Category: Turkiye

Advertisement is a very strong instrument in free market economies like Turkey’s. As a bridge between manufacturers and consumers and in light of its contribution to a competitive market, the importance of advertisement is critical.

In this article, we would like to discuss restrictions on advertising applicable to both prescription and nonprescription (sometimes called “Over the Counter”, or OTC) medicinal products in both the countries of the EU and Turkey.

Advertising Restrictions in Accordance with Medicinal Products’ Classifications

On March 31 1992, four EU directives came into force resolving legislative differences about medicinal products. One of them is Directive No. 92/28, which states that medicinal products may be advertised to the general public if, by virtue of their composition and purpose, they are intended and designed for use without the intervention of a medical practitioner for diagnostic purposes or for the prescription or monitoring of treatment, with the advice of the pharmacist.

Any informative actions and any campaign or encouragement actions made in order to increase the recommendation, sale, and supply or the consummation of medicinal products are also considered advertising under the directive.

In any advertisement of a medical product, it should be clearly stated that the message is an advertisement, and the product should be clearly defined as a “medicinal product.” The formal and common name (if any) of the medicinal product and the information required for its correct should also be included. 

Directive No. 92/28 prohibits the advertising of medicinal products which are available only with a prescription, contain psychotropic or narcotic substances, publicize treatment methods of tuberculosis, sexually transmitted diseases, other serious infectious diseases, cancer and other diseases involving tumors, chronic insomnia, diabetes and other metabolic illnesses; the cost of medicines which may be reimbursed and distribution of medicinal products to the public by the industry for promotional purposes to the general public.

In Turkey, Article 13 of the Pharmaceuticals and Medical Preparations Law dated 1928 regulates the advertisement of prescription and nonprescription medicinal products. This law forbids the advertising of medicinal products by stable or moving cinema films, illuminated or non-illuminated billboards, and on radio or any other media with a view to praise the preparation or to exaggerate its therapeutic results. However, the law permits announcements that the medication “is useful in treatment of __ diseases” in prospectuses and daily newspapers. The advertising of prescription medicinal products is strictly prohibited in any place other than medical publications.

Samples of any advertisements have to be approved, in advance, by the Ministry of Health. In addition, films prepared regarding the scientific properties of a preparation may be shown with the permit of the Ministry of Health only at the places indicated by the ministry.

In addition to this legislation, Article 4/d of Regulation on Advertisement of Medicinal Products for Human Use came into force in October 23, 2003 complying with EU legislation. It defines advertisement as actions of license or permit owners including but not limited to reminder, notification, actions of medical sale representatives of companies, presentations put on audiovisual press, medical publications, notifications made directly by post or internet, exhibitions and similar actions alongside with giving away samples free of charge, promotions and printed publication materials in order to increase the supply, sale, prescription and use of medicinal product for human use.

But the execution of Article 4/d has been suspended by the decision of 10th Chamber of Council of State numbered 2003/5945E dated October 12, 2004, and other relevant articles have been cancelled since. Even though Turkish law allows advertising of nonprescription medicinal products limiting only to gazettes and prospectuses; the regulation allowing advertisement of nonprescription medicinal products by any means, including radio and television in accordance with EU legislation was deemed unlawful.

Conclusion

Many who support changing this law and allowing for free advertising believe that informing the general public of the ingredients and effects of products will be beneficial for public health. On the other hand, others believe that allowing the advertising of these products will increase improper and use and damage public health. Even though new draft laws in cooperation with EU legislation are being discussed, at the moment, advertisement of nonprescription medicinal products can be conducted only through gazettes and prospectuses in Turkey.  

By Nazli Sezer, Executive Partner, Sezer & Utkaner 

This Article was originally published in Issue 6.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Turkish Constitutional Court granted a decision on April 17, 2019 regarding an applicant’s claims on violation of his freedom of expression and press due to access ban of a news article (which is taken from a newspaper) posted by his social media account with the comment “Interesting confession from the judge of the July 22th investigation”. The decision was published on the Official Gazette on May 15, 2019. The Constitutional Court accepted the applicant’s claim by stating that the access ban of the news article violated the applicant’s right to freedom of expression and press.

