Recent developments
On 1 July 2022, the Turkish Parliament adopted the Law on the Amendment of the Law on the Regulation of Electronic Commerce (“Law“). The Law introduces significant obligations to intermediary service providers and service providers. Most of the provisions of the Law will be effective as of 1 January 2023. You may access the Law here (in Turkish).
Summary of the Amendments
1. Definitions
In addition to the current intermediary service provider and service provider definitions, the Law introduces definitions for “electronic commerce intermediary service provider” and “electronic commerce service provider.” The Law also provides definitions of “net transaction volume” and “economic integrity,” as well as “electronic commerce marketplace” and electronic commerce environment,” all of which are frequently used in the Law.
- Electronic commerce intermediary service provider: It is defined as “the intermediary service provider that enables placing orders or executing agreements pertaining to provision of electronic commerce service providers’ goods or services in the electronic commerce marketplace.”
- Electronic commerce service provider: It is defined as “the service provider that executes agreements or receives orders on its goods and services in the electronic commerce marketplace or in its own electronic commerce medium.” As per this definition, electronic commerce service providers can conduct sales activities in their own electronic commerce medium as well as in the marketplace of an electronic commerce intermediary service provider.
- Electronic commerce environment: It is defined as “platforms such as website, mobile site or mobile application where electronic commerce activities are carried out.” The environments in which electronic commerce service providers conduct their services as well as the environments of the electronic commerce intermediary service providers can be considered as electronic commerce environments.
- Electronic commerce marketplace: It is defined as “the electronic commerce medium of which the electronic commerce intermediary service provider provides its intermediary services.” The medium on which electronic commerce intermediary service providers provide their services is covered in this context.
- Net transaction volume: It is defined as “the sum of the final invoice values or the values of the documents substituting the invoice, which are required to be issued by all service providers for electronic commerce intermediary service providers in electronic commerce marketplaces where they provide intermediary services; and as for electronic commerce service providers, for the sales made in a certain period in its own electronic commerce medium that do not have characteristics of an electronic commerce marketplace, excluding cancellations and returns.” Net transaction volume is a frequently used definition when determining the obligations in the Law. In this context, to define it briefly (as stated in the preamble of the article), the net transaction volume includes the total of the final invoice or documents substituting the invoice, including all taxes, funds, fees and the like. All marketplaces and environments will be taken into account when determining the net transaction volumes of electronic commerce intermediary service providers with more than one marketplace as well as service providers with more than one environment.
- Economic integrity: It is defined as “a person’s directly or indirectly holding at least 25% of the shares or majority of the voting rights of a commercial company or holding shares enabling it to obtain resolutions to manage the commercial company; having the rights to elect the majority of members that can obtain resolutions in the management organ per the articles of association; constituting the majority of the voting rights alone or along with other shareholders apart from its own voting rights as part of an agreement or holding the commercial company under its control within the scope an agreement or, depending on these circumstances, the relationship between all commercial companies and businesses belonging to this person, or the management of more than one commercial company by the same person or persons, regardless of whether they are shareholders or not.” This definition is especially taken into account in terms of obligations imposed on electronic commerce intermediary service providers which we have explained below. The definition aims to cover both horizontal and vertical control relations. Whether the companies are managed by the same person(s), regardless of the ownership is also taken into account. Pursuant to the example provided in the preamble, if person (X) is the only member of the board of directors of companies (A) and (B), which are different legal entities operating in completely different fields, the said companies are considered in economic integrity. In the assessment, whether the persons are in sufficient number to have the majority to take decisions in the management organ or whether this person or persons have been determined as executive members or managers should be taken into account. If it can be concluded that the companies in question are managed by the same individual, such companies will be considered to have economic integrity.
- Authority of the Ministry of Commerce (“Ministry”)
Pursuant to Article 5 of the Law, the Ministry may appoint experts during their investigations where there is a need for special expertise and technical knowledge. Accordingly, the Ministry can provide examinations on technical issues such as algorithms of the companies.
In addition, it is now possible for the Ministry to receive information from the Information Technologies and Communication Authority regarding the senders of messages in order to increase the controls in the processes on sending of electronic commercial messages and to identify the senders of electronic commercial messages. It can be concluded that in the future, the inspections and examinations on sending of electronic commercial message is likely to increase.
The retention periods of the intermediary service providers and service providers are increased from 3 years to 10 years.
