Unfair Commercial Practices In Commercial Advertisements
Prohibition of unfair commercial practice is regulated in general by Art.62 of the Law on Consumer Protection No. 6502 (“Law”), and in detail by Art. 61 and 63 of the Law and the Regulation on Commercial Advertisement and Unfair Commercial Practices (“Regulation”) enforced by the Ministry of Customs and Trade based on Art.84 of the Law.
Regulation covers unfair commercial practice with all forms of commercial advertisement targeting consumers and aims to protect consumers against unfair commercial practices. In the third part of the Regulation, unfair commercial practices which are the subject of this article are regulated (Art. 28 to 31).
A general ruling on the prohibition of unfair commercial practice initially set forth therein (Art. 28); after that misleading acts (Art. 29), misleading omissions (Art. 30) and aggressive commercial practices (Art. 31) are regulated respectively and separately. Together with these practices, it is also stated that the sample practices listed in the Annex titled “Sample Practices Considered Unfair Commercial Practices” of the Regulation will be considered as unfair commercial practices in any case (Art. 28/4). Below are detailed explanations regarding the procedures and principles adopted in the provisions of the Regulation on unfair commercial practices and the examples in practice along with the sanctions of violation of the prohibition.
II. COMMERCIAL PRACTICE TARGETING CONSUMERS AND THE CONCEPT OF UNFAIR COMMERCIAL PRACTICE
In parallel with the sub-paragraph 4/1 (p) of the Regulation; to promote and to sell goods and services of people who are engaged in commercial practice such as sellers, providers, manufacturers, importers, to conduct new campaigns, promotions, advertisements and marketing activities attracting consumers in order to acquire new customers and increase their market share will be considered as a commercial practice. On the contrary, making average consumers to conclude an agreement -which they would have not concluded at all- by limiting and even eliminating their free, as such sales, marketing and market share increasing methods and techniques breaching the law and good faith shall constitute an unfair commercial practice.
Also, as per sub-paragraph 4/1 (d) of the Regulation, unfair commercial practice is defined as “any commercial practice that does not comply with the requirements of professional diligence and which significantly distorts or is likely to distort the economic behavior relating to goods or services of the average consumer to which it reaches or the average member of the group to which it targets”.
III. PURPOSE AND SCOPE
The reason that unfair commercial practices against consumers are prohibited by the Law and the Regulation enforced based the Law is to ensure that consumers are protected before they have concluded agreement that they do not intend to. Thus, it is aimed to grant the opportunity of a conscious legal action (economic behavior) by executing their will in a full and free manner and protection of their economic interests.
Since unfair commercial practices prohibited by Art. 62/1 of the Law and the Regulation are deemed as unfair practices (Art.2 of the Regulation) from undertakings to the consumers, practices from enterprises to enterprises shall not be covered by Law or Regulation.
Therefore, in one hand persons who may engage in unfair commercial practice are deemed as real or legal persons including public entities who provide goods or services for commercial or professional purposes or who act on behalf or account of such persons; on the other hand persons who may subject to (regulation m.4/1 / o) to unfair commercial practice are deemed as real or legal person acting for non-commercial or non-professional purposes (Art. 4/1/ö of the Regulation).
IV. SPECIAL CASES DEEMED UNFAIR COMMERCIAL PRACTICE
Before examining the special cases that are considered unfair commercial practice, it is important to note that as per Art.62/1 of the Law and Art. 28/1 of the Regulation; whereas the commercial practice is deemed to be unfair if it does not comply with the requirements of professional diligence and which significantly distorts or is likely to distort the economic behavior of the average consumer to which it reaches or the average member of the group to which it targets; misleading acts (Art.29 of the Regulation), misleading omissions (Art.30 of the Regulation) and aggressive commercial practices (Art.31 of the Regulation ) and the practices in the Annex “Sample Practices Considered Unfair Commercial Practices” of the Regulation are specifically listed as cases on unfair commercial practices according to Art. 28/4 of the Regulations. Moreover, other non-listed practices, which are not specifically regulated and which have elements of the general definition of unfair commercial practice, may be considered as unfair commercial practice.
A. MISLEADING COMMERCIAL PRACTICES
i) MISLEADING ACT
According to Art. 29/1 of the Regulation, practices which include false information or which is likely deceive or can deceive the average consumer as considering all conditions about its presentation -even if the information provided is correct-, are considered as misleading if it results in a legal transaction of which the consumer would not be a party under ordinary circumstances. As an example of a misleading action, the cases where the seller actually does not offer the usual quality pants on display by announcing ”pants for 50-TL in this week” and where requesting payment from customers on different grounds for services which have been announced/committed to be given gratuitously can be given.