Background of the Case

The applicant (“Applicant”) is a journalist and also a member of parliament. The applicant is the owner of a social media account on a social media website, wherein he shares news content. According to the decision, the Applicant shared a news article (which is taken from a Turkish newspaper) on his social media account under the title “Parallel Judge: I have my signature in the wiretapping” along with the comment “Interesting confession from the judge of the July 22th investigation”. The news article related to the statements of a criminal judgeship of peace’s judge, who was assigned for a case regarding the arrest of policemen based on the claim that the policemen, who allegedly had connections with an illegal organization infiltrated into the government, conspired against high-level public officials. The news article further stated that the judge did not accept the case, due to his workload and that he was the one who decided to wiretap in one of the investigations carried out regarding a terrorist organization. 

After the news article was published on the Applicant’s social media account, the criminal judgeship of peace, which is subject to the news article, has filed a complaint before Istanbul 6th Criminal Judgeship of Peace and obtained an access ban decision regarding the news article published on the social media account on the basis that the content violates his personal rights. Applicant filed an objection against Istanbul 6th Criminal Judgeship of Peace’s decision and his objection is rejected by Istanbul 1st Criminal Judgeship of Peace, as the higher court.

Accordingly, the Applicant filed an individual application before the Constitutional Court (2015/4821) on March 16, 2015 by claiming that its freedom of expression and press has been violated.

The Constitutional Court’s Evaluation

Constitutional Court evaluated the access ban procedure under Turkish law and noted that access ban decision based on the Law No. 5651 should only be granted in urgent cases of the existence of a “prima facie violation”, where the violation is apparent without the need of a detailed examination, such as the cases of nude pictures or videos of an individual and cited its earlier Ali Kidik decision. According to the Constitutional Court, the individual has the option to file a lawsuit before civil or criminal courts, since, in the present case, there has to be detailed information to determine whether the content of the news article mirrors the reality and whether this publication harms the honor and dignity of the relevant judge, who is the complainant of the access ban. Constitutional Court stated that Istanbul 6th Criminal Judgeship of Peace failed to provide a convincing decision regarding the urgent need to access ban the news article by proving the prima facie violation, considering that the access ban decision is granted after four years of the publishing of the news article. 

Constitutional Court also noted that there is not enough reason for applying access ban measure in the case at hand considering the content of the news article. The Constitutional Court emphasized that access ban decision granted by way of non-contentious jurisdiction can only be acceptable if there is an imminent and visible violation occurring at the first glance. The Constitutional Court evaluated that in the case at hand, the lower court failed to explain the need to immediately and swiftly eliminate the alleged attack against the honor and dignity through the relevant content, without applying to a contentious trial, as the content of the articles subject to the complaint are not as serious as to grant an access ban decision as per Article 9 of the Law No. 5651. 

The Constitutional Court finally stated that in unlawful interventions against people’s honor and dignity due to expressions of ideas and thoughts on the internet medium, the main goal is to relieve the damages of the injured party, and there are more effective, useful and beneficial legal and criminal remedies, especially in terms of the disputes such as the case at hand.

Consequently, the Constitutional Court concluded that the reasons for access banning of the content without a detailed examination are not relevant and adequate and thus the Applicant’s freedom of expression and press which is protected under Articles 26 and 28 of the Constitution is violated.

(First published by Mondaq on August 19, 2019)

By Gonenc Gurkaynak, Partner; Ceren Yıldız, Counsel; Burak Yesilaltay, Associate, and Yasemin Dogan, Associate, ELIG Gürkaynak Attorneys-at-Law

The amendment to the Law on Radio and Television Broadcasts (“RT Law”), which was published in the Official Gazette of March 28, 2018, regulated broadcasting services (i.e. radio, television and on-demand broadcasts) provided through internet and required these services and their providers (media service providers and platform operators) to be under the supervision and authority of Radio and Television Supreme Council’s (“RTUK”). The Regulation provides detailed information regarding this process.

The Regulation is enacted in order to determine rules and procedures of provision of broadcast services through the Internet, the broadcast license to be granted to the media service providers, the broadcast transmission authority to be granted to platform operators, and supervision of such broadcasts. The Regulation excludes individual communication from its scope, and states that (i) platforms that are not dedicated to transmitting radio, television and on-demand broadcast services through internet medium and (ii) real persons and legal entities which only provide hosting services to radio, television and on-demand broadcast services will not be considered as “platform operators”. 

