New law aims to tackle monopolization in e-trade
Aysel Alp - ANKARA
In order for e-trade to grow in a healthy way, activities that disrupt or limit competition will be prevented, a multi-player structure will be established, according to a bill submitted to parliament by the ruling Justice and Development Party (AKP). The bill was ratified in the parliament on July 1.
“Additional obligations will be imposed on e-trade intermediary service providers, in order to ensure a fair and equal competitive environment” said in the bill. “The persons with whom the service provider has ‘economic integrity’ will also be taken into account.”
The definition of economic integrity was determined in a way to cover both horizontal and vertical control, as well as real or legal persons and commercial companies and businesses connected with these persons.
Regardless of whether they are shareholders or not, the management of more than one trading company by the same person(s) and the same real or legal person(s) having the right to manage in more than one trading company will also be considered within the scope of economic integrity.
As the motive for the bill, it was stated that intermediary service providers may engage in unfair practices.
“Although the majority of e-trade marketplaces are composed of micro and small businesses, service providers may highlight their own goods or services with unilateral and unclear contracts,” said in the bill.
They may also complicate data portability, force the supply of goods or services, make late payments, request compensation despite not providing any service, according to the bill.
“The bill that will end the monopoly in e-trade has been submitted to the parliament,” the Trade Ministry said, adding that this monopolization may cause prices to rise, the quality and variety of products offered to decrease and services to become monotonous, in the long run.
Some e-trade intermediary service providers have become large-scale by implementing aggressive growth strategies, according to the ministry.
“They are further strengthening their position in the market by taking advantage of their network effects and making it difficult for new intermediary service providers to be included in the sector,” the ministry added.
According to the bill, e-commerce providers with a net transaction volume of over 10 billion Turkish Liras ($6 billion) will be obliged to obtain a license, as well as to prevent unfair competition by their vendors.
Those with a net transaction volume of 30 billion liras ($18 billion) with more than 100,000 transactions will not be able to engage in advertising and discount activities in a way to harm their competitors in the market.
The e-commerce companies with a net transaction volume of 60 billion liras ($36 billion) with more than 100,000 transactions will be limited in their activities such as wallet-like electronic money applications, and their cargo activities will be restricted.