Recent Development
The Law on the Amendment to the Consumer Protection Law and Certain Laws, which was published in the Official Gazette dated 30 October 2024 and No. 32707 (“Law“), introduces significant amendments to Consumer Protection Law No. 6502 (“Consumer Protection Law“) and Law No. 6563 on Regulation of Electronic Commerce (“E-Commerce Law“).
Provisions regarding the direct selling system and administrative fines to be imposed for violations of this system will enter into force on 30 July 2025. Other provisions entered into force as of 30 October 2024.
The Law is available here (in Turkish).
What does the Law introduce?
The main amendments introduced by the Law are as follows:
A. Amendments to the Consumer Protection Law
1.Consumer Loan Agreements
The agreements within the scope of Banking Law No. 5411 (“Banking Law“) can be concluded in writing or by means of distance communication tools such as an information or electronic communication device and that allow the verification of the consumer’s identity, which may replace the written form within the framework of the relevant legislation, whether by means of distance communication or not. To comply with the Banking Law, it is stipulated that consumer loan agreements between creditors and consumers can be established in writing as well as by means of distance communication.
2. Direct Selling System
The direct selling system, which was previously regulated under the Regulation on the Agreements Concluded Outside the Workplace, has also now been regulated by Article 47/A added to the Consumer Protection Law, and certain additional principles have been set forth.
Direct selling companies are required to be established as stock corporations and to meet other conditions stipulated in the Regulation on the Agreements Concluded Outside the Workplace. In the event that the direct selling system is built on bringing new direct sellers into the system and distributing the benefits arising from it, and is not based on the sale of goods or services to consumers, an administrative fine of TRY 5,000,000 (approx. USD 145,583) will be imposed for each violation.
The purchase of goods or services in the amount or value specified by the direct selling company will not determine the level of the direct seller within the system. The 14-day period granted to consumers who purchased goods or services within the scope of the direct selling system to exercise their right to withdraw from the agreement without any justification and without any penalty clause pursuant to the Regulation on Agreements Concluded Outside the Workplace has been increased to 30 days by the Law. An administrative fine of TRY 2,200 (approx. USD 64) will be imposed on each transaction that is found to be in violation of these provisions.
The direct selling company must establish a system that enables consumers to be informed about the matters specified by the Ministry of Trade and to submit their requests and notifications. Companies that violate this obligation will be given three months to remedy the violation. If the violation is not remedied at the end of this period, an administrative fine of TRY 1,000,000 (approx. USD 29,116) will be imposed.
3.Sanctions
The Law updates the amounts of administrative fines to be imposed for certain violations under the Consumer Protection Law, in particular as follows;
- Activities may be suspended or ceased for up to 3 months or an administrative fine from TRY 60,000 (approx. USD 1,747) to TRY 600,000 (approx. USD 17,470) may be imposed on those who violate the obligations specified in Article 62 of the Law on Consumer Protection regarding unfair commercial practices. The Advertisement Board may impose these fines together or separately depending on the nature of the violation. If the violation is nationwide, administrative fines ranging from TRY 600,000 (approx. USD 17,470) to TRY 6,000,000 (approx. USD 174,700) may be imposed.
- If the obligations specified in Article 61 of the Consumer Protection Law regarding unfair commercial advertisements are violated;
- through a television channel broadcasting at local level, an administrative fine from TRY 110,000 (approx. USD 3,202) to TRY 1,100,000 (approx. USD 32,028) will be imposed,
- through a television channel broadcasting nationwide, an administrative fine from TRY 2,210,000 (approx. USD 64,348) to TRY 22,100,000 (approx. USD 643,478) will be imposed,
- half of the above-mentioned administrative fines will be imposed in case of violation through periodical publications,
- through a radio channel broadcasting at local level or through satellite, an administrative fine from TRY 60,000 (approx. USD 1,747) to TRY 600,000 (approx. USD 17,470) will be imposed,
- through a radio channel broadcasting nationwide, an administrative fine from TRY 600,000 (approx. USD 17,470) to TRY 6,000,000 (approx. USD 174,700) will be imposed,
- through a television channel broadcasting via satellite or via the internet, an administrative fine from TRY 600,000 (approx. USD 17,470) to TRY 6,000,000 (approx. USD 174,700) will be imposed,
- through a text message, an administrative fine from TRY 280,000 (approx. USD 8,153) to TRY 2,800,000 (approx. USD 81,527) will be imposed,
- through other means, an administrative fine from TRY 60,000 (approx. USD 1,747) to TRY 600,000 (approx. USD 17,470) will be imposed.
- An administrative fine of 1% of the annual gross income at the end of the fiscal year preceding the date of the violation and not less than TRY 80,000 (approx. USD 2,329) will be imposed on those who act contrary to the obligation to provide all kinds of information and documents to authorized persons or institutions, or to provide the original or certified copies of the documents upon request regarding the issues falling within the scope of the Consumer Protection Law, if the violation continues despite the warning to provide the information and documents correctly within 7 days or to provide the opportunity for an on-site inspection. Where the gross income is not declared or declared incorrectly, an administrative fine of TRY 6,000,000 (approx. USD 174,700) will be imposed for prepaid housing sales and TRY 1,000,000 (approx. USD 29,117) for other sales. An administrative fine of TRY 50,000 (approx. USD 1,456) will be imposed on those who are not obliged to declare their gross income.
While imposing the administrative fines specified above, the Advertisement Board will assess the unfair content of the violation, the level of the benefit or the level of the damage caused by the violation, and the fault and economic status of the violator.
Additionally, Article 77/A-(2) of the Consumer Protection Law, which stipulates that a reconciliation request can be filed against administrative fines imposed by the Ministry of Trade and governorships, except for administrative fines imposed by the Advertisement Board, has been annulled.
B. Amendments to the E-Commerce Law
With the 2022 amendments to the E-Commerce Law, a license obligation was introduced for e-commerce intermediary service providers. However, with these amendments, certain exemptions were also stipulated for transactions made abroad. Accordingly, transactions made abroad through the electronic commerce marketplaces of the e-commerce intermediary service providers and the e-commerce intermediary service providers with which they are in economic integrity are not included in the calculation of the license fee. The Law introduces the following additional exemptions:
If the net transaction volume of the e-commerce intermediary service provider does not exceed 20% of the sum of the net transaction volumes of the e-commerce intermediary service provider and the e-commerce service providers calculated using ETBIS data, twice the amount of the following will be deducted from the net transaction volume for that calendar year during the calculation of the license fee;
- the amount of sales made abroad through the e-commerce marketplaces of the e-commerce intermediary service provider and the e-commerce intermediary service providers with which it is in economic integrity,
- the amount of the investment expenditure incurred by obtaining an investment incentive certificate from the Ministry of Industry and Technology in accordance with the legislation on project-based support of investments.
In addition, when determining whether the specified net trading volume has been exceeded, exceedances below 15% will not be considered.
Additional exemptions are also introduced for 2024 and 2025. Accordingly, while calculating the license fee for 2024, 4 times of the specified amounts will be deducted from the net transaction volume of the e-commerce intermediary service provider. While calculating the license fee for 2025, 3 times the specified amounts will be deducted from the net transaction volume of the e-commerce intermediary service provider.
Conclusion
Direct selling companies and e-commerce intermediary service providers engaged in export activities should review the amendments introduced by the Law and take the necessary steps for compliance. In addition, given the new provisions on administrative fines, it is recommended that companies review their practices toward consumers and meet the information and document requests from the Ministry of Trade under the Consumer Protection Law in a complete and timely manner.
