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New Law Amending the Law on the Regulation of Electronic Commerce in Turkey: A Brief Introduction

August 2022 – While the adoption in 2014 of Law No. 6563 on the Regulation on Electronic Commerce was an important step towards the growth of e-commerce in Turkey, the rapid development of information and communication technologies since then and the COVID-19 pandemic have drastically changed the dynamics of Turkey’s e-commerce ecosystem. In 2019, the percentage of e-commerce transactions in Turkey among all commerce transactions was 9.8%; this grew to 17.7% in 2021, when the volume of retail e-commerce reached TL 234 billion (approx. EUR 13 billion). Moreover, the number of businesses engaged in e-commerce activities, which was 256,861 in 2020, reached 484,347 in 2021—an increase of 88%. This article briefly explains the Law Amending the Law on the Regulation of Electronic Commerce (the "Law"), which was adopted by the Turkish Parliament on 1 July 2022.

Changes introduced by the Law

Scope:

  • The Law regulates that those whose establishment and activities are regulated by the special laws and who operate exclusively in the areas for which they are authorised by these laws, such as businesses authorised to engage in the following activities—travel agencies, civil aviation, private pension, banking, insurance, financing, capital markets, payment services, betting and gambling, and electronic communication—will not be considered as electronic commerce intermediary service providers or electronic commerce service providers in the implementation of the Law.

Newly introduced concepts:

  • Electronic commerce intermediary service provider: An intermediary service provider that enables the conclusion of contracts or the placing orders for the supply of goods or services of electronic commerce service providers in the electronic commerce marketplace.
  • Electronic commerce service provider: A service provider that makes contracts or takes orders, either in the electronic commerce marketplace or in their own electronic commerce environment.
  • Electronic commerce environment: Platforms such as websites, mobile sites or mobile applications where electronic commerce activities are carried out.
  • Electronic commerce marketplace: The electronic commerce environment where the electronic commerce intermediary service provider offers its intermediary services.
  • Net transaction volume: The total of the final invoice or document substituted for the invoice, including all taxes, funds, fees and the like. In the continuation of the text of the draft law, the liabilities of electronic commerce instrument service providers are determined according to their net transaction volumes.
  • Economic integrity: This is regulated to cover real or legal persons, including both horizontal and vertical control relations, and commercial companies and businesses associated with these persons. It is important to note that the same real or legal person or persons with the right of management in more than one trading company is also considered within the scope of economic integrity under the Law. In this case, not only should the members of the board of directors be the same people, but management should be left to the same people within the board of directors. In summary, if both companies are managed by the same people, it will be accepted that there is economic integrity between them. This definition is included in the Law in order to determine who will be liable in case of a breach.
  • Electronic Commerce Information System (ETBIS): This is an information system established by the Ministry of Trade to register electronic commerce service providers and electronic commerce intermediary service providers, to collect electronic commerce data and produce statistical information through the processing of such data, and to enable registration and notification within the scope of the Law.

What else is new?

  • If the electronic commerce intermediary service provider becomes aware, by any means, that the content offered by the electronic commerce service provider is illegal: (I) it is necessary to remove such content without delay and notify the relevant public institutions and organisations about the illegal issue; (ii) otherwise, it is concluded that the electronic commerce intermediary service provider will be liable for illegal content.
  • The protection of personal data is left outside the scope of the Law based on the grounds that Law No. 6698 on the Protection of Personal Data also covers service providers and intermediary service providers.
  • The Ministry of Trade is authorised to (I) include and assign experts to the examination process as required, (ii) conduct examinations regarding technical matters such as algorithms, and (iii) obtain the information needed from the Information Technologies and Communication Authority in order to finalise complaints more rapidly and effectively.

