New e-commerce law entered into force

The new law, which reorganizes the e-commerce sector, entered into force with the new year.

The details of the obligations brought by the Law on the Regulation of Electronic Commerce (E-Commerce Law), which was amended on July 7, 2022, were announced in the Regulation of the Ministry of Commerce on Electronic Commerce Tool Service Providers and Electronic Commerce Service Providers, published the previous day.

Along with the published regulation, the Regulation on Service Providers and Intermediary Service Providers in Electronic Commerce was repealed.

Providing detailed information and evaluations about the scope of the regulation, Istanbul Bilgi University Competition Law and Policy Practice and Research Center Director Assoc. Dr. Kerem Cem Sanlı stated the following in the broadcast he participated in Bloomberg HT:

“As you know, Law No. 6563 was amended this summer with Law No. 7214. The amendments largely stipulated some obligations to intermediary service providers in electronic commerce. To sum up, there were 3 axis regulations. One of them is electronic commerce intermediary service providers, so what is meant here is actually electronic commerce. platforms, marketplaces whose names everyone knows. These platforms were regulating their relations with the sellers. The assumption was that they had an asymmetrical power vis-à-vis the sellers, the contractual relationship broke down and it should be fixed. This was the first axis. Secondly, there was concentration in these markets, there was monopolization. This regulation actually determines the application principles of the changes made with this law and brings more detailed regulations on some issues, how the provisions of the intended law can be understood in practice. What will be done and applied determines this. And again, in accordance with the systematics in the law, there are regulations in these three axes.

“REGULATIONS REGARDING INTERMEDIATION AGREEMENT”

Now the first axis is the relationships between electronic intermediary service providers and vendors. There are two edits here. One was already in the law. Unfair commercial practices. These have been largely preserved. A couple of examples have been added to the new unfair trade practice regulation. Therefore, there is no significant innovation or progress. But there are mandatory regulations regarding the intermediation agreement regulating the contractual relationship between them. This is very important, because from now on, the brokerage agreement between the electronic platform and the seller will be written once and this agreement will be preserved and the minimum provisions that must be included in it, especially the provisions such as termination and suspension, will be regulated as mandatory. In other words, you, as a platform, will not be able to write a brokerage contract in accordance with the freedom of contract. The content here seems to be regulated much more clearly in the regulation. For example, it explains how to do the changing state. If the contract is to be suspended or terminated, it is clearly regulated in this regulation that a time must be given, the defense of the seller must be taken, and objective reasons must be stated in the same way.

“A REGULATION NOT IN FAVOR OF SELLERS”

Another interesting regulation that should be mentioned is the payment term. It was also presented as an innovation in the law. As you know, when you trade on platforms, the payment is transferred to the seller through the platform, after a certain maturity. The provision was saying that you can’t pay after five days. In other words, after you receive your money, you have to transfer it to the seller within five days at the latest. An arrangement has been made here, and arrangements made with credit cards… It is a complex arrangement, but the meaning is as follows: In agreements with the bank, the value date is in days (it is said to be 30 days), which you can do five days after this date in the industry practice. However, in practice, money could enter the platform account much earlier, within 15-20 days. Therefore, it seems that an arrangement has been made that is not in favor of the sellers. So the obligation to pay within these five days seems a bit distorted.

“LIABILITY TO LARGE-SCALE PLATFORMS”

The regulations on the second axis dealt with the issue of concentration. In other words, it was said that electronic commerce intermediary service providers concentrated in the markets and some obligations should be foreseen regarding this monopoly issue. Here, too, there was a ban on brand sales, which was the subject of much criticism. This is in the unchanged, preserved regulation. There was also a license fee and an obligation to license. This was a very unfair arrangement. It was not a regulation that had a counterpart in terms of competition policy. This is in line with the preserved law. Exception vs is also not defined too much. Therefore, the regulation does not seem to have made a better regulation in this regard. There is still a license requirement, and the only condition for getting a license is to pay a fee. These taxes and fees are between three-ten-thousandths and 25 percent of the net transaction volume, with a license fee of up to 25 percent of transactions made through the platform. In practice, this will impose an extraordinary obligation on large-scale platforms. I have no hesitation that this will increase prices and costs and hinder growth.

“ADVERTISING BUDGET LIMITATIONS CONTINUE”

Beyond that, there are some obligations regarding financial thresholds. How he would use the data, there was nothing in the law about this. It is elaborately arranged. I find this positive. How it will happen in practice may be a bit of an issue because there are technical infrastructure adaptation obligations. Data migration requests must be accepted at certain times. In other words, from now on, sellers will be able to pull their own data from the platforms and transfer them to competing platforms. I found this positive because it is something that will increase the competition. Beyond that, platforms will not be able to enter into exclusive contracts with vendors. Sellers will be able to work with other platforms as they wish. Advertising budget limitations and discount budget limitations unfortunately remain. These are detailed. There is also a risky regulation in the article. These are unfortunately not very positive regulations.