ABSTRACT
New types of unfair competition have emerged as a result of the increase of competition and accessibility of the internet by anyone due to developing technology. Although internet is the environment in which the activities constituting unfair competition most easily and commonly occur, there is no provision that regulates unfair competition on the Internet, and provisions which regulate unfair competition in general are enforced. In this article, unfair competition provisions of Turkish Commercial Code numbered 6102 are analyzed and then, typical examples of unfair competition will be addressed as well as the corresponding liabilities of such cases.
1. INTRODUCTION
The competition is one of the cornerstones of liberal economy. It is assumed that competition, which is a right in legal terms, will increase business and process quality, and thereby raise the level of prosperity1. However, relevant parties must compete without harming others and within the framework of rule of good faith. Activities which harm other actors of the market and violate the rule of good faith are called unfair competition and prohibited.
As electronic media became one of the means of commercial activities, electronic environments have become significant tools of marketing, which has increased competition considerably in the last ten years. New types of unfair competition have emerged as a result of the increase of competition and accessibility of the internet by anyone due to developing technology and new types of unfair competition keep emerging every day. Between 1995 and 2001, which is the first period of electronic commerce (“e-commerce”), the companies were turnover growth oriented with the support of venture capital, while they became income and profit oriented after 2001; and this change is one of the indicators of internet’s becoming a significant market place . In this respect, it becomes more of an issue as to which applications on internet environment can be described as unfair competition and which legal actions can be taken against such violations.
Although internet is an environment in which the activities constituting unfair competition most easily and commonly occur, there is no provision that regulates unfair competition on internet, and provisions which regulate unfair competition in general are enforced. Therefore, in this article, we will first address the regulations on unfair competition in general, and then common acts of unfair competition on internet environment and finally liability issues as a result of such acts will be addressed.
2. UNFAIR COMPETITION IN GENERAL
Based on the Article 48 of the Constitution, which regulates the freedom of work and contract and stipulates the promotion of private enterprises, it is possible to suggest that economic life of Turkey depends on free competition. While there is no separate unfair competition law, with regard to the actions which causes unfair competition, Turkish Code of Obligations numbered 6098 (“TCO”), Turkish Commercial Code (“TCC”), The Consumer Protection Law (“CPL”) and Law on Intellectual and Artistic Works are applied. However, it should be emphasized that if the action which causes unfair competition leads to unfair competition within the scope of the provisions specified in TCC, enforcement of regulations in TCO and CLP will not be possible, and provisions of TCC will primarily be applied3.
In TCC, types of unfair competition are basically regulated in articles 54 and 55. Among this articles, which were adapted from Swiss Federal Act against Unfair Competitions, 54th article regulates the aims and principles of provisions on unfair competition, 55th article regulates the acts and commercial applications that violate rule of good faith, therefore considered as cases of unfair competition. In 54th article, it is stated that the aim of unfair competition is “providing honest and incorrupt competition to the benefit of all participants.” With the term “all participants”, in addition to the relations between competitors, the relations between suppliers and customers were also included to the scope of the regulations.4
55th article, which is the longest article of TCC, categorizes 23 different cases of unfair competition under 6 main categories.
• Advertisement and sales methods, which violate the rule of good faith and other illegal acts,
• Inducement breach or termination of contract
• Unauthorized utilization of others’ business products.
• Revealing production and business secrets unlawfully,
• Not complying with business conditions,
• Using general business terms and conditions, which violate the rule of good faith.
In the article, these cases of unfair competition are referred to as examples, in the relevant article preamble; they are described as “the most common cases of acts or commercial applications, which violate rule of good faith”5. Therefore, since acts or commercial applications which violate rule of good faith are not subject to the principle of finite number, such acts or commercial application may constitute an unfair competition.
3. FORMS OF UNFAIR COMPETITION ON THE INTERNET
Acts, which constitute unfair competition on internet environment, must be evaluated within the scope of the provisions of general unfair competition in TCC, TCO and Law on Intellectual and Artistic Works since there is no specific legal arrangement on this subject. In this section, the most common forms of unfair competition on internet environment will be discussed and these cases will be evaluated within the framework of general unfair competition regulation.