Penalties:

  • The Law imposes an administrative fine of TRY 10,000 to TRY 100,000 (approximately EUR 555 – 5,550) for each illegality on electronic commerce intermediary service providers that are aware of the illegal content provided by the electronic commerce service provider and do not remove it.
  • An administrative fine of TRY 500,000 (approximately EUR 27,500) will be imposed on electronic commerce intermediary service providers that force an e-commerce service provider to sell products and services as part of a sales campaign, including a unilateral change in the sales price by the e-commerce intermediary service provider.
  • Except for electronic commerce environments included in a net transaction volume, a TRY 10 million (approximately EUR 555,000) penalty will be applied to electronic commerce intermediary service providers that provide access to each other’s electronic commerce environments and promote each other in these environments.
  • In the event that it provides an electronic environment for the publication of goods or service advertisements, an administrative fine of TRY 20 million (approximately EUR 1,110,000) will be imposed on electronic commerce intermediary service providers that allow for contracts to be concluded or orders placed for the supply of goods or services in the same environment.
  • If the violation is not terminated within the period given by the Ministry of Commerce, even if administrative fines have been applied, or if the same violation is repeated within one year from the date of the notification of the penalty, the fine will be doubled from the previous penalty.

Obligations of e-commerce intermediary service providers 

  • The obligations that will apply to e-commerce intermediary service providers have been divided into four groups based on their net transaction volumes as follows:
  • The obligations that apply to all;
  • The obligations that apply to those with a net transaction volume of over TRY 10 billion (approximately EUR 600 million) in a calendar year;
  • The obligations that apply to those with a net transaction volume of TRY 30 billion (approximately EUR 1.8 billion) and over 100,000 transactions, excluding cancellations and refunds, in a calendar year;
  • The obligations that apply to those with a net transaction volume of TRY 60 billion (approximately EUR 3.6 billion) and over 100,000 transactions, excluding cancellations and refunds, in a calendar year. 

The obligations that apply to all

The obligations that apply to those with a net transaction volume of over TRY 10 billion (approximately EUR 600 million)

The obligations that apply to those with a net transaction volume of TRY 30 billion (approximately EUR 1.8 billion)

The obligations that apply to those with a net transaction volume of TRY 60 billion (approximately EUR 3.6 billion)

The removal of illegal content:

 

  • Obligation to remove content provided by e-commerce intermediary service providers as soon as they learn it is illegal.

The requirement to obtain a licence (please see in detail below):

 

  • Obligation to obtain a license from the Ministry and renew its license to continue its activities.

Advertisement and Promotion budget limitations:

 

 

The percentages listed below, of the twelve-month average Consumer Price Index change rate of the net transaction volume for the same calendar year, can be spent on advertisements, promotions, rewards, points, coupons, gift certificates and similar opportunities. These budgets are as follows:

  • 2% for the TRY 30 billion portion
  • 3% for the portion over TRY 30 billion  

Restrictions with respect to electronic money and banking operations:

 

  • Prohibition of facilitating the provision of the services (including credits) of banks, financial leasing companies, factoring companies, finance companies and savings finance companies, except for payments, including those with credit cards, and prohibition from engaging in any activity to facilitate the acceptance for payment of e-money issuers within the same economic integrity.
  •  Requirement to terminate cooperation with financial institutions that have the same economic integrity.

Refraining from offering their own brands for sale:

 

  • Prohibition of offering goods that bear the trademark of persons with whom they share the same economic integrity with or have the right to use the brand in the e-commerce marketplaces where they offer intermediary services.

Promotion / Access limitation

  • Prohibition of providing access between its own electronic commerce environments.
  • Prohibition of promoting each other in these environments.

 

Prohibition of Exclusivity/ MFN:

 

  • The commercial relations of the e-commerce service provider, the offering of goods or services at the same or different prices through alternative channels, or advertising cannot be restricted.

 

 

Operation Restrictions:

 

  • Prohibition of engaging in the activities of goods transportation, freight forwarding organisation and the provision of postal service regarding its sales in the e-commerce marketplaces where it provides its intermediary service, its sales as an e-commerce service provider, or sales outside its own marketplace.

Requirements for presenting and verifying information:

 

  • Obligation to enable the electronic commerce service provider to provide the information in the documents required to be issued within the scope of the Tax Procedure Law.

 

Use of marketplace data

 

  • The e-commerce intermediary service provider and service receiver are obliged to use marketplace data only to provide intermediary services. The data cannot be used for competing with other intermediary service providers.

