Ali Gül
Hukuk Bürosu

The Innovations Introduced to the E-Commerce Law and Their Potential Effects on the E-Commerce Sector

02.12.2022

INTRODUCTION

The Law Amending the Law on the Regulation of Electronic Commerce No. 7416 (“Amendment”) was accepted on July 1, 2022, and was published in the Official Gazette on July 7, 2022.

With the changes made in the law, the Amendment aims to prevent unfair competition and monopolization in e-commerce, facilitate the activities of new actors with the goal of entering the e-commerce market, and ensure the balanced and healthy growth of the e-commerce market, which has become increasingly important in our lives, especially with the impact of the pandemic. In addition to these, these changes also bring new obligations and regulations to Sellers and e-Marketplaces, which are the foundations of e-commerce. This article will explain these changes in detail.

NEW CONCEPTS

The Amendment introduces two new concepts to the Electronic Commerce Law: the electronic commerce environment and the Electronic Commerce Information System (ECIS).

The electronic commerce environment refers to all platforms involved in e-commerce activities, such as internet websites, mobile websites, or mobile applications. The Electronic Commerce Information System (ECIS), on the other hand, refers to the information system established by the Ministry of Trade for the collection and processing of all kinds of data related to electronic commerce, as well as for the registration of e-commerce service providers (hereinafter referred to as “Sellers”) and e-commerce platform service providers (hereinafter referred to as “e-Marketplaces”).

NEW OBLIGATIONS

1. ECIS Obligation:

The ECIS system, which was introduced into our lives with the Electronic Commerce Information System and Notification Obligations Communique, has been defined in the Law with the changes made. According to this definition, ECIS is an information system that facilitates the registration of Sellers and e-Marketplaces and the transfer of the necessary data related to their e-commerce activities to this system.

2. Obligations of Electronic Commerce Service Providers (Sellers):

An electronic commerce service provider is a Seller who concludes contracts or accepts orders for the supply of goods or services through e-commerce platforms or on their own e-commerce platforms. In this context, individuals or legal entities that sell on any platform considered as an “e-Marketplace,” or even those who sell on their own websites, are defined as electronic commerce service providers.

The primary obligation imposed on Sellers after the Amendment is the requirement to register with ECIS, as mentioned above. However, the Amendment also introduces other obligations for Sellers based on concepts such as “net transaction volume” and “economic integrity.”

One of these obligations concerns the marketing and promotion activities of Sellers. According to this, a Seller is prohibited from conducting online marketing and promotional activities on search engines without obtaining a written or electronic declaration of consent from individuals who are not part of their economic integrity but use the registered trademark in ECIS. To illustrate this obligation with an example: If an e-Marketplace like Hepsiburada, which is registered in ECIS, wants to advertise on Google using the name of a cosmetic brand that is not part of its economic integrity, it cannot do so without obtaining written consent from that cosmetic brand. In other words, Hepsiburada cannot use the brand’s lipstick in its advertising on platforms like Google without obtaining written consent from the brand, even if it sells the brand’s lipstick on its website.

Another obligation is related to net transaction volume. In this regard, it is necessary to first define what net transaction volume means for Sellers. For Sellers, net transaction volume refers to the total of final invoices or documents serving as invoices that must be issued for the contracts and orders made through their e-commerce platforms during a certain period. These e-commerce platforms are not considered as marketplaces.

Within the framework of net transaction volume, certain monetary thresholds have been set for Seller obligations. For example, if a Seller’s net transaction volume in a calendar year exceeds 10 billion Turkish Liras, and the number of transactions, excluding cancellations and returns, exceeds 10 million, the Seller will have obligations such as ensuring data portability, providing access between their e-commerce platforms, obtaining an electronic commerce license, and paying a license fee. As the Seller’s net transaction volume increases, their obligations will also increase. Therefore, every electronic commerce provider should assess their net transaction volume and determine the obligations they need to comply with accordingly.

With the Amendment, Sellers are also required to keep information, documents, and records related to e-commerce transactions for a period of 10 years from the date of the transaction.

