Recent Development
Law No. 7511 on the Amendments to the Turkish Commercial Code and Certain Laws, which was published in the Official Gazette dated 29 May 2024 and No. 32560 ("Law"), makes significant amendments to Law No. 6502 on Consumer Protection ("Consumer Protection Law"), Law No. 6585 on Retail Trade ("Retail Trade Law") and Law No. 7223 on Product Safety and Technical Regulations ("Product Safety Law").
The Law is available here (in Turkish).
What does the Law introduce?
The main regulations introduced by the Law are as follows:
A. Amendments to the Consumer Protection Law
1. Authority of the Advertisement Board to Order Access Blocking
The Constitutional Court's decision dated September 13, 2023 and numbered E:2022/70, K:2023/152 ("Constitutional Court Decision"), which will enter into force as of July 27, 2024, annulled the 5th, 6th, 7th, 8th and 9th sentences of paragraph 12 of Article 77 of the Consumer Protection Law. The Constitutional Court Decision is available here (in Turkish).
According to the annulled provisions, if the violation of the provisions regarding unfair commercial advertisements was committed on the internet, the Advertisement Board had the authority to block access to the publication, section or part where the violation occurred (in the form of a URL, etc.), and to block access to the entire website if it was not technically possible to block access to the content related to the violation or if the violation cannot be prevented by blocking access to the relevant content.
The order for blocking access was sent to the Access Providers Union pursuant to Article 6/A of Law on the Regulation of Internet Publications and Prevention of Crimes Committed through these Publications No. 5651. The order could be appealed to the criminal judgeship of peace, and the decision of the criminal judgeship of peace could be appealed against in accordance with the provisions of Law No. 5271 on Criminal Procedure.
According to the Constitutional Court Decision, although the authorization of the Advertisement Board to block access was in accordance with the public interest, the procedure determined for the use of this authorization was in violation of the principle of necessity, which is one of the sub-principles of the principle of proportionality. Thus, the Constitutional Court stated that the manner of restriction set forth in the provision would have led to the complete elimination of the freedom of expression and the freedom to work and to establish private enterprises in terms of the users of the publication, section or part whose access was completely blocked. Under the relevant provisions, there was no alternative restriction method that could be applied without blocking access to the entire website, such as informing the operator of the website where the content is hosted, ensuring that the content owner is notified, or warning of the removal of the content prior to such a restriction. In this regard, it has been determined that the lack of alternative methods, which may ensure the purpose to be achieved by limiting the freedom of expression and the freedom to work and establish private enterprises with less severe restrictions and which may cause less damage, does not conform to the principle of necessity in the sense of proportionality of the restriction set forth by the provisions subject to annulment.
The Constitutional Court's annulment order will enter into force on July 27, 2024, and there is a risk of a legal gap regarding the relevant regulations. To eliminate such risk, Article 18 of Law No. 7511 stipulates that the Advertisement Board is authorized to impose a suspension or correction through the same method, an administrative fine, a cautionary suspension for up to 3 months if deemed necessary, or a decision to remove content and/or block access, based on the results of the inspection and supervision to protect consumers against unfair commercial practices.
In this regard, a more detailed procedure has been provided for access blocking orders. Accordingly, regarding unfair commercial advertisements on the internet, the Advertisement Board must first make a notification for the removal of the content through electronic communication tools, which can be obtained by using communication tools from the relevant web page, domain name, IP address and similar information obtained from similar sources. However, if the content is not removed within 24 hours despite this notification, the Advertising Board can order access to be blocked.
Only if the addressee cannot be notified, the Advertisement Board can order access blocking directly. The access blocking order can only be issued for the content where the violation has occurred. Limited to cases where it is technically impossible to block access to the content related to the violation or where the violation cannot be prevented by blocking access to the relevant content, access to the entire website can be blocked. The access blocking order shall be sent to the Access Providers Union for execution.
2. Administrative Fines
Higher fines will be imposed for certain violations under the Consumer Protection Law.
In particular;
- Companies that fail to use 12-point bold type with clear language in consumer agreements, claim rights against the consumer by offering goods and services that are not ordered, violate the consumer's right of withdrawal, violate the principles regarding subscription agreements, supply goods without price tags to retail trade, fail to provide prior information or violate the consumer's right of withdrawal in distance sales contracts will be subject to a fine of TRY 2,200 (approx. USD 68) per violation;
- Companies that avoid the sale of a good or service will be subject to a fine of 10% of the total sales price, including all taxes, of the goods or services avoided, provided that it is not less than TRY 2,200 (approx. USD 68) for each transaction or agreement;
- Companies that fail to obtain an after-sales service qualification certificate will be subject to a fine of TRY 1,115,000 (approx. USD 34,604); and those that fail to register or update their registration in the system of the Ministry of Trade ("Ministry") will be subject to a fine of TRY 18,000 (approx. USD 559) for each service station;
- Service stations operating without being affiliated to any manufacturer or importer and that do not use the expression "private service" in an easily visible and readable manner in all kinds of media and activities will be subject to an administrative fine of TRY 18,000 (approx. USD 559);
- Manufacturers and importers that do not have the minimum number of service stations during the validity period of the after-sales service qualification certificate will be subject to an administrative fine of TRY 124,000 (approx. USD 3,848) for each missing service station.
3. Timeshare Vacation
The right to timeshare vacation can be granted through cooperative or commercial company partnership or membership in an association or foundation, and those that do not have real rights on the property subject to timeshare vacation can conduct sales of timeshare vacations.
B. Amendments to the Retail Trade Law
Higher fines will be imposed for certain violations under the Retail Trade Law.
In this regard;
- Manufacturers, suppliers and retail businesses that make exorbitant increases in the sale price of a good or service will be subject to an administrative fine from TRY 100,000 (approx. USD 3,102) to TRY 1,000,000 (approx. USD 31,018) for each violation;
- Manufacturers, suppliers and retail businesses that engage in activities that create shortages in the market, disrupt market balance and free competition, and prevent consumers from accessing goods will be subject to administrative fines from TRY 1,000,000 (approx. USD 31,018) to TRY 12.000.000 (approx. USD 372,211) for each violation. In addition, the Ministry may close the workplaces of manufacturers, suppliers and retail businesses that have been fined at least 3 times in a calendar year for up to 6 days.
Additionally, the total amount of administrative fines to be imposed pursuant to the Retail Trade Law for a calendar year shall not exceed;
- TRY 20,000,000 (approx. USD 620,695) for small-scale enterprises;
- TRY 200,000,000 (approx. USD 6,206,947) for medium-scale enterprises; and
- TRY 1,000,000,000 (approx. USD 31,034,735) for large-scale enterprises.
C. Amendments to the Product Safety Law
If the products exported or intended to be exported to countries other than European Union countries are unsafe, subject to adulteration or marked, labeled and certified in a way to mislead the buyer, the exporters will be subject to administrative fines from TRY 240,566 (approx. USD 7,466) to TRY 2,405,665 (approx. USD 74,659) for violations related to product safety, and from TRY 96,226 (approx. USD 2,986) to TRY 962,265 (approx. USD 29,864) for other violations.
Conclusion
Companies should take note of the updated fines and their effects on their operations in Türkiye and take steps to ensure compliance with the applicable legislation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.