The Law on the Regulation of Electronic Commerce (“Law”) was amended on 07.07.2022. Accordingly, the Regulation on Electronic Commerce Intermediary Service Providers and Electronic Commerce Service Providers (“Regulation”) was published in the Official Gazette on 29.12.2022.
Within the scope of the relevant Regulation, the obligations of electronic commerce intermediary service providers (“ETAHS”) and electronic commerce service providers (“ETHS”), unfair commercial practices in electronic commerce, illegal content, intermediation agreement, electronic commerce license and other issues related to electronic commerce are regulated.
Even though the purpose is to help smaller e-commerce companies while competing and ensure a fair competition environment, these amendments and developments on e-commerce legislation has brought many discussions to the table due to the tightening and overregulated.
Accordingly, the stay of execution has been requested for the Regulation at the Council of State. It has decided to stay of execution for the Regulation’s several provisions including but not limited to unlawful content, violation of intellectual property rights, intermediation agreement, payment services, advertising and discount budget. Having said that, the Ministry of Trade has appealed the stay of the execution decision, and execution of the relevant provisions will be examined by the Plenary Session of the Administrative Law Chambers.
Furthermore, a lawsuit has been filed for the cancellation of relevant provisions of the Law at the Constitutional Court. The Constitutional Court recently ruled that the provisions of the Law which restrict companies’ activities if their sales exceed the determined threshold is in line with the constitution and rejected the cancellation request. Even though the reasoned decision has not been published yet, it has been expected that the Plenary Session of the Administrative Law Chambers will decide on the compliance of the Regulation with the law parallel to the Constitutional Court. Pursuant to the Plenary Session of the Administrative Law Chambers’ decision regarding the execution of the Regulation, the roadmap of the e-commerce companies may be needed to be updated to comply with the requirements of the Regulation.
If the Plenary Session of the Administrative Law Chambers changes the rule on the stay of execution of the Regulation, the followings are some of the provisions which will be executed:
ETAHS and ETHS will be obliged to obtain an electronic commerce license, and license fees will be determined pursuant to the monetary thresholds.
Advertising and discount budgets of the large and very large-scale ETAHS and ETHS have been restricted, and these budgets will be determined based on proportion to certain economic indicators such as the net transaction volume. Even though there is a limited exemption for sponsorship expenses, this is considered under the scope of the advertising budget.
Very large-scale of ETAHS will not engage in any activity to facilitate the provision of the services (including credits) of banks, financial leasing companies, factoring companies, finance companies, and savings finance companies that are in the same economic integrity as them except for payments.
Very-large-scale of ETAHS will not carry out delivery services, transportation organizer services, and postal services except for: (i) sales under its e-commerce marketplace; (ii) sales made by them as an electronic commerce service provider; and (iii) sales outside of the e-commerce sector.
ETAHS will not offer to sell or intermediate the sale of the goods bearing:
- its own trademark,
- trademark of the persons with whom it has economic integrity with or,
- trademark that ETAHS has the right to use.
In particular, these provisions aim to prevent large and very large-scale ETAHS/ETHS from following aggressive advertising policies, and practices that mislead the consumer and disrupt the competitive environment. It is also aimed to prevent unfair competition in the determination of the budgets that can be allocated for advertising and discounts and the amounts that can be allocated within the scope of these budgets with a casuistic method.
From the perspective of the consumers, it is expected that huge amounts of discounts and campaigns will be eliminated while arranging the expenses from the discount budget. Also, use of alternative payment and shipping methods on e-commerce will decrease.
In the upcoming days, Constitutional Court will issue its reasoned decision, and the Plenary Session of the Administrative Law Chambers will rule a decision regarding the execution of the Regulation. Upon the decision regarding the stay of execution of the Regulation, a new era will begin in Turkish e-commerce legislation.
Authors: Hatice Ekici Tağa, Bensu Özdemir
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