3. Obligations
Obligations of Electronic Commerce Intermediary Service Providers
The obligations of electronic commerce intermediary service providers have been determined gradually according to their net transaction volumes. In this context, the obligations are divided into four categories: (i) obligations applied to all electronic commerce intermediary service providers; (ii) obligations applied to electronic commerce intermediary service providers with a net transaction volume of over TRY 10 billion (approximately USD 600 million) in a calendar year; (iii) obligations applied to electronic commerce intermediary service providers with a net transaction volume of TRY 30 billion (approximately USD 1.8 billion) and a number of transactions over 100,000, excluding cancellations and refunds, in a calendar year; (iv) obligations applied to electronic commerce intermediary service providers with a net transaction volume of TRY 60 billion (approximately USD 3.6 billion) and a number of transactions 100,000, excluding cancellations and refunds, in a calendar year.
Obligations applicable to all electronic commerce intermediary service providers
| Obligation | Sanction |
| Removal of illegal content: Pursuant to Article 3 of the Law, intermediary service providers are not liable for unlawful content provided by service providers. This non-liability applies to all intermediary service providers, regardless of whether or not they are electronic commerce intermediary service providers. If electronic commerce intermediary service providers become aware that the content provided by electronic commerce service providers are illegal, they are required to remove such content without delay and notify the relevant public institutions and organizations. It is not clear whether an active “monitoring” by the electronic commerce intermediary service provider is required. Moreover, the electronic commerce intermediary service provider is also obliged to remove the product of the electronic commerce service provider, upon the right holder’s complaint based on information and documents regarding the violation of intellectual and industrial property rights, and to notify electronic commerce service provider and the right holder. However, the electronic commerce intermediary service provider is also obliged to republish the same content based on information and documentation that prove otherwise. | Administrative fine of TRY 10,000 (approximately USD 600) to TRY 100,000 (approximately USD 6,000) per violation |
| Not offering their own brands for sale: As per Additional Article 2/1(a), electronic commerce intermediary service providers cannot offer for sale or act as an intermediary in the sale of goods bearing the brand of itself or the persons with whom it has an economic integrity or have the right to use the brand in the electronic commerce marketplaces where it provides intermediary services. In the event that these goods are offered for sale in different electronic commerce environments, it is prohibited to provide access between these mediums and to promote each other. In this context, electronic commerce intermediary service providers are prevented from selling their own brands in their own marketplaces. The provision does not apply to goods bearing the trademark of persons who derive more than half of the total sales revenue from sales other than electronic commerce, or to goods for which they have the right to use the brand. | Administrative fine of 5% of the net sales amount for the calendar year preceding the date of the violation |
| Presenting and verifying the information of electronic commerce service providers: Pursuant to the new Additional Article 2/1(b), electronic commerce intermediary service providers must enable electronic commerce service providers to provide the information required within the scope of the Tax Procedure Law on the electronic commerce marketplace where the sale is made. As per Additional Article 2/1(ç), electronic commerce intermediary service providers must verify the electronic commerce service provider’s introductory information through the documents provided by them and through the publicly available electronic systems of relevant institutions. | For violations of Additional Article 2/1(b), an administrative fine of five per ten thousand of the net sales amount of the calendar year preceding the date of the violation, provided that the fine is not less than TRY 100,000 For violations of Additional Article 2/1(ç), an administrative fine of TRY 10,000 (approximately USD 600) per violation |
| Not using the brands of electronic commerce service providers for promotional purposes: Pursuant to the Additional Article 2/1(c), if the electronic commerce intermediary service provider does not receive the electronic commerce service provider’s positive declaration of will, in writing or electronically, it cannot engage in marketing and promotion activities in online search engines by using the registered brands that constitute the main element of the domain names registered to ETBIS of the electronic commerce service provider. This provision aims to prevent electronic commerce intermediary service providers from promoting themselves in search engines by using electronic commerce service providers’ names or brands without the latter’s knowledge and to prevent reduction of traffic to the electronic commerce service providers’ own websites. | Administrative fine of TRY 10,000 (approximately USD 600) to TRY 100,000 (approximately USD 6,000) per violation |
| Unfair commercial practices: With the new Additional Article 1, unfair commercial practices in electronic commerce are prohibited. Practices of electronic intermediary commerce service provider that disrupt or are likely to disrupt the commercial activities of the electronic commerce service provider to which it provides intermediary services, which reduce the latter’s ability to make a reasonable decision or cause the electronic commerce service provider to become a party to a commercial relationship that it would not normally be a party to, by enforcing it to take a certain decision, shall be deemed unfair. In the relevant article, some situations that constitute unfair commercial practices are also listed. For instance, forcing the electronic commerce service provider to purchase services from a certain delivery company is deemed as unfair commercial practice. | Administrative fines are stipulated for each violation, per case and per electronic commerce service provider. |
