Introduction
The Law on Consumer Protection No. 65021 ("LCP") entered into force on 28 May 2014 abrogating the former Law on Consumer Protection No. 4077 ("fLCP"). This amendment aiming to ensure coherence with European Union legislation, and at enhancing the protection of the consumer2, and the secondary legislation enacted under the LCP introduces important novelties.
One of the matters among these novelties that requires assessment is comparative advertising. Art. 61 LCP provides for a general framework governing comparative advertising. The Regulation governing Commercial Advertising and Unfair Commercial Practices3 ("Regulation") provides detailed regulation on the subject that is generally stipulated in Art. 61 et seq. LCP.
Nevertheless, comparative advertising relates not only to consumer protection and consumer law, but also to unfair competition4 and the protection of competitors' rights. This months' Newsletter article assesses comparative publication under Turkish Law with a preponderant view to the LCP, and to the Regulation.
Comparative Advertising and Unfair Competition
The Turkish Commercial Code No. 61025 ("TCC") regulates the acts of unfair competition in Art. 55. Two paragraphs of this provision which read: "1 To discredit others, their goods, business products, prices, activities and commercial businesses, through false, misleading or unnecessarily injurious declarations," and "5 To compare itself, its goods, business products, activities or prices with others, their goods, business products or prices in a false, misleading, injurious or imitative manner, or to favor one party to the detriment of its competitors," related to comparative advertising, specify the acts that would constitute unfair competition.
In order for comparative advertising to be deemed lawful under the TCC, it must not mislead or deceive the consumer, it must be truthful, the goods and services subject to comparison must have the same qualities and features, or meet the same needs, or be intended for the same purpose and, thus, be equivalent or substitutable, the advertising must not be unnecessarily denigrating or demeaning, it must not take unfair advantage of the reputation of another person, and not give rise to confusion6.
These conditions as foreseen in the TCC regarding unfair competition must be taken into consideration when assessing the LCP and secondary legislation governing comparative advertising.
Comparative Advertising in Consumer Protection Legislation
LCP Provisions
Art. 16 fLCP and Art. 61 LCP regulate comparative advertising. Both provisions enable comparative advertising regarding goods and services that meet the same needs or are intended for the same purpose. Therefore, these statutory provisions do not provide a difference governing the comparative advertising regime. The Justification of LPC (as defined in the footnotes)7, by making a reference to the acquis communautaire, states that comparative advertising must comply with honest and fair competition principles, and must not mislead its audience. Nevertheless, further details regarding comparative advertising have yet to be regulated under secondary legislation.
Art. 4 of Directive 2006/114/EC of the European Parliament and of the Council of 12 December 2006 concerning Misleading and Comparative8 advertising ("Directive") m. 4 also foresees that comparative advertising shall compare goods or services that meet the same needs or are intended for the same purpose. The Justification refers to the Council Directive of 10 September 1983 covering the same principle. Therefore, the fLCP and the LCP are in line with European legislation in this respect.
Regulation Provisions
Pursuant to Provisional Art. 1/3 LCP, until the entry into force of the regulations foreseen under the LCP, the provisions of the secondary legislation enacted under the fLCP that do not contradict the LCP shall continue to apply. Commercial advertising was regulated under the former Regulation governing Principles and Application of Commercial Advertising and Announcements9 ("Former Regulation") during the period when the fLCP was in force. This Former Regulation that continued to apply until the entry into force of the Regulation contains provisions regulating comparative advertisements.
Pursuant to Art. 11 of the Former Regulation, (a) the goods, services or brand names that are subject to comparison cannot be mentioned, (b) the goods and services that are subject to comparison must have same qualities and features, or meet the same needs, or be intended for the same purpose, and (c) the advertisements must comply with fair competition principles, and must not deceive the consumer. Thus, the Former Regulation confirms the equivalence or substitution criteria foreseen under the LCP (and in the EU Council Directives), and emphasizes compliance with fair competition principles, as referred to in the Justifications. However, the Former Regulation foresees an additional requirement to not mention the goods, services or trade names that are compared.
Given the express provision of Provisional Art. 1/3 LCP, until the enactment of the Regulation, the Former Regulation's application continued. As the LCP and the fLCP contains the same provision governing comparative advertising, the entry into force of the LCP does not introduce a major amendment on the matter.
