Category: Turkiye

Parallel to the European Union Regulation No 17: First Regulation implementing Articles 85 and 86 of the Treaty, Article 9 (3) of the Law No. 4054 on the Protection of Competition (“Competition Law”) regulates “termination of infringements” as “the Board, prior to taking a decision (…) shall inform in writing the undertaking or associations of undertakings concerned of its opinions concerning how to terminate the infringement”.

Accordingly, the Turkish Competition Authority (“TCA”) may share its opinion, which is not binding for undertakings, without initiating a full-fledged investigation even with a violation determination. However, in order not to initiate a full-fledged investigation, effects of these violations should be removed with TCA’s non-binding opinion. In its recent Dokuz Göller Decision¹, despite the leniency application and the violation determination, the TCA solely shared its non-binding opinion with the purpose of terminating the violation and did not initiate a full-fledged investigation.  

On March 9, 2017, Dokuz Göller İnşaat Gıda Tarım Enerji San. Tic. Ltd. Şti. (“Dokuz Göller”) applied for a negative clearance/exemption according to the Competition Law, regarding two separate agreements concluded with Albayrak İnşaat Tic. San. Ltd. Şti. (“Albayrak”) (together referred to as “Parties”). With such agreements, the Parties decided that Albayrak will stop producing ready-mixed concrete and in return Dokuz Göller will stop producing aggregate and give aggregate purchase commitments to Albayrak which ultimately leads to market sharing. In this context, the aggregate produced by Albayrak would only be sold to Dokuz Göller in accordance with the Aggregate Agreement and the aggregate production facility of Dokuz Göller would be sold to Albayrak in accordance with the Stone Crusher Facility Agreement.

Furthermore, on May 22, 2017, Dokuz Göller made another application regarding its previous negative clearance/exemption application, to be evaluated as a leniency application in accordance with the “Regulation on Active Cooperation for Detecting Cartels” (“Leniency Regulation”). In this context, the TCA accepted the leniency application made by Dokuz Göller on June 1, 2017 and initiated a preliminary investigation against the Parties and other undertakings operating in the ready-mixed concrete and aggregate markets within certain districts of Antalya. 

Once the clauses of the relevant agreements have been examined, it has been established that there is no clause preventing Albayrak from producing ready-mixed concrete. However, according to the statements of the Parties and since Albayrak ended its ready-mixed concrete production on March 31, 2016 (both agreements entered into force on April 1, 2016), it has been determined that stopping ready-mixed concrete production was a part of the agreement, though not written. 

The TCA determined that Albayrak’s focus on aggregate production after stopping ready-mixed concrete production and not selling aggregate to any undertaking other than Dokuz Göller restricts competition. It was further concluded that the relationship between the Parties could not benefit from group exemption or individual exemption since agreements ultimately leads to market sharing. 

On the other hand, when the effects of agreements were evaluated in relation to the relevant product markets, the TCA determined that the prices in the ready-mixed concrete market have increased by 3%. Moreover, the TCA decided that the prices of aggregate increased due to increases in costs. In this context, the TCA emphasized that the agreements have a “limited” competition restrictive effect on the relevant markets. However, according to a Dokuz Göller official, (i) Albayrak stopped producing ready-mixed concrete and Dokuz Göller stopped producing aggregate, (ii) the customer portfolio of Albayrak was transferred to Dokuz Göller and (iii) after agreements concerned, price of aggregate began to increase while the quality began to decrease. Because of that, the official stated, the amount of cement used for ready-mixed concrete production was increased in order to maintain the quality, which caused cement costs (and accordingly ready-mixed concrete costs) to rise by around 10-20%. 

In result of the preliminary investigation conducted, against the case-handlers view to initiate a full-fledged investigation, the TCA, while considering that (i) all the issues related to both agreements were identified during the preliminary investigation, (ii) the restrictive effects on competition were limited, (iii) the effects of the violation is eradicable and (iv) the leniency application was made by Dokuz Göller, concluded that the restrictive effects of the violation may be removed without initiating a full-fledged investigation. Thus, 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 the Aggregate Agreement and the Stone Crusher Facility Agreement concluded between Parties must be terminated; otherwise, a full-fledged investigation will be initiated.

In this regard, the previous decision of the Council of State regarding the implementation of Article 9 (3) should be mentioned. In its decision, parallel to TCA’s Dokuz Göller Decision, the Council of State determined that, if (i) all the issues subject to investigation may be enlighten, (ii) the restrictive effects on competition were limited and eradicable, (iii) the infringement has been concluded with all its effects and the anti-competitive harm has been terminated without the need of a full-fledged investigation, the TCA may adopt a different approach provided under the Competition Law. Within this context, as Article 9 (3) was also introduced for procedural economy purposes in terms of terminating negligible restrictions on competition, Dokuz Göller Decision should be deemed as a case in point regarding successful implementation of Article 9 (3) of the Competition Law.