Another important point to note regarding Seller obligations is where they generate the majority of their total sales revenue. If a Seller generates more than half of its total sales revenue from sales outside of e-commerce, they will not be subject to obligations outside of ECIS registration. Therefore, when determining Seller obligations, all activities must be carefully evaluated.

3. Obligations of Electronic Commerce Platform Service Providers (e-Marketplaces)

a.Prohibition of Selling Their Own Brands

One of the fundamental obligations imposed on E-Marketplaces is the “prohibition of selling their own brands.” According to this regulation, E-Marketplaces are prohibited from offering for sale goods bearing their own brand or goods for which they have the right to use the brand, even if they do not own the brand, in the e-commerce marketplace where they provide intermediary services.

For example, Trendyol is an e-Marketplace. Trendyolmilla products are goods bearing the Trendyol brand. With the new regulation that came into effect starting from January 1, 2023, Trendyol will no longer be allowed to facilitate the sale of Trendyolmilla products. However, if an e-Marketplace generates more than half of its total sales revenue from non-e-commerce sales, it will not be subject to this obligation.

b.Removal of Unlawful Content

E-Marketplaces are not obligated to control the content provided by Sellers. Likewise, e-Marketplaces are not required to conduct legal compliance checks on this content and the goods or services related to this content.

In accordance with the legal changes, an E-Marketplace must promptly remove the content in question and report the legal violation to the relevant public institutions upon becoming aware of the illegality due to a complaint. Failure to comply with this obligation may result in administrative fines for the E-Marketplace, ranging from 10,000 to 100,000 Turkish Liras per content. Therefore, E-Marketplaces that may fall victim to unlawful content/products or services should closely monitor and address such issues.

E-Marketplaces have been made responsible for complaints from third parties claiming to be the right holders of a product sold within their platform. Following a complaint based on information and evidence of a violation of the intellectual and industrial property rights of the rights holder, the e-Marketplace is obliged to remove the product from publication and notify the Seller selling the product. However, if the Seller provides information or evidence to the contrary regarding the complaint, the E-Marketplace will republish the product in question. Otherwise, administrative fines ranging from 10,000 to 100,000 Turkish Liras per content have been stipulated for the e-Marketplace.

One of the most common examples of violations of intellectual and industrial property rights is the production and sale of counterfeit products. For instance, manufacturing and selling imitation bags of the luxury brand Louis Vuitton would constitute an infringement of industrial rights. Similarly, the use of the logo of another registered brand, like Nike, by another sports shoe seller would also be a violation of industrial rights. In this context, if third parties were to sell counterfeit Louis Vuitton bags on a platform like Morhipo, which is an e-Marketplace, and if Morhipo becomes aware of this, those products would be removed from publication. However, if Morhipo is not aware of this situation, it would not have any responsibility.

The application of this article may present various challenges, and it is clear that criteria and mechanisms for its implementation need to be established. Therefore, the issuance of regulations governing these matters is of significant importance.

c.Obligations Related to Data Usage

Another obligation imposed on e-Marketplaces is related to data usage. An e-Marketplace must provide technical means for Sellers to access the data collected during the sales carried out by the Seller while providing its services, and for the data resulting from the processing of these data, all of which are done at no charge and effectively. These data may include information provided by the Seller to the e-Marketplace, such as product listings and product photos, as well as stock information for the products and consumer reviews for the products, and information regarding the consumers who purchased the products.

For example, a technology brand like Apple, which sells its products on an e-Marketplace like Amazon, can freely access consumer reviews about its own brand on Amazon resulting from its sales on the platform and use this data for its own commercial activities. Moreover, Apple can access the data collected and processed by Amazon during these sales without having to pay any fees. As stipulated in the law, Amazon must provide effective and free technical capabilities for these purposes.

d.Net İşlem Hacmine Göre Değişen Yükümlülükler

In addition to the obligations mentioned above, certain new obligations have been introduced for e-Marketplaces based on their annual net transaction volume. These obligations are elaborated in detail in the Law text. For example, one of the most noteworthy obligations among these is related to advertising expenses. Accordingly, an e-Marketplace with an annual net transaction volume exceeding 30 billion Turkish liras will be obliged to make advertising expenditures within the limits specified in the Law and provide opportunities such as promotions, rewards, points, coupons, gift vouchers, etc. For e-Marketplaces with an annual net transaction volume not exceeding 30 billion Turkish liras, such an obligation will not apply.