On the other hand, the Regulation, which abrogated the Former Regulation by entering into force on 10 January 2015, includes an innovative provision governing comparative advertising. Art. 8 of this Regulation reads as follows:
"ARTICLE 8 – (1) Comparative advertisements may only be made if;
a) They do not deceive or mislead,
b) They do not result in unfair competition,
c) The goods and services that are subject to comparison have the same qualities and features, or meet the same needs, or are intended for the same purpose,
ç) A feature that benefits the consumer is compared,
d) One or more material, major, verifiable and typical quality or qualities, which include the price, of the compared goods or services are compared in an objective manner,
e) Objective, quantifiable assertions based on numeric data are proven through scientific tests, reports or documents,
f) They do not denigrate or discredit the intellectual or industrial property, commercial name, trade name, or other distinct marks, goods, services, activities or other aspects of the competitors,
g) Goods and services whose origins are specified are compared with other goods and services from the same geographical location,
ğ) They do not result in confusion regarding the trademark, trade name, commercial name, any other distinct mark, or goods and services of the advertiser and the competitor.
(2) The name, trademark, logo or other distinct shapes or expressions, as well as commercial and trade names may be contained in comparative advertisements, provided that they comply with the conditions specified in the first paragraph of this provision.
(3) Food supplements cannot be subject to comparative advertising."
This article, in line with the TCC provision, but which goes into further detail, sets forth rules governing comparative advertising. The first paragraph specifies conditions for a comparative advertisement to be deemed lawful. Not resulting in unfair competition, comparing an aspect that is beneficial to the consumer, comparing material, major, verifiable and typical qualities, and proving objective assertions are noteworthy conditions.
The opinion of the Competition Authority on the draft Regulation10 has also been taken into consideration, and the price of the goods and services is provided as an example to the material, major, verifiable, and typical qualities that can be compared.
The second paragraph of this article, for the first time, allows the mention of the name, trademark, logo or other distinct shapes or expressions, as well as commercial and trade names of competitors. This provision requires compliance with the conditions mentioned in the first paragraph, while allowing for this explicit comparison.
Entry into Force
As assessed above, the Regulation provides for novelties that govern comparative advertising. This provision, in comparison with the Former Regulation enacted under the fLCP, and applied until the entry into force of the Regulation, constitutes a highly detailed and innovative framework. Provided that certain requirements are complied with, it is allowed for the first time to refer to the name, trademark, logo or other distinct shapes or expressions, as well as commercial and trade names in comparative advertising.
The Regulation entered into force on its date of publication. Nevertheless, Art. 8 regulating comparative advertising shall be enforced on 10 January 2016, one year after the Regulation's publication. Hence, the novelties emphasized above will not be in effect yet.
Conclusion
Comparative advertisements concern commercial and competition law due to its links to unfair competition, and consumer law, for the sake of protecting consumers. Certain requirements, such as the comparative advertisement not being of a misleading nature, being truthful, the goods and services that are compared being equivalent or substitutable, and which avoid unnecessary disparagement, must be met.
The LCP provision enabling comparative advertising does not differ from the corresponding provision under the fLCP. Both articles, as is the case under the EU directives, render comparison of goods and services that meet the same needs, or are intended for the same purpose, possible.
Notwithstanding the Regulation enacted pursuant to the LCP. Contrary to the Former Regulation, it provides for new and detailed provisions regulating comparative advertisement. Art. 8 of the Regulation introduces additional and detailed conditions that comparative advertisements need to meet, and state in its second paragraph that the name, trademark, logo or other distinct shapes or expressions, as well as commercial and trade names of competitors, may be mentioned. Nevertheless, despite the other provisions entering into force through publication of the Regulation, this Art. 8 will become effective as of 10 January 2016.
Footnotes
1. Published in the Official Gazette ("OG") dated 28 November 2013 and No. 28835, and entered into force six months after its publication.
2. Draft Law on Consumer Protection, General Legislative Justification ("Justification"), http://www2.tbmm.gov.tr/d24/1/1-0787.pdf (accessed on 29 January 2015), p. 33 et seq.
3. Published in the OG of 10 January 2015 and No. 29232. Other than Art. 8 which will enter into force one year following its publication, the Regulation entered into force through publication.
4. See Newsletter article on unfair competition Berna Aşık Zibel, Unfair Competition Provisions Under New Turkish Commercial Code, November, 2011, http://www.erdem-erdem.com/en/articles/unfair-competition-provisions-under-new-turkish-commercial-code/ (accessed on 29 January 2015).
5. RG 14 Şubat 2012, No. 27846.
6. Reha Poroy/Hamdi Yasaman, Ticari İşletme Hukuku, 14. Bası, İstanbul 2012, p.333.
7. Justification, p. 78.
8. See http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:376:0021:0027:EN:PDF for the English text of the Directive (accessed on 29 January 2015).
9. OG, 14 June 2013, No. 25138.
10. For the Competition Authority's opinion of 29 September 2014 on the draft of the Regulation, see. http://www.rekabet.gov.tr/tr-TR/Kurum-Gorus-Listesi and http://www.rekabet.gov.tr/File/?path=ROOT%2f1%2fDocuments%2fKurum+G%C3%B6r%C3%BC%C5%9F%C3%BC%2fTicari+Reklam.pdf (accessed on 29 January 2015).
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.
