Expected E-Commerce Regulation is Published
Expected E-Commerce Regulation is Published
The “Regulation on Electronic Commerce Intermediary Service Providers and Electronic Commerce Service Providers” ["Regulation"] was published in the Official Gazette no. 32058 dated December 29, 2022 and abolished the previous Regulation on Electronic Commerce Service Providers and Intermediary Service Providers published in the Official Gazette dated 26.08.2015 and numbered 29457. Detailed rules and principles were introduced for the activities of e-commerce service providers ["Service Provider"] and e-commerce intermediary service providers ["Intermediary"] in line with the Law Amending the Law on the Regulation of Electronic Commerce Law no. 7416 ["Law"] published in the Official Gazette dated July 7, 2022. This Regulation aims to prevent unfair practices against sellers operating in the field of e-commerce and to ensure the development of e-commerce by creating an effective and fair competition environment. The Regulation entered into force as of January 1, 2023, apart from some exceptions set out below.
In this article, we will review the significant provisions of the Regulation.
Obligation to Provide Information and Verification
Service Providers are now obliged to keep their full identifying information such as trade name, business name, registered trademark name, KEP address, or tax identification number on the home page of their e-commerce medium and in the area allocated to them by the Intermediary. In addition, Intermediaries are obliged to verify this information through the open-to-access electronic systems of the relevant institutions, or if this is not possible, through the documents obtained from the Service Provider, and not to provide intermediary services if they cannot verify it. This verification will be made within the first 3 months of each calendar year and if it is determined that the information is outdated, the Service Provider will be notified, and the information will be updated within a maximum of 3 business days. Service Providers will also be obliged to make updates regarding the changes in their information and forward them to the relevant Intermediary until the end of the day following the date of the change.
Preventing Unfair Practices and Countering Unlawful Content
The Regulation introduces new obligations for Intermediaries to play a more active role in preventing unlawful content. Accordingly, in order to secure the rights of sellers in e-commerce marketplaces and to prevent them from being subjected to unfair practices, Intermediaries will be obliged to remove such content and to notify the Service Provider and relevant organizations within 48 hours of becoming aware of the unlawful nature of the content.
Complaints regarding infringement of intellectual industrial property rights are also regulated within this scope, and the Intermediary is required to remove the product subject to the complaint from publication within 48 hours from the receipt of the applications made via the “internal communication system”, notary public or KEP. Likewise, the Service Provider affected by the infringement application can object to the application in the same way along with the relevant information mentioned in the Regulation, and if it is justified in its objection, the Intermediary will re-publish the product subject to the complaint within 24 hours following the objection.
In order to regulate the commercial relations between Intermediaries and Service Providers, the Regulation sets out the minimum requirements of the intermediary agreement. In the event of an amendment to the agreement, the Intermediary shall notify the Service Provider through its internal communication system and also through its approved electronic communication address, and the amendment shall enter into force within 15 days from the date of notification, unless a longer period is stipulated. As for the amendments that will have unfavorable consequences for the Service Provider, the period foreseen for the implementation of the amendments is set as 30 days, and the Service Provider is entitled to terminate the intermediary agreement without compensation by notifying the Service Provider via the internal communication system before the expiration of the 30-day period in case of such contract amendments.
Moreover, the Regulation gives the Intermediary the right to restrict, suspend or terminate the intermediary agreement only in the presence of objective conditions in the agreement, after requesting a justification from the Service Provider by providing its reasons explicitly, and only if these justifications are insufficient or no explanation is provided. Intermediaries affected by these decisions will be able to continue their activities limited to the existing orders.
Establishment of an Internal Communication System
The Regulation also provides for the establishment of an “internal communication system” to ensure all kinds of communication between Intermediaries and Service Providers in the marketplace. Within the scope of the Regulation, internal communication systems is defined as "the system created by the electronic commerce intermediary service provider to ensure easy and free of charge all kinds of communication with the electronic commerce service providers in the electronic commerce marketplace", and it is necessary to establish the infrastructure where Service Providers can make all kinds of applications for Intermediaries online. The obligation to establish an internal communication system will enter into force on July 1, 2023 and until that date, communication will be maintained through other means such as e-mail.
Obligation to Assign Contact Persons
With the entry into force of the Regulation, Intermediaries in the e-commerce marketplace will be required to designate at least one real person or legal entity as a point of contact with whom public institutions and organizations can communicate directly.
As to reduce dependency on electronic commerce marketplaces, intermediaries shall ensure that Service Providers have access to data regarding their sales in the electronic commerce environment free of charge. Intermediaries must fulfill such data-related requests within 15 days. With the entry into force of this provision on January 1, 2024, Service Providers will be able to easily transfer their data to other e-commerce marketplaces. Medium, large and very large-scale Intermediaries will also be obliged to create an application programming interface for the transportation and storage of data.
Restriction on Advertising and Discount Budget
The Regulation defines what is included in advertising, discounts, and related expenditures in line with the Law and sets forth restrictions on advertising and discount budgets for Intermediaries and Service Providers based on the net trading volume. In addition, it is stated that the advertisements made by the Service Provider or third parties in favor of the Intermediaries shall also be considered as advertising expenditures and are subject to restrictions on the advertising budget. These provisions entered into force on January 1, 2023 to be applied to the net trading volumes for the calendar year of 2022.
Provisions in Line with the Law
The concepts of "electronic commerce intermediary service provider" and "electronic commerce service provider", which were defined for the first time by the Law, are included in the Regulation, and Intermediaries and Service Providers are grouped as medium, large and very large-scale according to the net trading volume in a calendar year.
The Regulation specifies that the licensing and license renewal obligations under the Law will enter into force as of January 1, 2025 and that the license and renewal applications, which will be made through Electronic Commerce Information System (ETBIS), will be concluded within 15 days.
The Regulation aims to prevent unfair commercial practices in electronic commerce, protect the competitive environment and maintain transparent and fair commercial relations between the actors in electronic commerce in the Turkish market by regulating the obligations imposed by the Law in detail.
However, the criticism and concerns that some provisions may make it difficult for new entrants to enter the market such as high license fees, restrictions on discounts and advertisements, and the inability of intermediaries to sell their own brands, which we highlighted in our Article regarding the Law, remain unchanged following the Regulation.