The Law on the Regulation of Electronic Commerce ("Law") underwent amendments on July 7, 2022. As a result, the Regulation on Electronic Commerce Intermediary Service Providers and Electronic Commerce Service Providers ("Regulation") was published in the Official Gazette on December 29, 2022.
The Regulation encompasses various aspects, including the obligations of electronic commerce intermediary service providers ("ETAHS") and electronic commerce service providers ("ETHS"), regulations pertaining to unfair commercial practices in electronic commerce, addressing illegal content, intermediation agreements, electronic commerce licensing, and other related issues concerning electronic commerce.
While the intention behind these amendments was to support smaller e-commerce companies in their competition and establish a fair competition environment, the tightening and overregulation of the e-commerce legislation have sparked numerous discussions.
Consequently, the Council of State received requests to suspend the execution of the Regulation. The Council of State decided to stay the execution of several provisions of the Regulation, such as those related to unlawful content, violation of intellectual property rights, intermediation agreements, payment services, advertising, and discount budgets. Following this decision, the Ministry of Trade appealed the suspension of execution, and the Plenary Session of the Administrative Law Chambers will review the relevant provisions.
Furthermore, a lawsuit was filed with the Constitutional Court seeking the cancellation of certain provisions of the Law. The Constitutional Court recently ruled that the provisions of the Law restricting companies' activities if their sales exceed a predetermined threshold are constitutionally sound and rejected the cancellation request. Although the detailed reasoning for this decision is yet to be published, it is anticipated that the Plenary Session of the Administrative Law Chambers will assess the Regulation's conformity with the Constitution. Depending on the outcome, e-commerce companies may need to update their strategies to comply with the Regulation.
If the Plenary Session of the Administrative Law Chambers overturns the rule on the stay of execution of the Regulation, the following provisions will take effect:
ETAHS and ETHS will be required to obtain an electronic commerce license, with license fees determined based on monetary thresholds.
Advertising and discount budgets of large and very large-scale ETAHS and ETHS will be limited and determined in proportion to certain economic indicators, such as net transaction volume. There is a limited exemption for sponsorship expenses, which will be considered part of the advertising budget.
Very large-scale ETAHS will be prohibited from facilitating the provision of services (including credits) from banks, financial leasing companies, factoring companies, finance companies, and savings finance companies that are part of the same economic entity, except for payment services.
Very large-scale ETAHS will be restricted from engaging in delivery services, transportation organizer services, and postal services, except for sales under their e-commerce marketplace, sales made as an electronic commerce service provider, and sales outside the e-commerce sector.
ETAHS will not be allowed to offer for sale or act as an intermediary for goods bearing their own trademark, the trademark of entities they have economic ties with, or trademarks they have the right to use.
These provisions primarily aim to prevent large and very large-scale ETAHS/ETHS from adopting aggressive advertising practices, misleading consumers, and disrupting the competitive environment. They also seek to eliminate unfair competition regarding the allocation of budgets for advertising and discounts.
For consumers, these changes may result in the reduction of extensive discounts and campaigns, and there could be fewer alternative payment and shipping options available in e-commerce.
In the near future, the Constitutional Court will issue its detailed ruling, and the Plenary Session of the Administrative Law Chambers will make a decision regarding the execution of the Regulation. Following these decisions, a new era will commence in Turkish e-commerce legislation.
For any questions or inquiries regarding the latest advancements in Turkish E-Commerce Legislation, please feel free to contact us. We are here to assist you with any information you may need.
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