3.1. Unfair Competition via Spam
Spam refers to e-mails, which are sent to e-mail boxes against users’ will. Advertisements, which are sent through spam e-mails, fill people’s e-mail boxes unnecessarily and cause users to lose time. Further to this, advertisements, announcements, invitations sent through spam e-mails and other marketing methods affect the flow of commercial life adversely in terms of both consumers’ freedom to choose and also for competitors.
In the preamble of TCC’s sub-clause No: 55/1-a, 8 regarding offensive sales method, it is stated that this clause covers all kinds of offensive sales methods, and offensive advertisements must be considered within the scope of the general provision. Accordingly, if sending techniques of Spam constitute a “particularly offensive” unfair commercial method towards competitors and consumers, in this case, those who receive Spam e-mails can sue a law suit based on TCC’s sub-clause no: 55/1-a, 8. In the preamble of the article, the phrase “particularly offensive” is described as: “it is essential that offensiveness has the relevant characteristics and virtually drives the addressee to the corner.” In case the e-mail sent through spam is considered as offensive advertisement, since these advertisements cannot be considered as in compliance with the rule of good faith, it will be possible to take legal action based on the general provision in the 54th ar ticle of TCC. It must also be stated that, as per the article 56/3 provision of TCC, both receivers of spam e-mails and consumer organizations can bring a law suit in such cases.
If advertisements sent through spam contain untrue or misleading statements, this advertisement can be characterized as deceptive advertising, TCC’s sub-clauses 55/1-a, 2 and 55/1-a, 5 on unfair competition can find areas of application. Those, whose e-mail boxes deceptive advertisements are sent constantly, will be able to bring a law suit against persons or organizations sending the relevant advertisement, based on such reason and on grounds of unfair competition. If the advertisement, which is sent through spam e-mail “leads the receiver to confuse the relevant components with other organizations’ commodities, business products, activities and works,” in this case, the receiver will be able to take legal action against spam sender. Also, if the advertisement, which is sent through spam e-mail, constitutes a comparative advertisement within the scope of TCC’s sub-clause no: 55/1-a, 5, in this case, Spam receiver will have the right to bring a legal action on unfair competition.
3.2. Unfair Competition via Domain Names
Domain name is a technological symbol, which is the name and address of a website. Without domain name, it is only possible to have access to a web-site with the IP address. Each domain name inherently differentiates itself from other domain names. Since commercial enterprises and companies choose their brand or company name as a domain name, it is also possible to suggest that domain names have an advertising function6. The fact that domain names have a distinguishing characteristics and advertising functions leads to conflict between domain names. Problems related to domain names can manifest themselves in the form of a violation of brandname, any name or a trade name. This situation leads to the formation of unfair competition.
Within the scope of TCC’s sub-clause no: 55/1-a, 4, a domain name can be discussed in the context of unfair competition if it “causes the relevant content to be confused with other persons’ or organizations’ commodities, business products, activities or works.” Likewise, if there is a possibility that a domain name causes the confusion of name or there is a possibility for confusion, it will cause formation of unfair competition. It should be determined as to whether there is confusion or the possibility of confusion by considering the full domain name7. Plaintiff’s counsel asserted a claim in an event that is subject to Supreme Court’s decision for unfair competition by alleging that “… The Client renders banking service with service brand of AKBANK, continues services with domain name of “akbank.com.tr.” obtained by ODTÜ DNS management in internet environment, Defendant formed a web site under the name of domain of “akbank.net” obtained from Atlas Online İletişim Sistemleri A.Ş. and announced that this page will be rented for one year, this usage will damage commercial credit of the client, also user passwords can be overtaken, action of the Defendant is in breach of TCC and decree law regarding Brands numbered 556...” 8. While the Civil Department no. 11 of the Supreme Court has recognized the demand that is subject to case, it did not mention the confusion of the domain name decision or possibility of confusion of this name in its justified. However, it is possible to say that domain name of “akbank.net” is not used in good faith and that it is acted with opinion of benefiting from recognition of name of “Akbank”.
In 55/1 subparagraph of TCC, advertisement and sales methods not complying with good faith forming unfair competition and attitudes not complying with other laws are listed as example. In case signs or words, which constitute domain name, are formed in a way to cause advertisement or sales methods that do not comply with the good faith, in this case it is possible to take legal action by basing on subparagraph 55/1 of TCC.