Another notable obligation concerns the new-generation financial applications that we have recently seen in many e-Marketplaces. With this obligation, e-Marketplaces with an annual net transaction volume exceeding 60 billion Turkish liras are restricted in the financial field. In this regard, an e-Marketplace that exceeds the specified financial threshold will not be able to provide “wallet services.” Instead, it will be required to offer electronic money services through a licensed electronic money institution. Another obligation imposed on e-Marketplaces with an annual net transaction volume exceeding 60 billion Turkish liras concerns the transportation sector. These companies are prohibited from engaging in cargo transportation, transportation organization, and postal service provision activities.

4.Unfair Commercial Practices in Electronic Commerce

With the Law Amendment, it has been stipulated that practices carried out by e-Marketplaces which substantially adversely affect the commercial activities of the Seller they provide intermediary services for will be considered unfair commercial practices, and engaging in such practices is prohibited. The Law also provides a list of practices that will be deemed unfair commercial practices in all cases.

For example, practices such as pressuring the Seller to participate in promotional sales, failing to make payments to the Seller within 5 business days from the date the sale price of the product is received by the e-Marketplace and the order is delivered to the buyer, or charging the service fee from the service provider contrary to the intermediary contract have been considered unfair commercial practices with the new Law regulation.

5.Electronic Commerce License

One of the most important innovations brought by the Law Amendment is the electronic commerce license. According to this innovation, an e-Marketplace with a net transaction volume of over 10 billion Turkish liras and a transaction count of over 100,000, excluding cancellations and returns, in a calendar year must obtain a license from the Ministry of Commerce to continue e-commerce activities, and they must renew their license every year in March as long as they exceed this threshold. The 10 billion Turkish liras is the minimum threshold introduced by the Law. Any e-Marketplace with a net transaction volume exceeding 10 billion Turkish liras is obliged to obtain an electronic commerce license by paying the license fee determined in accordance with their annual net transaction volume.

When calculating the net transaction volume of an e-Marketplace, calculations will be made based on ETBIS records, and the license fee will be determined within the thresholds specified in the Law according to the net transaction volume found. It is mandatory to pay this fee to obtain or renew a license.

At this point, the most noteworthy aspect is that the relevant article of the Law will come into effect on January 1, 2025. Therefore, it is evident that the regulation is actually targeting the net transaction volume that Sellers will have in 2025. It is known that enterprises like Trendyol and Hepsiburada exceeded the 10 billion Turkish lira limit as of 2021.[1] However, there are many popular e-Marketplaces in the market currently with a turnover of less than 10 billion Turkish liras (such as Amazon Turkey, Çiçeksepeti, etc.).

The license fee will be calculated within the limits specified in the Law. For example, an e-Marketplace company that is obliged to obtain a license and has an annual net transaction volume of 15 billion Turkish liras will obtain a license by paying a fee of one-thousandth of three percent of the portion exceeding 10 billion. In other words, this e-Marketplace with an annual net transaction volume of 15 billion Turkish liras can become a licensee by paying 1.5 million Turkish liras. If an e-Marketplace’s annual net transaction volume is 60 billion Turkish liras, the license fee to be paid is fifteen percent of the portion exceeding 50 billion. In this case, this e-Marketplace can become a licensee by paying 1.5 billion Turkish liras.

For instance, it is known that Trendyol’s revenue exceeded 50 billion Turkish liras as of 2021.[2] As of January 1, 2025, Trendyol will be obligated to obtain a license, and it is clear that its revenue at that time will also exceed 50 billion, which means that the license fee it will have to pay will increase. 