Additional obligations applied to electronic commerce intermediary service providers with a net transaction volume of over TRY 10 billion (approximately USD 600 million) in a calendar year
| Obligation | Sanction |
| Obtainment of electronic commerce license: Electronic commerce intermediary service providers with a net transaction volume of TRY 10 billion and a number of transactions over 100,000, excluding cancellations and refunds, in a calendar year, must obtain and renew an electronic commerce license (while evaluating whether the threshold has been exceeded, net transaction volumes and transaction numbers of electronic commerce intermediary service providers within economic integrity are taken into account). Calculation of the license fee*:
*Transactions made abroad are not taken into account during calculations. | For violations of Additional Article 4/1, an administrative fine of TRY 10 million (approximately USD 600,000) is imposed and time is provided to remedy the violation. For noncompliance, the penalties are increased gradually and if the violation is not remedied despite the warnings, the Ministry may block access to the website. An objection can be made against the access-blocking decision to the criminal judgeship of peace. The decisions of the criminal judgeship of peace can also be appealed through the procedure set forth in the Criminal Procedure Law. |
| Limitations on the use of data: As per the new Additional Article 2/2(a), an electronic commerce intermediary service provider is obliged to use the data obtained from the electronic commerce service provider and the buyer only for the purpose of providing intermediary services. Electronic commerce intermediary service providers cannot use such data to compete with electronic commerce service providers in the electronic commerce marketplaces or other electronic commerce environments where it provides intermediary services. Companies with which it has an economic integrity is also subject to this evaluation. Pursuant to the Additional Article 2/2(b), electronic commerce intermediary service providers are obliged to provide technical means for the electronic commerce service provider to carry the data obtained due to its sales free of charge, and to provide free and effective access to these data and the processed data obtained from them. | For violations of Additional Article 2/2(a), an administrative fine of 10% of the net sales amount of the calendar year preceding the date of the violation For violations of Additional Article 2/2(b), an administrative fine of TRY 500,000 (approximately USD 30,000) per electronic commerce service provider |
| Not providing transition between mediums: In accordance with the Additional Article 2/2(c), electronic commerce intermediary service providers cannot provide access between their own electronic commerce mediums and cannot promote each other in these mediums. This obligation does not apply to transitions between electronic commerce environments that are included in the net transaction volume. The companies with which it has an economic integrity is also subject to this restriction. | Administrative fine of TRY 10 million (approximately USD 600,000) |
| Notification of changes in the shares: In accordance with the Additional Article 2/2(d) and (d), electronic commerce intermediary service providers must notify the Ministry of share transfers or acquisitions of company partners reaching 5% or more, excluding the shares registered in the stock exchange, within one month upon the date transfer or acquisition of shares that achieve these rates are recorded in the share register. If the electronic commerce intermediary service provider establishes a company, takes over the shares of the established company or transfers these shares, it is obliged to notify the Ministry of these transactions within one month from the registration of the establishment of the company to the trade registry and from the date the transfer is recorded to the share register. | Administrative fine of TRY 1 million (approximately USD 60,000) per notification that is not made |
| Submission of reports to the Ministry: In accordance with the Additional Article 2/2(e), electronic commerce intermediary service providers are obliged to send to the Ministry the audit reports prepared by the independent audit institution. The report shall include the activities, management and organizational structure of the electronic commerce intermediary service provider, the current shareholders and their share ratios, shareholding ratios in its subsidiaries and affiliates, the information of the person in which it is in economic integrity, its financial status including financial statements, and its compliance with certain obligations of the law. In accordance with the Additional Article 2/2(f), an electronic commerce intermediary service provider must also send to the Ministry a report that includes the procedures for the detection of illegal content provided by the electronic commerce service providers and the detected violations. | Administrative fine of TRY 1 million (approximately USD 60,000) for noncompliance with Additional Article 2/2(e) For violations of Additional Article 2/2(f), an administrative fine of five per ten thousand of the net sales amount of the calendar year preceding the date of the violation, provided that the fine is not less than TRY 100,000 |
Additional obligations applied to electronic commerce intermediary service providers with a net transaction volume of TRY 30 billion (approximately USD 1.8 billion) and a number of transactions over 100,000, excluding cancellations, and refunds in a calendar year
| Obligation | Sanction |
Advertisement and promotion expenditure: As per new Additional Article 2/3(a) and (b), certain limits are introduced to the advertising expenditure and promotion expenditure*. The calculation is as follows:
