E-commerce Regulation Entered into Force
Introduction
Law No. 6563 on the Regulation of Electronic Commerce (E-commerce Law or Law) has recently undergone a radical change in order to regulate the behavior of the players in the rapidly growing and developing e-commerce sector.[1] The new regulations that came into force[2] as of January 1, 2023[3] envisage important obligations for the actors in the e-commerce sector, and introduce important restrictions,especially in order to prevent unfair competition in e-commerce and to prevent practices that distort competition. The E-commerce Regulation (Regulation), which is the secondary regulation expected since July 2022, in order to determine the procedures and principles regarding the implementation of the new obligations under the amended Law, especially the activities and audits of electronic commerce intermediary service providers (ETAHS) and electronic commerce service providers (ETHS),[4] entered into force as of January 1, 2023.[5] This article briefly discusses the main changes brought about by the E-commerce Regulation.
Medium, Large and Very Large ETAHS and ETHSs Defined
ETAHSs with an annual net transaction volume of over ten billion TRY are considered to be medium-sized. Those with an annual net transaction volume of thirty billion TRY and an annual net transaction volume of over one hundred thousand, excluding cancellations and returns, are large-scale Very large scale ETAHSs are those with an annual net transaction volume of sixty billion TRY and more than one hundred thousand transactions excluding cancellations and refunds.
Similarly, ETHSs with an annual net transaction volume of ten billion TRY and more than ten million transactions excluding cancellations and returns are defined as medium-sized, ETHSs with an annual net transaction volume of thirty billion TRY and more than ten million transactions excluding cancellations and returns are defined as large-sized, and ETHSs with an annual net transaction volume of sixty billion TRY and more than ten million transactions excluding cancellations and returns are defined as very large-sized.
Unlawful Content, Intellectual and Industrial Property Rights Violations and Unfair Commercial Practices
The E-commerce Regulation clarifies the steps to be taken by an ETAHS in the event that the content offered by an ETHS is found to be unlawful. Accordingly, if an ETAHS is aware that the content presented by an ETHS is unlawful, it is obliged to remove this content for a period not exceeding 48 hours and to report the illegal issue to the ETHS and the relevant public institutions and organizations. In theory, the rapid action of the ETAHS should preventpossible grievances from arising.
Again, the E-Commerce Regulation clarifies the procedures and principles for the processing of a complaint for infringement of intellectual and industrial property rights by ETAHS, the procedure for appealing the complaint by an ETHS to ETHAS, the steps to be taken by ETHAS for the examination upon the complaint, and the termination of the complaint application.
Unfair commercial practices in e-commerce are expressly prohibited by both the E-commerce Law and the E-commerce Regulation. The aim is to ensure that ETHS's can decide with their free will and not be forced to become a party to any contract.[6] In any case, the behaviors considered as unfair commercial practices are included by analogy in the E-commerce Law. The E-commerce Regulation, on the other hand, mostly repeats the situations listed in the Law.
Furthermore, the E-commerce Regulation explicitly prohibits large and very large-scale ETAHSs from restricting the commercial relations of the ETHSs, from offering goods or services at the same or different prices through alternative channels or from advertising, or from forcing the ETHSs to procure goods or services from any person, as these are considered unfair commercial practices.
Intermediary Contract
An intermediary contract is a contract that specifies the terms of the commercial relationship between ETAHS and ETHS in writing or electronically. Matters that must be included in an intermediary contract at a minimum are listed in the E-commerce Regulation. In addition, in the intermediary contract to be made by medium, large and very large scale ETAHSs, it is stipulated that an ETHS's access to data and the possibility of free data transport should be provided.
In addition, the Regulation, as well as the relevant rules of procedure, stipulate that an ETAHS cannot restrict, suspend or terminate the intermediary service, except for the objective criteria included in the intermediary contract, and in case of situations requiring this, it will decide whether to continue the intermediary services while that it waits for the ETHS to provide a justification.
Obligations of ETAHS and ETHS
The new regulations introduced to the E-Commerce Law impose very important obligations on ETAHSs and ETHSs. Some of them are valid for all e-commerce players, while others are for medium, large and very large scales. The E-commerce Regulation detailed the procedures and principles regarding the implementation of the obligations introduced by the Law.
Obligations on all ETAHSs
Internal communication system
The E-commerce Regulation determines the method of communication between ETAHSs and ETHSs, and stipulates that the applications to be made by ETHSs are made through the internal communication system. In addition, an ETAHS is obliged to finalize the applications made by ETHS through the system within 15 days and notify the result to the ETHS through the system. The internal communication system implementation will come into force on 01.07.2023; transactions made prior to this date can be made by technical means such as e-mail.
Sale of branded products of ETAHS
An ETAHS cannot offer goods for sale or act as an intermediary in the sale of goods bearing its own brand[7] or a brand which it has the right to use, in e-commerce marketplaces where it offers intermediary services. ETAHSs must comply with this obligation until 01.01.2024.
Obligations on all ETAHSs and ETHSs
Promotion and access in online search engines
One of the important regulations introduced by both the E-Commerce Law and the E-Commerce Regulation is the restriction on the marketing and promotion activities of ETAHSs and ETHSs on online search engines. Accordingly, ETAHSs or ETHSs may not engage in marketing and promotion activities in online search engines by placing advertisements on keywords consisting of registered trademarks that constitute the exclusive main element of the domain names registered in the Electronic Trade Information System (ETBIS) of persons with whom they are not economically integrated without obtaining their prior affirmative declaration of will in writing or electronically. The details of the complaint process for such an infringement are contained in the E-commerce Regulation.