The Regulation further states that the Regulation is applicable to the content or hosting providers in a foreign country, or for media service providers that are under the jurisdiction of another country, or for media service providers which broadcast in Turkish through internet targeting Turkey or in another language but targeting Turkey and including commercial broadcasts to Turkey, if RTUK determines these broadcasts to be in violation of RT Law and international treaties.

I. Obligations Set Out by the Regulation

According to the Regulation, media service providers that are willing to broadcast their radio, television and on-demand broadcast services solely through internet are obliged to obtain a broadcast license from RTUK and platform operators that are willing to transmit these broadcasts on internet are obliged to obtain broadcast transmission authorization from RTUK. The broadcast license is exclusively granted to joint stock companies established as per the Turkish Commercial Code, for the purpose of providing radio, television and on-demand broadcast services. The application for this license is made to RTUK along with a request petition, signed license application forms drafted by RTUK and the necessary documents specified in Article 7 of the Regulation. The license is granted for ten years.

The media broadcast service providers’ further obligations are provided as follows:

• Keeping RTUK up to date regarding the changes in the documents provided to RTUK,
• Complying with the obligations set out by RT Law, which includes provisions setting forth certain requirements, restrictions and measures regarding broadcasts and their contents.       
• Removing the on-demand broadcast services from program catalogues which is found in violation of RT Law by RTUK.
• Providing RTUK with information on corporate structure,
• Providing audio and image files used in broadcast services to RTUK so that RTUK may remotely monitor the broadcasts, and where necessary provide RTUK with membership rights, license and usage rights to RTUK so that RTUK may record the broadcasts,
• In encrypted broadcasts, encrypting both images and audio in a manner that these images and audio cannot be identified,
• Providing RTUK with the website addresses that the broadcast will be made on, identification tags, addresses, registered e-mails, names and addresses of the representatives,
• Keeping broadcast records for a year following the broadcast,
• Providing RTUK with a copy of broadcast record upon RTUK’s request within ten days,
• If the broadcast is subject to an investigation or prosecution, keeping the record of broadcast until the investigation or prosecution is over, 
• Using protective symbols to inform audience on the content of programs either visually or audibly,
• Informing the program catalogues to RTUK for on-demand broadcasts,
• Declaring commercial communication income and paying RTUK share in this regard,
• Paying broadcast license fees.

II. Fees

Regulation states that the fee for radio broadcast license fee from the Internet is 10,000 (ten thousand) Turkish Liras, TV broadcast license fee from the Internet is 100,000 (hundred thousand) Turkish Liras, and on-demand broadcast license fee from the Internet is 100,000 (hundred thousand) Turkish Liras. 

Having said that, Regulation Amending the Regulation on Procedures and Principles on Auditing Commercial Communication Revenues of Media Service Providers and Declaration and Payment of the Supreme Council’s Share was also published on the Official Gazette of, August 1, 2019. This regulation requires the media service providers holding internet broadcasting license to declare their commercial communication revenues. 

III. Sanctions

If RTUK finds out about broadcast services through Internet without a broadcast license, the issue is announced on RTUK’s website and in this announcement notifies the broadcaster, informing that they can request a broadcast license by way of a petition and a letter of undertaking, along with a payment for license fees of three months, and an access ban request will be issued to the criminal judgeship of peace, and a criminal complaint will be filed, in case of failure to do so. If the broadcaster does not provide the petition and undertaking letter, and does not pay the license fees of three months, access ban procedure will be initiated. 

If RTUK determines that broadcasting services of entities who do not have temporary broadcast right and/or broadcast license, or whose broadcasting license has been cancelled are transmitted through internet, upon RTUK’s request, a criminal judgeship of peace may render a decision for removal and/or access ban of contents. The criminal judgeship of peace judge will render its decision within twenty four (24) hours at the latest without a hearing. However, it is still possible to appeal such decisions within the scope of provisions of the Turkish Code of Criminal Procedure. The article also refers to fifth paragraph of Article 8/A of the Law No. 5651 which requires access ban decisions to be rendered regarding specific URL addresses and sets forth monetary fines for those who do not comply with access ban decisions, respectively.

