E-Commerce Obligations in Turkey
Zeynep Sener and Yegan Liaje, co-founders and partners of LINER LAW in Istanbul, provide an overview of how both “Marketplaces” and “Sellers” in Turkey are bound by the Amended E-Commerce Law and the E-Commerce Regulation, which came into effect on 1 January 2023.
Considering the continued opportunity for exponential growth compared to more mature markets, the Turkish e-commerce sector remains of interest to foreign and local investors alike. The Turkish authorities have shown an active interest in the impact of the rapidly growing e-commerce sector on the Turkish market in recent years. The Ministry of Trade revealed its proactive stance in July 2022 with the publication of a high-impact law amending the main piece of legislation in the field – Law No 6563 Regarding the Regulation of Electronic Commerce (the “E-Commerce Law”), which had been in effect without significant changes since 1 May 2015.
The E-Commerce Law in its original iteration reflected the main concerns of the younger e-commerce market, with a focus on consumer protection and information flow. On the other hand, the E-Commerce Law as amended by Law No 7416 (the “Amended E-Commerce Law”) pays particular attention to the market power of marketplace platforms and introduces the concept of escalating obligations based on “net transaction volume”. The Amended E-Commerce Law came into effect on 1 January 2023, together with its main secondary regulation, the Regulation on Electronic Commerce Intermediary Service Providers and Electronic Commerce Service Providers (the “E-Commerce Regulation”).
“A bold legislative effort, the Amended E-Commerce Law... drew significant criticism, culminating in an annulment challenge before the Turkish Constitutional Court by the main opposition party, the Republican People’s Party.”
A bold legislative effort, the Amended E-Commerce Law is weighted in many ways against the continued growth of the largest multi-sided platforms, and it drew significant criticism, culminating in an annulment challenge before the Turkish Constitutional Court by the main opposition party, the Republican People’s Party. The annulment request was rejected by the court with a decision dated 13 July 2023, settling the legislative framework of the Turkish e-commerce sector for the time being.
This overview of the key material obligations placed by the Amended E-Commerce Law and the E-Commerce Regulation on e-commerce intermediary service providers (ie, e-commerce platform operators or “Marketplaces”) and e-commerce service providers (ie, online sellers of goods and services, or “Sellers”) operating in Turkey, is provided with a view to highlighting novel aspects of the Turkish legislative framework compared to other models. In this context, routine consumer protections remaining in place from the first version of the E-Commerce Law, regarding informational rights and e-commerce communications, are not highlighted.
Key General Obligations of Marketplaces and Sellers
- Marketplaces are not liable for the unlawful content of Sellers; however, they are obliged to remove such content upon becoming aware of its unlawful or intellectual property-infringing nature and to inform the authorities.
- Unfair commercial practices – practices of intermediaries that materially disrupt the commercial activities of Sellers, impact their ability to make rational decisions, or force them to be a party to commercial relationships they would not normally enter – are not allowed in e-commerce. Specific examples are provided, including delayed remittance of payments received, one-sided price or contract changes, forced discounts, and de-ranking or service limits without objective measures.
- Marketplaces cannot sell own brands (including group company brands) on their own platforms or provide access to other environments where they are sold, unless the brand rightsholder derives more than half its total sales revenue from non-electronic commerce. Periodicals, newspapers, books and e-readers are exempted.
- Marketplaces cannot use Sellers’ registered domain name brands for marketing and promotional purposes on online search engines without express written or electronic consent.
- Sellers cannot use third parties’ registered domain name brands for marketing and promotional purposes on online search engines without express written or electronic consent, unless such Sellers derive more than half their total sales revenue from sales other than e-commerce.
- Marketplaces must enable Sellers to present the documents they must issue under Turkish tax regulations on the platform and verify the Sellers’ identifying information based on official public databases or documents the Sellers have submitted.
Net Transaction Value-Dependent Obligations of Marketplaces and Sellers
Net transaction value is defined as the total value of final invoices issued in a defined period, excluding cancellations and returns, on a Marketplace or a Seller’s own e-commerce environment that is not a marketplace. The obligations below are cumulative, and each group mentioned is also bound by the obligations of the lower net transaction value groups.
- Net transaction value above TRY10 billion in a calendar year:
- Marketplaces must allow Sellers effective access to, and the right to move, the data derived from sales free of charge.
- A Marketplace cannot cross-market or provide access between its different e-commerce environments without including them in its net transaction value.
- Marketplaces must inform the Ministry of Trade within one month of any share sales and purchases in other companies or company establishments, as well as non-listed share transfers of 5% (and its multiples) of its share capital by shareholders.
- Marketplaces must provide the Ministry of Trade with independent audit reports and reports on their activities to detect unlawful content.
- Net transaction value above TRY30 billion in a calendar year or net transaction number (excluding cancellations and returns) above 100,000:
- In one of the two most controversial and novel elements of the Amended E-Commerce Law, the annual budget of Marketplaces (together with the Sellers within their economic unity) for (i) advertising, and (ii) discounts comprising promotions, prizes, points, coupons, gift certificates and similar benefits, are restricted by the following formula – 2% of the portion of X corresponding to TRY30 billion + 0.3% of the portion of X above TRY30 billion, where X = the net transaction value of the previous calendar year multiplied by the 12-month average CPI change rate. Only one quarter of such budget can be used each quarter of the calendar year.
- Marketplaces cannot restrict the commercial relationships of service providers, force them to acquire goods or services from another party, or restrict their ability to offer goods or services or to advertise on alternative channels at the same or differing prices.
- Net transaction value above TRY60 billion in a calendar year or net transaction number (excluding cancellations and returns) above 100,000:
- Marketplaces cannot facilitate the provision of services by banks and other financial institutions within their economic unity (including the provision of loans) on their platform other than payment transactions including credit card payments.
- Marketplaces cannot allow for the acceptance for payment of e-money issued by e-money institutions within their own economic unity on their platform.
- Marketplaces cannot provide delivery services, transportation arrangement services or postal services other than for – (i) sales on their own platform, (ii) sales conducted by them as Sellers, and (iii) their non-electronic commerce sales.
- Marketplaces cannot provide an e-commerce environment for both sales and/or goods notices and the provision of sales and/or goods on the same platform, and if a Marketplace or an entity within its economic unity operates platforms that separately provide such services, these Marketplaces cannot be cross-marketed or linked.
- Obligation to obtain an e-commerce licence: this obligation is in effect an obligation to pay an annual licence fee and, as the second of the two most controversial and novel elements of the Amended E-Commerce Law, the licence fee amount differs exponentially based on the net transaction value of the e-commerce Marketplaces of the economic unity to which a Marketplace belongs. The brackets increase in multiples of TRY10 billion from TRY10 billion to TRY50 billion, in multiples of TRY5 billion from TRY50 billion to TRY65 billion with the last bracket being net transaction values exceeding TRY65 million.
The obligations on Marketplaces will apply to Sellers by analogy, provided that such Sellers derive at least half their sales from e-commerce.