The articles in which actions that deceive or are likely to deceive consumers are listed under Art. 29/2 of the Regulation.
On the other hand, in Art. 29/3 of the Regulation, two groups of commercial practices that significantly distorts or is likely to distort the economic behavior of the average consumer were also considered misleading.
As an example, failure to fulfill an obligation issued by the Istanbul Chamber of Commerce that concerns consumers will constitute a misleading commercial practice.
ii. MISLEADING OMISSION
As per Art. 30/1 of the Regulation, the possibility of misleading omission is accepted if the person engaged in the commercial practices, for the purpose of establishing a legal relationship, hides important information in the proposal for the consumer or submit the proposal in an incomprehensible manner or in an inappropriate time, or fails to inform the consumer about the commercial practice of which purpose is clearly stated and if these cases make or are likely make an average consumer to be a party of a legal transaction of which he/she would have not been under ordinary circumstances. For instance, a travel agent’s failure to warn the consumer if they have already known that a pandemic has occurred at the destination point can be considered a misleading omission.
B. OFFENSIVE COMMERCIAL PRACTICES
Art. 31/1 of the Regulation provides a general definition of offensive commercial practices within the scope of the prohibition. According to the provision, three elements were sought for the existence of an aggressive commercial practice:
- Harassment, physical violence, duress or unfair influence,
- Significant distortion of the average consumer’s freedom of choice or conduct relating to a product or service or creating such possibility, and therefore,
- The consumer shall be a party to, or be more likely to be a party to, a legal transaction that under ordinary circumstances would have not been a party to
As an example, it may be considered offensive commercial practice for a potential customer to be given the impression that the seller entering his/her house will not leave the house if the legal relationship that the seller who is trying to establish is not established.
C. THE PRACTICES LISTED IN THE ANNEX TITLED “SAMPLE PRACTICES CONSIDERED UNFAIR COMMERCIAL PRACTICES” OF THE REGULATION
The sample practices stated in the annex of the Regulation, which are considered unfair commercial practices in any cases, are listed under two headings and 19 misleading commercial practices and 5 offensive commercial practices were mentioned.
When determining whether a commercial practice is an unfair application, it must initially be determined whether it can be considered one of the conditions stated in this list. It is considered that the practice is unfair if one of these sample practices occurs; in other words, the practice distorts the economic behaviors of the average consumers. More clearly, it is assumed that it leads the consumer to become a party to a transaction that under ordinary circumstances would not have been a party to; also, the conditions of the general provision in Art. 28 of the Regulation are not sought.
V. ADMINISTRATIVE SANCTIONS AND LEGAL PROCEDURE
As per Art. 63/1 of the Law, the Advertising Committee has a duty or is authorized to make regulations to protect the consumer against unfair commercial practices; to conduct examination and audit as necessary within the framework of these considerations, to cease or make corrections by the same method or impose administrative fine or cease as a precaution up to three months according to the results of the examination or audit. These decisions of the committee are implemented by the Ministry of Customs and Trade since it has no legal personality. In addition, the Advertising Committee may perform this duty by conducting examination ex-offico or may do so upon the application of a consumer. Consumers can request implementation of the sanction in Art. 63 and Art.77 of Law to a commercial practice as examined by the Advertising Committee. If the Advertising Committee considers that an application it has examined is unfair, it can decide to cease this practice as a precaution for up to three months and/or to impose an administrative fine to the person who has engaged in unfair commercial practice (Art. 77/13 of Law).
On the other hand, a nullity action against the decisions made by the Advertising Committee can be filed before an Administrative court within 30 days as of the day the transaction is notified. However, nullity case has been filed does not stop the decision from being executed (Art. 78/2 of Law). Therefore, in order to stop the transaction subject to litigation from being executed, a decision must be made by the administrative courts to stop this execution.
Unfair commercial practices in commercial advertisements are regulated under the Law and Regulation, with the prohibition of unfair commercial practices, it ensures that people in commercial practices such as sellers, suppliers, lenders, producers, importers comply with the requirements of professional care in their commercial practices and do not disrupt the economic behavior of consumers regarding goods or services.
In this way, it is aimed to ensure that consumers exercise their free will as concluding legal transactions and make decisions without being subject to influence. Otherwise, the practice will emerge as an unfair commercial application and will subject to (i) be ceased as a precaution for up to three months (ii) be ceased and/or (iii) administrative fine as a result of the examination of the application conducted by the Advertising Committee ex-officio or upon an consumer application.