The budget determined for advertising expenditures constitutes the limit of advertising expenditures of electronic commerce intermediary service providers and electronic commerce service providers they have economic integrity. One-fourth of the calculated expenditure can be used in each quarter. Similar to the advertising expenditure, the expenditure budget for promotions and similar opportunities constitutes the total discount budget that can be applied to the buyers and electronic commerce service providers by the electronic commerce intermediary service provider and persons with whom it has economic integrity. One-fourth of the calculated expenditure can be used in each quarter. *The promotion expenditure includes promotions, rewards, points, coupons, gift certificates and similar opportunities. | In case of violation of Additional Article 2/3(a) and (b), an administrative fine of ten times the amount exceeding the limits, provided that it is not less than 10% of the upper limit determined in the provisions |
| Non-restriction of electronic commerce service providers’ operations: As per the Additional Article 2/3(c), electronic commerce service providers cannot restrict electronic commerce service provider’s commercial relations, its provision of goods or services through alternative channels on the same or different prices or its advertising, and they cannot enforce them to procure goods or service from anyone. Moreover, electronic commerce service providers cannot include provisions in their agreements that allow such activities. | For violations of Additional Article 2/3(c), an administrative fine of TRY 250,000 (approximately USD 15,000) per electronic commerce service provider that is subject to an unfair commercial practice |
Additional obligations applied to electronic commerce intermediary service providers with a net transaction volume of TRY 60 billion (approximately USD 3.6 billion) and a number of transactions over 100,000, excluding cancellations and refunds, in a calendar year
| Obligation | Sanction |
| Restrictions on electronic money and banking operations: As per Additional Article 2/4(a), except for payments, including those with credit cards, electronic commerce intermediary service providers may 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 with them. Therefore, the electronic commerce intermediary service providers will need to terminate their cooperation with these financial institutions. As per Additional Article 2/4(b), the electronic commerce intermediary service providers cannot engage in any activity to facilitate the acceptance for payment of e-money issued by e-money issuers within the same economic enterprise. Therefore, these e-monies cannot be used to make payments on these electronic commerce intermediary service platforms or any other activity to facilitate the acceptance of these e-monies as payment instruments on these platforms, including facilitation of e-money account opening, provisions of funds to the e-money issuer. Accordingly, the electronic commerce intermediary service platforms preferring to accept payments via e-money will need to outsource e-money operations to e-money issuers that are not in the same economic enterprise with them. Electronic commerce service providers may not provide any services relying on the “closed network/circuit” exemption, or procure such services from the institutions that are not in the same economic enterprise with them. Accordingly, the electronic commerce intermediary service providers are not be able to engage in “wallet” type services offering themselves or through institutions that are in the same economic enterprise with them, and they will need to procure such services from the institutions that are not in the same economic enterprise with them.The obligations listed here will also apply to electronic commerce service providers included in the net transaction volume of the electronic commerce intermediary service provider and electronic commerce service providers within their economic integrity and operating in the electronic commerce marketplace. | For violations of Additional Article 2/4(a) and (b), an administrative fine of TRY 10 million (approximately USD 600,000) is imposed and time is provided to remedy the violation. For noncompliance, the penalties are increased gradually and if the violation is not remedied despite the warnings, the Ministry may block access to the website. An objection can be made against the access-blocking decision to the criminal judgeship of peace. The decisions of the criminal judgeship of peace can also be appealed through the procedure set forth in the Criminal Procedure Law. |
| Restriction of operations: As per the Additional Article 2/4(c), electronic commerce intermediary service providers cannot 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. | For violations of Additional Article 2/4(c), an administrative fine of TRY 10 million is imposed and time is provided to remedy the violation. For noncompliance, the penalties are increased gradually and if the violation is not remedied despite the warnings, the Ministry may block access to the website. An objection can be made against the access-blocking decision to the criminal judgeship of peace. The decisions of the criminal judgeship of peace can also be appealed through the procedure set forth in the Criminal Procedure Law. |
| Requirements on publication: As per Additional Article 2/4(ç), if an electronic commerce intermediary service provider provides an electronic environment for the publication of goods or service announcements, it cannot allow for the conclusion of agreements or placing orders for the supply of goods or services in the same environment. If these services are provided in different electronic environments, they cannot provide access between these environments and cannot promote each other. | For violations of Additional Article 2/4(ç), an administrative fine of TRY 20 million (approximately USD 1.2 million) |
Obligations on Electronic Commerce Service Providers
No separate obligations are introduced for electronic commerce service providers. The law states that the obligations on electronic commerce intermediary service providers will be applicable by analogy. An important point is that the obligations regarding electronic commerce service providers will not be applied to electronic commerce service providers that derive half of their sales from sales other than electronic commerce.