3.3. Unfair Competition via Banners and Pop-Up Advertisements
The type of advertisement that appears on others’ websites and which generally shows up on a bar or a button is called advertisement banners (“Banner”). Pop-up advertisement or pop-ups in short is a type of online advertisement that has harmful content in general and are formed to draw attention to advertisements. These advertisements are generally new windows opened under active windows to show the advertisements. It will be possible to consider these advertisements as comparative advertisement and misleading advertisement within the framework of unfair competition provisions of TCC. Advertisements in the banner or pop-up advertisements will be subjects of unfair competition “in case it causes confusion with goods, business products, activities or businesses of others” within the framework of article 55/1-a, 4 subparagraph of TCC. In the same manner, in case an advertisement in the Banners or pop-ups form competitive advertisement by way of “comparison with others’ goods, business products or prices”, it is possible to take legal action in terms of unfair competition by basing on article 55/1-a, 5 subparagraph of TCC.
3.4. Unfair Competition via Link and Framing
A business can provide connections to other web sites for the purpose of introducing its advertisement or goods and services. Link (“Link”) is a command in a web site. program defining scanner of the users to open another web site.
Framing provides the opportunity for the factors including one or more different addresses to appear in one web page. Framing is an advertisement method that is used to draw attention of the users in web pages generally with the purpose of advertisement.
It is possible for a link on the web page to cause unfair competition in terms of different aspects. For instance, bad usage that the connection will cause may create a bad image for the relevant brand. Since this situation will be seen as dishonest, unfair and illegal attitude, the party whose brand is damaged as a result of bad usage will be able to take legal actions relating to unfair competition by basing on subparagraph 55/1-a, 1 of TCC.
In case a business compares its own goods and services by mentioning prices of other businesses that is a direct competitor, according to subparagraph 55/1-a, 5 of TCC: “it will cause formation of unfair competition “in a way to speak ill of itself, goods, business products, activities, prices and competitor in contrary to facts, to be misleading without any cause or in a way to benefit from its reputation and provided that others’ goods, business products or prices are compared or third parties are prevented from similar aspects” 9. A good sample for unfair competition via framing is the case of Washington Post versus Total News in the USA. In this case, primarily Washington Post and many news organization brought lawsuit which ended in their favor; against Total News’ news site that includes contents displaying the news via framing and hyperlink and makes its own advertisement within the frame of these contents on source of the advertisements and content that are shown in the web site with claim of deceiving consumers, confusion and having possibility of causing mistake, and won this case.
3.5. Unfair Competition via Directing Code (Metatag)
Metatag is a term of coding that defines some aspects of a web page and is included within HTML. Metatags that refers to the information presented within a text label are used by search engines forming index of pages in which internet user can find the information on the web page10.
If metatags are causing confusion with the web page of a third part in general or benefit from reputation of another business, provisions relating to unfair competition against these metatags causing unfair competition can be applied. Besides, when brand or name is queried in search engines, if such brand or name is used as metatag or removes potential customers of a web page from the web site of the competitor, and is directed towards the web site using metatag, these actions may cause unfair competition11. In this case, relevant third parties will be able to file a lawsuit with claim of unfair competition and to demand damage incurred because of metatag. For instance, owner of the web page to which less access is provided because of metatag can demand compensation of this damage from the owner of the web page using metatag12.
3.6. Unfair Competition via Adwords Advertisements
Adwords advertisement system is an advertisement method that is defined by advertiser in web page showing up as a result of search, and that is realized provided that expressions determined by the advertiser via searching key words and word groups in search engines and advertisement in which there is a link connected to web page are shown in the section allocated for the advertisement by search engines13.
In case of benefiting from others’ reputation by using non-registered brands, signs and commercial title of others via adwords advertisements or making unreal or misleading statements, these advertisements may be against the rule of good faith. In a decision of Civil Department no. 11 of the Supreme Court, “when name of the Defendant that is www.i...com is clicked in the system named Google adwords in Google search engine and when p… word is searched, it was concluded that advertisement site of the Defendant is obtained, p… expression is a brand expression that is registered on behalf of the Plaintiff, and there will be chaos and thus confusion because of the fact that consum ers being computer users, Plaintiff and Defendant do business in the same area and The Plaintiff accesses web site of the Defendant and advertisement via brand, and violates the brand provided that brand of the Plaintiff is used by the Defendant party wrongfully”14. It should be stated that in such unfair competition actions, the impression on users caused by the advertisements should be evaluated. In the event the user can understand that which link belongs to which company in the page coming up as a result of search, alleging unreal or misleading explanations in adwords advertisements based on 55/1-a, 2 subparagraph of TCC or alleging benefiting from reputation of others by using non-registered brand, signs and commercial title of others based on 55/1-a, 5 subparagraph of TCC shall not be considered relevant15.