IV. Practical Effects of the Regulation

The Regulation states that broadcast services provided on internet under a license and/or authorization from RTUK shall be in accordance with RT Law which includes provisions setting forth certain requirements, restrictions and measures regarding such broadcasts and their contents. Therefore, RTUK will be authorized to monitor such broadcasts and their contents; and decide on measures such as broadcast bans and monetary fines that are determined within the scope of RT Law. Also, media service providers that are willing to broadcast their radio, television and on-demand broadcast services solely through internet would obliged to obtain a broadcast license from RTUK and platform operators that are willing to transmit these broadcasts on internet are obliged to obtain broadcast transmission authorization from RTUK.

In conclusion, the RTUK will be entitled to intervene in certain online broadcasts. Entities that provide radio, television and on-demand broadcasting services through the internet will need to assess whether their services fall under the Regulation and whether they will need to obtain a license from the RTUK to maintain their services, and they will have to adjust their broadcasts accordingly to avoid potential restrictions or penalties.  

(First published by Mondaq on August 6, 2019) 

By Gonenc Gurkaynak, Partner; Ceren Yıldız, Counsel; Burak Yesilaltay, Associate and Devlet Cagga Nizam, Associate, ELIG Gürkaynak Attorneys-at-Law

In May 2019, Turkish Competition Authority (“TCA”) has published two reasoned decisions, namely Bfit Decision[1] and Minikoli Decision[2], in which it assesses the resale price maintenance (“RPM”) activities of the concerned undertakings. These decisions bear significance since they represent the TCA’s unstable approach towards RPM activities. In the aforementioned cases, the TCA adopted an effect-based analysis, as it generally did in the past. However, the TCA had displayed a deviation from the said approach in its previous two decisions; Sony Decision[3] and Henkel Decision[4] and adopted a by object analysis. Therefore, Bfit and MinikoliDecisions show this unstable approach.

RPM, in a nutshell, can be defined as; imposition of pressure regarding the sale prices and conditions by the undertakings who are in the position of supplier onto the undertakings who are in the downstream markets such as dealers, distributors or retailers. Such practices are deemed as a violation of competition rules within the context of Article 4 of the Law No. 4054 on the Protection of Competition (“Competition Law“) and Block Exemption Communiqué No. 2002/2 on Vertical Agreements (“Communiqué No. 2002/2”).

While assessing whether there exists a violation or not, the TCA has generally been evaluating the effects of the RPM practices on the market. Such approach is called the effect-based analysis. In the Bfit and Minikoli Decisions, the TCA adopted the same approach. However, in the Henkel and Sony Decisions, the TCA had adopted a relatively rigid approach which does not take the effects of the practices into consideration and ruled on imposition of administrative fines. Such approach deems RPM practices as a violation of Competition Law regardless of their effects on the market. The aforesaid approach is called by object analysis, since it takes only the aim of the practice into account.

We will examine the Bfit and Minikoli Decisions and the TCA’s approach on RPM activities in this article.

TCA’s Previous Decisions Applying by Object Analysis

In the Sony Decision, the TCA decided that Sony Eurasia Pazarlama A.Ş. (“Sony”) violated Article 4 of the Competition Law via practices of RPM by interfering with its dealers’ online sales and restricted competition in the “consumer electronics” market. The TCA ruled on an administrative fine amounting to TRY 2,346,618.62 (approx. USD 403,723.379)[5].

In the Henkel Decision, the TCA established that Türk Henkel Kimya Sanayi ve Ticaret A.Ş. (“Henkel”) violated Article 4 of the Competition Law through practices of RPM. The TCA stated in the decision that Henkel restricted competition in the markets of “beauty and personal care products” and “laundry and home care products” by using various computer programs and internal report systems. The TCA imposed an administrative fine of TRY 6,944,931.02 (approx. USD 1,194,784.51).

The decisions have remarkable common points such as; (i) the TCA ruled on imposition of administrative fines contrary to the concerned case handlers’ conclusions that there was no need for it in both cases and (ii) the TCA adopted a by object analysis approach which is the opposite of its established effect-based analysis approach, in both of the decisions.

The TCA’s Effect-Based Analysis Approach in Minikoli and Bfit Cases

In the Bfit Decision, the TCA concluded the preliminary inquiry stating that there was no need to initiate an investigation. Said preliminary inquiry was initiated in order to assess whether the franchise agreements of Bfit Sağlık ve Spor Yatırım ve Tic. A.Ş. (“Bfit”) contained clauses violating the Competition Law and Communiqué No. 2002/2. The TCA, in its decision, mainly focused on non-compete and no-poaching clauses. However, it also evaluated Bfit’s RPM practices.