Moreover, considering the increasing e-commerce and, consequently, e-Marketplace usage with each passing day, it can be said that many e-Marketplaces that we frequently hear about and even use in our daily lives will be subject to the obligation to obtain a license in 2025.

The calculation of net transaction volume used to determine the license fee will not include sales to foreign countries through the e-commerce Marketplaces for which the license is applied.

Exclusively e-Marketplaces where products bearing the brand of the e-Marketplace are offered for sale through agreements such as dealerships and agencies are exempt from obtaining an electronic commerce license. The law has granted these platforms an exemption from the license requirement.

CRIMINAL PROVISIONS

Under the 7416 Law, changes have been made to Article 12 titled “Criminal Provisions” of the Law No. 6563, and new criminal provisions parallel to the obligations explained above have been added.

With the new third paragraph added to Article 12, for violations falling within the scope of this paragraph, Sellers and e-Marketplaces will be given a period of 60 days in the first stage, 30 days in the second stage, and 15 days in the final stage to eliminate the violations, and increasing amounts of administrative fines will be imposed at each stage. If the violation is not rectified as a result of these stages, the Ministry may decide to remove the content from the relevant internet addresses or block access.

The authority to impose administrative fines specified in this article belongs to the Ministry of Commerce. The Ministry will exercise this authority by delegating it to the relevant general directorate of the Ministry at the central level and the provincial directorates of the Ministry at the provincial level. The information about which specific general directorate of the Ministry is responsible is not provided. Therefore, it is not clear which unit of the Ministry of Commerce will be contacted by companies if they engage in actions that could lead to fines. Given that the new Law is expected to enter into force on January 1, 2023, it is not yet clear whether the Ministry of Commerce will establish a new board or assign an existing unit for penalties.

CONCLUSION

  • With the aim of aligning with European Union legislation, these changes have introduced numerous new obligations for Sellers, defined as electronic commerce service providers, and e-Marketplaces, defined as electronic commerce intermediary service providers.
  • In this context, e-Marketplaces and Sellers are primarily required to register with the ETBIS, and new responsibilities for monitoring these platforms have been assigned to the Ministry of Commerce.
  • One of the changes that will have the most significant impact on the e-commerce sector is the prohibition of e-Marketplace companies from selling brands within their economic entity or brands for which they have usage rights on these e-Marketplaces.
  • E-Marketplaces are obligated to remove and notify the right holder if they provide content that violates the intellectual and industrial property rights of a third party upon the complaint of the right holder.
  • Starting from January 1, 2025, e-Marketplaces are required to obtain an “electronic commerce license” to continue their intermediary services. The fee for this license will be determined based on the e-Marketplace’s annual turnover. E-Marketplaces will comply with the obligations introduced until January 1, 2024, and from January 1, 2025 onwards, they will obtain an electronic commerce license parallel to their annual turnover.
  • The Law added new examples of unfair commercial practices and regulated administrative fines and sanctions that may be imposed against e-Marketplaces for these practices. Thus, e-Marketplaces that engage in practices that could adversely affect the commercial activities of Sellers are deemed unfair commercial practices and subject to severe sanctions.
  • With the rapid development, changes, and the emergence of new actors in the e-commerce sector, driven by digitization and the impact of the pandemic, the regulation of the sector with a new and comprehensive Law, considering the problems that have arisen and may arise in the sector, is accurate to protect the commercial interests of each actor operating in this sector and to ensure a fair competitive environment.
  • E-Marketplaces and Sellers should develop a roadmap for themselves in line with all these changes, determining the new rules they need to comply with financially and operationally. Throughout these processes, the effective dates of the obligations and their annual net transaction volume at these dates should be taken into consideration.

[1] En Büyük 100 İnternet Şirketi, Fast Company Türkiye, February – March 2022:13, 2022, https://fastcompany.com.tr/dergi/en-buyuk-100-internet-sirketi-2/ Date Accessed: 1 September 2022

[2] Fast Company Türkiye, Date Accessed: 1 September 2022