4. LIABILITY FROM UNFAIR COMPETITION ON THE INTERNET
Liability of unfair competition is regulated under the 56th and following articles; 58th article specifically regulates the process of unfair competition via press, broadcast, communication and information institutions. In the mentioned article, the environments in which unfair competition and thus liability may be subject to are not regulated limitedly; flexible expressions were included in accordance with the ever-changing and developing structure of the internet environment.
In the old Turkish Commercial Code numbered 6792, only cause of the unfair competition via press was regulated. In TCC, in the event of unfair competition, the defendants and the fields of unfair competition are considered. Environments, in which unfair competition can be processed, were expanded in a way to involve all new technological developments with legislative expression stated in the article as “in case it is processed via press, broadcast, communication and information businesses, as well as the institutions that will enter into service as a result of technological developments that will be realized in the future.”
Within the scope of liability, a hierarchical system, which resembles a gradual liability system regulated under the Press Law, is regulated under the 58th article of TCC which gives place to the fact against whom a law suit can be brought16. According to this system, when there is a liable person in the previous level, then the following level will not be available. If no liable person can be reached by applying the gradual liability system, all levels will be applied untill the last level is reached. In the first level, the provider of the content and advertisement exists. Content provider may be a real person or a legal entity that can create, change and provide all kinds of data which are submitted to the users in an internet environment17. For instance, real persons or legal entities that share content in social networking sites are content providers. In case of unfair competition, the party subject to unfair competition first should take legal action against the provider of the content and the advertisement within the scope of 58th article of TCC.
At the second level, there is the person who provides the message to the information media or ensures that the message is provided to the information media and advertisement service chief. The conditions of filing a suit against the ones stated at the second level are listed below:
• Publishing content or the advertisement without the knowledge of the provider of the content or the advertisement or publishing it in contradiction to the approval of the said person,
• Avoiding the disclosure of the identity of the people stated at the first level,
• The fact that it is not possible to reveal the provider of the content or advertisement; or it is not possible to file a suit against those in Turkish courts.
At the third level, the business or institution owners exist. Legal actions can be taken against those only if people at the second level cannot be reached or case cannot be presented.
Strict liability status is adopted for the second and third level in case of liability determined in the article18. Besides, a case can be presented regardless of any order against those having defect in performing unfair competition within the scope of this provision.
In terms of service providers, if transmission of unfair competition operation is not initiated, receiver of the transmission or the content constituting operation is not selected or the amendment is not made in a way to change the operation, it is stated in TCC that service providers shall not be responsible in principle and no suit can be filed against them. However, due to the fact that the definition of the “service provider” is not established, there is an uncertainty regarding this aspect. It is understood from the justification of the relevant provision that theterm of “service provider” involves only service of access19 and contains “all kinds of real persons or legal entities having access to the internet environment”. Via the innovation brought by 58th article of TCC, a definite immune system was ensured to service providers by stating that the service providers shall be exceptionally liable20.
With aforementioned article, the court is given a broad authority on deciding about the content and the scope of injunction to be taken against service providers. When the negative repercussions of act of unfair competition is comprehensive or the damage to be brought is substantial, decision of injunction can be given in terms of ending or preventing the act of unfair competition by also hearing the relevant service provider. Taking the scope of the effect or its repercussions into account as prior conditions is accepted as an applicable approach21. In case comprehensive authority provided to the Court is used without complying with these prior conditions, it is not difficult to estimate that this situation will cause results which will damage competing rights and internet freedom of people.
