In today's rapidly advancing technological landscape, the way businesses operate, and consumers engage with products and services has undergone a profound transformation. Digital marketplaces have surged in popularity due to their convenience, accessibility, and diverse offerings, leading to a pressing need for comprehensive e-commerce legislation. Law No. 7416, Amending the Law on the Regulation of Electronic Commerce (“New E-Commerce Law”), published in the Official Gazette on 7 July 2022, aims to establish a stricter regulatory framework for online marketplaces and other e-commerce sector players. With the recent expiration of the grace period on 1 January 2024, e-commerce intermediary service providers are now required to comply with the New E-Commerce Law, which brings significant changes ahead for the competitive landscape of the e-commerce space, its key players, and precisely the “gatekeepers”.
Below are some important obligations imposed on e-commerce intermediary service providers which aim to protect overall competition in the e-commerce sector:
Private Labels: E-commerce platform providers are prohibited from selling products under their own trademarks or acting as intermediaries for such sales. Additionally, these platforms cannot promote each other or facilitate access between them. While this measure seeks to prevent the monopolization of intermediary services, it inadvertently restricts the display of competitive pricing from various sellers within a single platform. Furthermore, this may lead consumers to mostly prefer the platforms established solely for the respective private labels, thereby reducing visibility for smaller sellers.
Self-Preferencing: Through their intermediary services, e-commerce platforms gain access to sales data from competing sellers using their platform. Considering that e-commerce service providers also conduct direct sales to consumers under their private labels, this leads to concerns about the potential abuse of power. The New E-Commerce Law bans e-commerce intermediary service providers from using data obtained from commercial users, including competitors, to maintain fair competition.
Data Portability: E-commerce intermediary service providers must now offer technical infrastructure for sellers to transfer their sales data at no cost, ensuring free and effective access to both raw and processed data. The significance of data portability was highlighted in the Turkish Competition Board's (the “Board”) Nadirkitap decision dated 7 April 2022 and numbered 22-15/273-122. This aims to promote competition and innovation by reducing entry barriers for new services and fostering interoperability across platforms.
E-Commerce License: E-commerce intermediary service providers exceeding a net transaction volume of TRY 15 billion and 100,000 transactions in the previous calendar year are obligated to pay a license fee, which exponentially increases based on the e-commerce platform's net transaction volume, starting from 1 January 2025. The licensing fee ties the net transaction volumes of e-commerce platforms to specific monetary values, subjecting them to a licensing fee calculated cumulatively as they surpass each threshold, with the amount from the previous threshold being added to the calculation for each subsequent threshold exceeded.
Additional Restrictions: As net transaction volumes increase, additional restrictions are imposed on e-commerce intermediary service providers. For example, platforms exceeding a net transaction volume of TRY 45 billion and 100,000 transactions must allocate budgets for advertisements and discounts. Furthermore, those reaching a net transaction volume of TRY 90 billion and 200,000 transactions face even more stringent restrictions, including a prohibition on offering logistics and e-money services.
In light of the key changes brought by the New E-Commerce Law, while the introduction of the aforementioned measures may aim to protect smaller players, it risks burdening established e-commerce platforms, the “gatekeepers”, by disproportionately affecting them through imposing costly compliance requirements. Indeed, the restrictions imposed based on monetary thresholds serve as a disincentive for undertakings to expand and grow within the e-commerce sector, potentially harming innovation and development in the overall market. Accordingly, one question to always keep in mind is whether the balance between safeguarding the rights of all stakeholders and promoting innovation in this dynamic realm is properly set. It is safe to say that the effects of the New E-Commerce Law will be subject to further discussions within the competition law area in the upcoming days.
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.