1. TCA’s decision dated 09.08.2017 and numbered 17-26/412-184.

By Ayberk Kurt, Associate, Mehmet Salan, Associate, and Omer Bulgak, Associate, ACTECON

I. Legal Framework and the Purpose of the Proof of Trademark Use

The Industrial Property Law with Number 6769 (“IP Law”) has been published in the Official Gazette of January 10, 2017, introducing several changes to the Turkish trademarks law. Proof of use of a trademark is one of these changes brought by the IP Law.

According to Article 19/2, the applicant is entitled to request opposing party to submit evidence proving that he/she had genuinely used his/her trademark on the goods and services relating to the opposition during the five-years period before the date of application or the date of priority of the latter application or he has a proper reason for not using his trademark during that period. This provision is only valid for the oppositions based on likelihood of confusion which is set forth under Article 6 of the same law. Besides, Article 19/2 will be valid on the condition that the trademark, which is the ground for opposition, has been registered for at least five years at the date of application or date of priority of the application for which the opposition is filed. If the opposing party fails to prove the aforesaid, opposition shall be refused. If it is proven that the trademark, which is the ground for opposition, has been used only for some of the goods or services which are covered by registration, then the opposition shall be examined by taking into account the goods or services whose use is proven.

As stated above, proof of use is only valid for the oppositions set forth under the first paragraph of Article 6 of the IP Law which reads as follows:

“If the applied mark is identical or similar with a registered or previously applied mark and if it covers the same or similar goods and services with the registered or the applied mark, if the registered or the applied mark has the possibility of being confused by the public and if this possibility for confusion also involves a possibility that it is associated with a registered or applied mark, then the trademark application should be rejected upon opposition”.

In other words, proof of use will not be valid for the well-known trademarks which are set out under Paris Convention, for the trademark which consists of a person’s name, trade name, photography, copyright or any other intellectual property right of another and for the trademark which can be harmed due to its reputation in Turkey.

The provision regarding proof of use aims to prevent new entrepreneurs come across with an unreal entry barrier to the market and the registered trademarks to be used effectively in the market. Besides, the European Union Trademark Directive and European Union Trademark Code include similar provisions as “Non-use as defense in opposition proceedings”. Therefore, one could say that this provision is brought for aligning with the European Union Regulations. 

II. Turkish Patent and Trademark Office’s Guideline on Proof of Use

The Turkish Patent and Trademark Office has published a Guideline for Proof of Use (“Guideline”) which consists of clarifications for the purpose of guiding both the applicants who can claim proof of use and the opposing parties who can present evidence of use. The Guideline evaluates potential documents and information to be submitted as evidence and categorizes them. It also provides details on the necessary content and form of the documents.

The Guideline explains the conditions for the proof of trademark use. These conditions are as follows: 

• This provision under the IP Law is effective for the applications made after January 10, 2017. On the other hand, for the applications made before January 10, 2017, Decree Law on Trademark Protection with number 556 will be valid. 
• As stated above, proof of use is valid only for the oppositions set forth under the first paragraph of Article 6 and a trademark should be registered at least for five years as of the date of application or priority in order to be subject to proof of use claim.
• The applicant can use the proof of use argument during the opposition period.  If the applicant did not request for a proof of trademark use during the opposition period, this request cannot be made during the opposition which will be reviewed by Reexamination and Evaluation Board. 
• The opposing party should submit evidences which demonstrate that he/she has been using the trademark seriously in Turkey, 5 years prior to the date of application or priority upon the request of applicant. If the opposing party does not submit evidences upon request of the applicant, his/her opposition will be rejected, unless there are other reasons for opposition. 
• Except for the ones requested by Turkish Patent and Trademark Office, evidences cannot be submitted after the periods regulated under the Regulation on the Implementation of IP Law, and if the applicant submits the evidences after these periods, Turkish Patent and Trademark Office should not accept it. 
• If it is proved that the trademark subject to the opposition has been used only for some of the goods or services, the opposition will be reviewed only for the goods and services which are proved to be used. 

III. Evidences that Demonstrate Trademark Use in Turkey 

The applicant shall request proof of use within one month as of being notified of the opposition by specifying the goods or services that the use is requested to be proved. The Guideline also includes the form (M116 Counter View Form) which the applicant should be fill for requesting proof of trademark use. If this form cannot be used, the applicant should request proof of use in a clear way, and in accordance with the conditions set forth under the Guideline.

According to the Guideline, the evidences should be clear, comprehensible and reliable enough. The evidences submitted by the opposing party should indicate enough information regarding the quality, place, time and scope of trademark use. 