5. CONCLUSION
In today’s world, virtual environments have constituted a new market area for enterprises. Accessing customers via web pages formed for the purpose of advertisement, marketing and electronic commerce has become very easy. In recent years, it has been observed that commercial activities are maintained via social media sites. Besides, “viral advertisements” expanded on internet via e-mail or with social networks are among the new generation advertisement methods that has been preferred by big companies in recent years. By taking into consideration of all these advertisement, marketing and e-commerce methods, it is possible to predict that these advertisement, marketing and e-commerce methods will be developed even more and change along with technological developments in the forthcoming years.
When looking at the changes in the provisions of TCC regulating unfair competition, it can be stated that the changes and developments in technology are taken into account. Unfair competition conditions that are included in 55th article of TCC and listed examples have been increased and more clear regulations relating to comparative advertisements have been brought. Besides, it is explicit that the interests of institution owners, consumers and public are considered with innovations brought within the scope of legal responsibility. Expanding people who may file cases arising from unfair competition, extending the scope of the liability of press, broadcasting, communication and information institutions set forth in 58th article of TCC, and including the institutions which will commence operations as a result of technical developments that will be realized in the future are very important and suitable innovations. However, the fact that concrete regulations relating to actions constituting unfair competition in internet environment have not been brought yet and these actions are evaluated within the scope of unfair competition conditions mentioned in the 54th and 55th articles of TCC is considered as a significant absence. It is clear that internet ethic rules that are not in written form are not sufficient. In the event that more concrete legal regulations are brought both in national or international area by considering that internet usage does not remain within the national boundaries, it will close an important gap in terms of judicial decisions and legislation.
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DİPNOT
1 Yaşar Karayalçın, Ticaret Hukuku. (Ankara, 1968), 441.
2 Tamer Soysal, İnternet Alan Adları Hukuku, (Ankara: Adalet Yayınevi, 2014), 132.
3 Hüseyin Ülgen, Mehmet Helvacı, Abuzer Kendigelen, Arslan Kaya, Füsun Nomer Ertan, Ticari İşletme Hukuku, (İstanbul: Vedat, 2015), 525.
4 Neval Okan, Ağ Reklamları ve Haksız Rekabet, (Ankara: Seçkin Yayıncılık, 2011), 26.
5 Abuzer Kendigelen, Yeni Türk Ticaret Kanunu Değişiklikler, Yenilikler ve İlk Tespitler, (İstanbul: XII Levha, 2011), 82.
6 Neval Okan, Ağ Reklamları ve Haksız Rekabet, 92.
7 Okan, Ağ Reklamları ve Haksız Rekabet, 98.
8 YARGITAY 11. HUKUK DAİRESİ E. 2004/4412 K. 2005/769 T. 7.2.2005.
9 Ali Osman Özdilek,, Web Sitelerinde Çerçeveleme (Framing) Teknolojisi ve Getirdiği Yasal Problemlere Kısa Bir Bakış, Montreal 2002, http://teknolojihukuku. blogspot.com.tr/2007/01/web-sitelerindeereveleme-framing.html (Erişim: 18.03.2015).
10 Okan, Ağ Reklamları ve Haksız Rekabet, 137.
11 Okan, Ağ Reklamları ve Haksız Rekabet, 139.
12 Okan, Ağ Reklamları ve Haksız Rekabet, 140.
13 Engin Erdil, Haksız Rekabet Hukuku, (İstanbul: Vedat Yayıncılık, 2012), 307.
14 YARGITAY 11. HUKUK DAİRESİ E. 2012/12304 K. 2013/14141 T. 3.7.2013.
15 Erdil, Haksız Rekabet Hukuku, 309.
16 İhsan Baştürk, “Türk Ticaret Kanununda Bilişim Yoluyla Haksız Rekabetin Hukuki –Cezai Sonuçları.” Türkiye Adalet Akademisi Dergisi 6 (2011), 292.
17 Armağan Ebru Bozkurt Yüksel,“Elektronik Ortamda Haksız Rekabet,” Türkiye Adalet Akademisi Dergisi 18 (2014), 89.
18 Tamer Soysal, İnternet Alan Adları Hukuku, (Ankara: Adalet Yayınevi, 2014), 1047.
19 Bozkurt Yüksel, “Elektronik Ortamda Haksız Rekabet”, 92.
20 Soysal, İnternet Alan Adları Hukuku, 1050.
21 Baştürk, “Türk Ticaret Kanununda Bilişim Yoluyla…”, 308.