Obligations of Medium, Large and Very Large ETAHSs
Data usage and sharing
The regulation introduces significant restrictions and obligations in terms of data usage and sharing behaviors of medium, large and very large scale ETAHSs. Accordingly, effective as of 01.01.2024, medium, large and very large scale ETAHSs to be will only use the data they have obtained for the purpose of providing intermediary services, and in case an ETAHS operates as an ETHS at the same time, it will not use the data obtained while competing with other ETHSs, but will allow the ETHSs to carry the data obtained due to its sales free of charge. The Regulation has listed the data that ETHS must provide free and efficient access to. In addition, medium, large and very large scaled ETAHSs that offer data transport to ETHSs are obliged to create an application programming interface for the transport and storage of data belonging to ETHSs. Finally, it is clearly mandated that ETHS's data access and data transfer requests must be met by an ETAHS within 15 days by anonymizing the recipient information.
Compliance report
Medium, large and very large scaled ETAHS's are responsible for examining the content provided by ETHS as per the E-Commerce Law, consumer protection, protection of personal data and protection of industrial property rights to determine any violation of the legislation each year. They are responsible for submitting a report on the results of the examination to the Ministry of Commerce (Ministry).
Medium, Large and Very Large ETAHS and Obligations of ETHSs
Share transfer notification and independent audit
Medium, large and very large scaled ETAHSs and ETHSs should notify ETBIS about the company establishment and share transfer transactions, the ratios of which are specified in the Regulation. They should also have an independent audit firm conduct an audit for the previous calendar year and send the prepared audit report to the Ministry in April of each calendar year.
Access and promotion restriction
Medium, large and very large-scale ETAHSs and ETHSs cannot provide access between electronic commerce environments belonging to themselves or those with whom they are in economic integrity, and cannot promote each other in these environments, with the exception of electronic commerce environments included in the net transaction volume.
Obligations of Large and Very Large ETAHSs and ETHSs
Advertising and discount budget
Large and very large-scale ETAHSs and ETHSs may have an advertising spending and offer a discount and of up to two percent of the portion of thirty billion TRY of the twelve-month average Consumer Price Index change rate applied to the net transaction volume for the same calendar year, and up to three thousandths of this amount for the portion above thirty billion TRY in the following calendar year. The advertising and discount budget restriction introduced by the Law has been detailed in the E-commerce Regulation, and regulations on advertising and discount budget calculations have been introduced.
Very Large ETAHS and Obligations of ETHSs
Payment Service
Very large-scale ETAHSs in electronic commerce marketplaces, and very large-scale ETHS in e-commerce environments, in accordance with the relevant legislation specified in the Regulation, banks or e-money institutions with which they are in economic integrity cannot provide an opportunity to carry out activities related to the realization of banking and payment services. Relevant ETAHS and ETHSs must comply with this obligation until 01.01.2024.
Advertisement service
If very large-scale ETAHS and ETHSs provide an electronic environment for the publication of goods or service announcements, they cannot allow the conclusion of contracts or placing orders for the supply of goods or services in the same environment.
Obligations of Very Large ETAHSs
Postal and transport services
A very large scale ETAHS cannot engage in postal service activities, except for the sales in the e-commerce marketplaces where it provides intermediary services, its sales as ETHS and its sales outside of e-commerce. ETAHSs must comply with this obligation until 01.01.2024.
E-Commerce License
One of the most striking amendment intoduced to the E-Commerce Law is the obligation to obtain an e-commerce license, which must be fulfilled by 01.01.2025. An ETAHS which has a net transaction volume of ten billion TRY in a calendar year, and over one hundred thousand transactions excluding cancellations and returns, and large and very large-scale ETAHSs and medium, large and very large ETHSs that generate more than half of their total sales revenue from electronic commerce sales, must obtain a license from the Ministry and renew its license in order to continue its activities. The Regulation requires that the license application and renewal application be finalized within 15 days. On the other hand, the rules introduced by the Regulation on the calculation of the license fee, as well as the granting and renewal of the license, are not discussed in more detail than in the Law.
Conclusion
With the creation of the E-commerce Law and its secondary regulation, the E-commerce Regulation, it is expected that e-commerce practices will undergo a radical change. The basic aim of the renewed e-commerce legislation, which creates important regulations regarding the activities and audits of ETAHS and ETHSs, is to prevent unfair commercial practices in e-commerce. The obligations of ETAHS and ETHS to obtain an e-commerce license, the legal and technical duties that ETAHSs have to undertake in terms of data usage and sharing behaviors, the activity restrictions imposed on ETAHS and ETHS according to their scales, are considered to be the most important regulations that will open the door to the change in e-commerce. ETAHS and ETHSs, which are divided into medium, large and very large scales by the Regulation, have many intersecting and divergent obligations. The regulations, some of which will come into force as of January 1, 2023, and some that will be implemented in the short future, should be examined separately for each e-commerce player. Thus, e-commerce players and practitioners will need to go through a strict adaptation process in order to adapt to the e-commerce legislation, which brings many and comprehensive obligations both legally and technically.
- “What Changes Does the Amanded E-commerce Law Bring?”article titled https://www.erdem-erdem.av.tr/en/insights/what-changes-does-the-amended-e-commerce-law-bring.
- The Law Amending the Law on the Regulation of Electronic Commerce published in the Official Gazette dated 07.07.2022 and numbered 31889.
- Some provisions will enter into force on different dates.
- The Regulation on Electronic Commerce Intermediary Service Providers and Electronic Commerce Service Providers was published in the Official Gazette dated 29.12.2022 and numbered 32058, repealing the Regulation on Electronic Commerce Service Providers and Intermediary Service Providers published in the Official Gazette dated 26.08.2015 and numbered 29457.
- Some provisions will enter into force on different dates.
- Proposal Article Preamble numbered 2/4528, p. 13.
- Including the brands that is owned by the undertakings within the same economic integrity.
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