As a general requirement envisaged for all the electronic commerce service providers, if the electronic commerce service provider does not receive the electronic commerce service provider’s positive declaration of will, in writing or electronically, it cannot engage in marketing and promotion activities in online search engines by using the registered brands that constitute the main element of the domain names registered to ETBIS of the electronic commerce service providers with which they do not have an economic integrity. The other obligations are stipulated based on certain thresholds.
Additional obligations applied to electronic commerce service providers with a net transaction volume of TRY 10 billion (approximately USD 600 million) and a number of transactions over 10 million, excluding cancellations and refunds, in a calendar year
- Obligations regarding the restriction of the use of data stipulated in Additional Articles 2/2(a) and (b) will also apply to electronic commerce service providers by analogy.
- In accordance with Additional Article 2/2(f), the electronic commerce service providers must prepare a report and submit to the Ministry, which includes the procedures for the detection of illegal content and the violations detected as a result.
- The electronic commerce service providers are obliged to pay the electronic commerce license fee in accordance with the Additional Article 4. The license fee is calculated as described above. Sales of individuals within economic integrity are not taken into account when calculating the thresholds. Sales made abroad are not taken into account when calculating the license fee.
Additional obligations applied to electronic commerce service providers with a net transaction volume of TRY 30 billion (approximately USD 1.8 billion) and a number of transactions over 10 million, excluding cancellations and refunds, in a calendar year
- Obligations regarding the restriction on advertisement and promotion expenditure stipulated in Additional Article 2/3(a) and (b) will also apply to electronic commerce service providers by analogy.
Additional obligations applied to electronic commerce service providers with a net transaction volume of TRY 60 billion (approximately USD 3.6 billion) and a number of transactions over 10 million, excluding cancellations and refunds, in a calendar year
- Obligations regarding the restriction on banking and electronic money operations stipulated in Additional Article 2/4(a) and (b) will also apply to electronic commerce service providers by analogy.
- Obligations regarding non-restriction of placing orders in case of publication of goods or service announcements and not providing access between these environments and not promoting each other as stipulated under Additional Article 2/4(ç) will also apply to electronic commerce service providers by analogy.
Sanctions for noncompliance with obligations set forth in the Article 6 of the Law stipulates various sanctions by specifically indicating electronic commerce service providers, but some sanctions have been determined only for electronic commerce intermediary service providers. Therefore, such sanctions may be applicable to the electronic service providers by analogy.
Transition Period
- The provisions other than the ones listed below will be applicable as of 1 January 2023:
– Additional Article 2/3(a) and (b) stipulating advertising and promotion expenditures will enter into force on 1 January 2023 and will be applicable to 2022 net transaction volumes.
– Additional Article 2/2(b) on data portability and Additional Article 2/10 and Additional Article 4/6, which stipulates the obligation of announcement on the Ministry, will enter into force on 1 January 2024.
- Electronic commerce intermediary service providers have to comply with the Additional Article 2/1(a) that prohibits the sale of their own brands, Additional Article 2/4(a) and (b) that restricts activities related to banking and electronic money, and Additional Article 2/4(c) that restricts activities related to delivery of goods, until 1 January 2024.
- Obligations for obtaining an electronic commerce license shall be fulfilled as of 1 January 2025.
- Intermediation agreements (between intermediary service providers and service providers in electronic commerce marketplaces) executed before the entry into force of the Law must be aligned with the Law within six months.
Conclusion
The Law introduces significant requirements for electronic commerce service providers and electronic commerce intermediary service providers. The Law will affect not only these companies, but also the financial entities, payment companies and electronic money issuers within their economic integrity due to the “economic integrity” definition in the Law. Companies affected by the Law should initiate their harmonization process as soon as possible.