 

Advertisement services restriction:

  • Prohibition of making contracts or placing an order to supply goods or services in the same environment where it provides for the publication of goods or service announcements.

Refraining from using the brands of e-commerce service providers for promotional purposes:

 

  • Obligation to engage in marketing and promotion activities in online search engines by using its registered trademarks that constitute the main element of their registered domain names.

Making notifications:

  • Except for the shares registered in the stock exchange, the company's shareholders are obliged to report their share transfers and acquisitions reaching 5% or more to the Ministry of Trade within one month from the date it is recorded in the share register.
  • The establishment of a company, taking over the shares of an established company, or transferring such shares must be notified to the Ministry of Trade within one month from the registration of the establishment in the trade registry.

 

Refraining from unfair commercial practices:

 

  • Obligation to terminate unfair commercial practices under reasonable conditions.

 

Submitting reports to the Ministry:

  • Obligation to send the reports prepared by the independent audit firm to the Ministry.

 

 

 

The most outstanding change: Licence fees!  

Who will be subject to licence fees?

An electronic commerce intermediary service provider with a net transaction volume of TRY 10 billion and over one hundred thousand transactions excluding cancellations and returns in a calendar year must obtain a license from the Ministry of Trade and renew its license in order to continue its activities.

When should an application for a licence be made?

The application for a license must be submitted in the calendar year following the date of exceeding the limits. The license renewal application is made in March of each calendar year, provided that the thresholds are exceeded.

How much are Licence Fees?

Net Transaction Volume

Licence Fees

TRY 10–20 billion

0.03% of the amount exceeding TRY 10 billion

TRY 20–30 billion

0.5% of amount part exceeding TRY 20

billion

TRY 30–40 billion

1% of the amount exceeding TRY 30 billion

in addition to the above amount

TRY 40–50 billion

5% of the amount exceeding TRY 40 billion

TRY 50–55 billion

10% of the amount exceeding TRY 50 billion

TRY 55–60 billion

15% of the amount exceeding TRY 55

billion

TRY 60–65 billion

20% of the amount exceeding TRY 60

billion

Above TRY 65 billion

25% of the amount exceeding TRY 65 billion

 

Obligations of e-commerce intermediary service providers 

Obligations regarding e-commerce service providers do not apply to e-commerce service providers that derive half of their sales from non-e-commerce sales.

  • The obligations that apply to those with a net transaction volume of over TRY 10 billion in a calendar year and over 10 million transactions, excluding cancellations and refunds, in a calendar year are as follows:
    • obligations to limit the use of prescribed data are applied by analogy;
    • a report containing the detected infringements should be prepared and submitted to the Ministry;
    • the obligation to pay for a trade license.
  • The obligations that apply to those with a net transaction volume of over TRY 30 billion in a calendar year and over 10 million transactions, excluding cancellations and refunds, in a calendar year are as follows:
    • advertising and promotion spending limitations set for e-commerce intermediary service providers should be applied by analogy.
  • The obligations that apply to those with a net transaction volume of over TRY 60 billion in a calendar year and over 10 million transactions, excluding cancellations and refunds, in a calendar year are as follows:
    • banking and electronic money restrictions foreseen for e-commerce intermediary service providers should be applied by analogy.
    • the prohibition of making contracts or placing orders for the supply of goods or services in the same environment and the prohibition of not making transitions and promotions between these environments are applied by analogy.

 Enforcement and transitional provisions

The effective date of the Law is 1 January 2023. The effective date of the provision that the monetary thresholds stipulated in the Law will be increased each year according to the annual rate of change in the electronic commerce volume calculated using ETBIS data is 1 January 2024.

In addition, the obligation to obtain a license for e-commerce intermediary service providers and e-commerce service providers must be fulfilled as of 1 January 2025.

For more information please contact Bulut Girgin, Counsel, Head of Competition and Compliance, at bgirgin@gentemizerozer.com, and Sıla Dilaver, Associate, at sdilaver@gentemizerozer.com.