team assist local and multinational clients in Commercial, M&A, Shipping, Banking and Finance, Corporate, Energy, Transportation, Construction, Competition, Employment, Litigation and Arbitration fields under the requirements of business frameworks.
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