New Turkish e-commerce draft bill: More restrictive than existing and upcoming EU regulations

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The Ministry of Trade (MoT), as announced in a meeting, is currently working on a draft bill that amends the e-commerce law by regulating e-commerce marketplaces. The MoT is expected to identify certain e-commerce marketplaces as “large” and “very large,” based on specific turnover thresholds. It has expressed concerns that, in the face of rapidly changing technology and digitalization, the e-commerce law in its current state lacks the capability to efficiently resolve problems created by new business models. Its concerns are mainly related to network effects, economies of scale and the high bargaining power of large-scale e-commerce intermediary service providers and their ability to influence consumer preferences and exert control over service providers.

Accordingly, while the draft bill aims to protect e-commerce service providers from unfair practices by e-commerce intermediary service providers, it also aims to establish a fair and competitive environment among them that will benefit consumers. Although influenced by the EU’s Digital Markets Act, Digital Services Act and Platform-to-business Regulation, the draft bill might include some aspects that are even more restrictive. As can be seen below, it is expected that if the draft bill is enacted in full, there will be a significant overlap between the authority of the MoT and that of the Turkish Competition Authority (TCA). In that respect, both the MoT and the TCA would be entitled to initiate independent and separate investigations for the same behavior, if it is infringing under both legal regimes.

The most significant changes proposed are as follows:

  • Restrictions on providing cargo and freight-forwarding services to third parties if the goods and services are not sold on the provider’s own e-commerce platform
  • Restrictions on private-label products of the marketplace owner
  • Requirement of data portability
  • Levy for the E-Commerce Development Fund
  • Strict line of business restrictions imposed on marketplaces, prohibiting them (i.e., the entire economic entity) from engaging in certain activities in Turkey
  • Restrictions on certain activities of marketplaces in financial services, including issuing and accepting closed loop pre-paid payment instruments on the marketplace
  • Strict requirements for intermediary service providers to follow, when they receive takedown requests from intellectual property rights holders
  • Time restrictions on the remittance of purchase prices by intermediary service providers to the service providers
  • Caps on advertisement spending
  • Requirements regarding agreements between the intermediary service providers and service providers

It is expected that the relevant amendments would be proposed to the Grand National Assembly of Turkey during the course of 2022. Once enacted, the amendments are expected to have a major impact on the e-commerce businesses in Turkey.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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