In summary, the TCA decided that Bfit’s franchise agreements are in the scope of Article 4 of the Competition Law due to non-compete and no-poaching clauses they contained, and they neither can benefit from the block exemption nor can receive an individual exemption.

With regards to RPM practices of Bfit, considering the documents acquired during the on-the-spot inspections and the information presented by Bfit, the TCA determined that; (i) price lists were created and distributed to the centers by Bfit only related to the reformer pilates services, (ii) the franchisees have freedom to set a price for the services other than reformer pilates services, (iii) this price list practice has been initiated recently and (iv) it has been detected that franchisees are able to deviate from the list prices.

The TCA evaluated the aforesaid practices and determined that such practices cannot benefit from individual exemption within the scope of the Competition Law. On the other hand, considering the abovementioned determinations and Bfit’s low share in the market consisting of numerous and strong competitors, the TCA ruled that the effects of the RPM practices are very limited and therefore there was no need to initiate an investigation. However, instead of a full-fledged investigation, the TCA decided to share its non-binding opinion pursuant to the Article 9(3) of the Competition Law stating that Bfit shall amend the concerned clauses in its agreements; otherwise, a full-fledged investigation will be initiated.

As it can be seen, the TCA did not rule on a violation by object, and evaluated conditions such as market characteristics, market share of the concerned undertaking and the duration of the practices. Therefore, it can be deducted that the TCA has adopted an effect-based analysis approach.

When it comes to Minikoli Decision, the TCA concluded another preliminary inquiry without initiating an investigation. Said preliminary inquiry was initiated regarding the allegations whether Okan Okandan Mini Moda (“Minikoli”) violated the Competition Law through means of RPM practices imposed upon its dealers.

The business relationship between Minikoli and its dealers depends on a certain type of dealership called “XML dealership”, in another name “dropshipping”. Within the scope of the business logic of XML dealership, the dealer does not establish an inventory and simply transfers the order to the supplier. The dealer bills the customer and gets paid and then the supplier bills the dealer and gets paid from the dealer itself. Therefore, a resale system exists between the supplier and the dealer, which means the dealers act as independent entities and assumes their own risks.

In light of the above, the TCA determined that the agreements signed between Minikoli and its dealers contain clauses which prohibit discounts without the approval of Minikoli. Such clause interferes with the price policies of the dealers and therefore are evaluated under RPM practices.

Nevertheless, establishing the existence of clauses leading to RPM practices, the TCA did not rule on a violation by object. On the contrary, it took (i) the market share of the Minikoli and (ii) the fact that these clauses are not enforced, into consideration and decided that there was no need to initiate an investigation. The TCA emphasized that Minikoli did not pressured its dealers into implementing fixed prices or did not impose sanctions against the dealers who deviated from Minikoli’s prices. With all these factors in mind, the TCA decided to share its opinion in accordance with Article 9(3) of the Competition Law stipulating that Minikoli shall remove the concerned clause regarding RPM practices in 90 days instead of initiating a full-fledged investigation. The TCA also stated that in the case that Minikoli fails to comply with this opinion, a full-fledged investigation will be initiated.

Within this context, it is clear that the TCA adopted the effect-based analysis approach in the Minikoli Decision. Even though it established the existence of RPM clauses, the TCA decided not to initiate a full-fledged investigation since Minikoli did not implement such clauses in reality.

Conclusion

The TCA has adopted the effect-based analysis approach until the Sony and Henkel Decisions and considered the effects of the RPM practices on the market while deciding whether to impose fines or not. While evaluating the effects of the RPM practices, the TCA mostly emphasized the market share of the concerned undertakings, the number of competitors in the market and the duration of the practice. Nevertheless, this approach left its place to by object analysis in Sony and Henkel decisions, in which the TCA ruled on existence of violation and imposition of administrative fines purely based on the aim of the practices. However, we see that the TCA could establish effect-based approach on a case by case basis. Yet, even it is seen that the TCA adopted effect-based approach in these two recent decisions as it generally did in the past, considering the Sony and Henkel Decisions, these decisions do not help to remove uncertainty of the TCA’s approach on the RPM activities.

By Aybert Kurt and Burak Bugrahan Sezer, Associate, Actecon