Recent Developments in Turkish E-Commerce Legislation – 2

On July 7, 2022, the Law on the Regulation of Electronic Commerce (“Law”) was amended. Accordingly, the Regulation on Electronic Commerce Intermediary Service Providers and Electronic Commerce Service Providers (“Regulation”) was published. In this regard, the obligations of electronic commerce intermediary service providers (“ETAHS”) and electronic commerce service providers (“ETHS”), unfair commercial practices in electronic commerce, illegal content, intermediation agreement, electronic commerce license and other issues related to electronic commerce are regulated.

In addition to the discussions on e-commerce legislation, the stay of execution has been requested for the Regulation at the Council of State, and a lawsuit has been filed for the cancellation of relevant provisions of the Law at the Constitutional Court.

As we mentioned in our article titled “Recent Developments in Turkish E-Commerce Legislation”, dated 28 July 2023, a lawsuit was filed for the cancellation of the additional Article 2 and additional Article 4/1, 3, 4, and 6, which involve the term "net transaction volume".

The Constitutional Court has decided that the provisions comply with the Constitution and rejected the request for the cancellation of these provisions. The reasoned decision of the Constitutional Court has been published in the Official Gazette dated September 22, 2023.

The Constitutional Court’s justifications given in the reasoned decision are briefly as follows:

• The rapid development of information technologies is significantly impacting both social and economic life, leading to changes in trade channels. The use of the internet for commercial purposes has given rise to the concept of electronic commerce, necessitating new regulations. Consequently, to address these evolving needs, various new terms and concepts, particularly ETAHS and ETHS, have been introduced into the Law to keep pace with advancing technology.
• Additional Article 2 of the Law outlines ETAHS obligations based on net transaction volume. These obligations essentially involve limitations on the right to work, a fundamental right and freedom. However, these limitations only restrict the sale of these goods within the electronic commerce marketplace under the control of ETAHS. This means that the freedom of these enterprises to sell, mediate, or promote these goods remains intact and has not been unduly complicated. In fact, electronic commerce intermediary service providers can still engage in economic and commercial activities. Therefore, these provisions do not unreasonably diminish the competitiveness of electronic commerce intermediary service providers or subject them to disproportionate economic losses, as the freedom of private enterprise in this sector remains meaningful.
• Consequently, it has been understood that although the rules place restrictions on the freedom of private enterprise, these restrictions do not impose an unreasonable burden on individuals. Within this context, a reasonable balance has been struck between the public interest in achieving the intended goals of the rules and the personal benefits associated with the freedom of private enterprise. In this regard, it was determined that the rules do not result in a disproportionate restriction and therefore do not constitute an excessive limitation on the freedom of private enterprise.
• The phrases "net transaction volumes" in the additional Article 4 of the Law are also subject to lawsuit. Additional Article 4 of the Law clearly specifies the circumstances in which electronic commerce intermediary service providers will be obligated to pay the license fee, the collection process for the license fee, and the criteria and rates at which the license fee will be calculated.
• In this respect, the provisions governing transactions related to the license fee, including the entities obliged to pay it, its scope, calculation basis, rate, and payment schedule, have been established in a clear, comprehensible, enforceable, and objective manner. Additionally, the concept of "net transaction volume" has been clearly defined, providing a general framework and establishing fundamental principles. Therefore, it has been determined that these rules, which limit the right to property and the freedom of enterprise, are specific, accessible, and predictable, avoiding arbitrariness and complying with the criterion of legality.

For the reasons explained above, the Constitutional Court has decided that the provisions subject to the cancellation request are not in violation of the constitution and has thus rejected the request for cancellation.

It is anticipated that the Constitutional Court's decision will also offer guidance in the decision-making process of the Plenary Session of Administrative Case Chambers concerning the implementation of the Regulation.