The opposing party should submit the evidences by enumerating and listing them, and he/she should write the registration number of the relevant trademark on every document, which preferably does not exceed one hundred pages. The opposing party should also indicate the total number of pages and submit the evidences which cannot be submitted in a written format via magnetic or optic transporters. The information and documents should not be stapled. The evidences can include every kind of supportive documents (e.g. package, label, price list, catalog, invoice, photograph, etc.). If such documents exist, the opposing party should highlight the parts where demonstrate the use of the trademark subject to the opposition in order to show the use clearly.

According to the Guideline, invoice is a very strong evidence for proving the use of trademark, as it directly refers the commercial activity and as it includes date, the goods and services and the prices of such goods and services. 

The Guideline also states that catalogs, price lists and product codes are supportive documents for the invoices even though they do not prove exactly that the trademark is subject to commercial activities. The images of products and packages and the signboards which demonstrate where the goods and services are sold are also some of the significant evidences. 

Advertisements, promotions, marketing researches are also considered as important evidences according to the Guideline.

(First published in Mondaq on February 6, 2018)

By Gonenc Gurkaynak, Managing Partner, Ilay Yılmaz, Partner, Noyan Utkan, Associate, ELIG, Attorneys-at-Law

Reporting standards implemented within the frame of work conducted by the Organization for Economic Cooperation and Development (OECD) for the prevention of base erosion and profit shifting has increased the reporting obligations of multinational enterprises (MNEs). 

The Country by Country report (CbCR) – one of the three different reporting standards regulated by the OECD’s 13rd Action Plan – is required to be submitted to the tax authorities for the first time. This report, which is to be prepared by an MNE’s “Ultimate Parent Company,” may be included in the exchange of information between tax administrations in accordance with the “Multilateral Competent Authority Agreement on the Exchange of CbCRs.” The place and scope of the CbCR, both in international regulations and Turkish tax legislation, is worth review. 

CbCR and Exchange of Information

According to the OECD’s 13rd Action Plan, enterprises are considered a constituent part of MNE groups. An MNE group, which is a body of related entities, has an “ultimate parent entity,” which in turn is the “reporting entity” required to submit the CbCR to its relevant tax authority. As an exception to this general rule, secondary mechanisms would be accepted as appropriate (either in the form of local filing or through filing of the CbCR by a designated member of the MNE group acting in place of the ultimate parent entity), where: (i) no CbCR is required by the laws of the country where the ultimate parent is located; (ii) no competent authority agreement stipulating the exchange of information is concluded; or (iii) there is a failure to exchange the information in practice despite of the existence of a competent authority agreement. Although the CbCR is required to cover the full range of activities of all enterprises within the MNE group, including related entities located in other countries, the CbCR is submitted by the ultimate parent company solely to the state where it resides.  

Multilateral instruments have been developed to provide for the international exchange of the report. For this purpose, the “Multilateral Convention on Mutual Administrative Assistance in Tax Matters” (the “Convention”) has been created. Since the Convention orders participants to agree on the scope and method of an automatic exchange of information, a “Multilateral Competent Authority Agreement on the Exchange of CbCRs” (the “Agreement”) has also been prepared. As of September 2017, it appears from a review of various OECD publications that the Convention has been joined by 113 jurisdictions, and the Agreement has 65 signatories. 

CbCR in Turkish Legislation

In Turkey, the CbCR has been codified by the “Draft General Communique on Disguised Profit Distribution through Transfer Pricing Serial No 3,” which requires ultimate parent companies which are resident of Turkey to submit the CbCR. In addition, Turkish resident group companies of MNEs are also required to submit the CbCR even where the ultimate parent is located abroad, if: (i) there isn’t any competent authority agreement between Turkey and the state where the ultimate parent resides; or (ii) the state where the ultimate parent resides has not adopted the regulations related to CbC reporting into its domestic legal system.

Turkey has not yet signed the Agreement, but its participation in the Convention shows its willingness to adopt multilateral instruments. Therefore, following the enforcement of the draft communique, it is anticipated that Turkey will accelerate the process of engaging with the Agreement.

Summary

CbC reporting, which has been developed as a tool during the OECD’s BEPS-related studies, involves the exchange of information between countries regarding the amount of revenue, income tax paid, number of employees, stated capital, tangible assets, and so on, in each jurisdiction where group companies of a MNE group operate. Multilateral instruments have been developed in order to achieve this exchange. The Agreement, one of the multilateral instruments, which has been signed by 65 countries, has not been signed by Turkey yet since the standards continue to be adapted to local legislation. It is expected that Turkey will become a part of the CbCR automatic exchange regime with the draft communique entering into force.

By Ersin Nazali, Managing Partner, and Pinar Solyali, Tax Manager, Nazali Tax & Legal

This Article was originally published in Issue 4.11 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Traffic insurance activities of almost the entire Turkish insurance industry have been subject to two examinations of the Turkish Competition Authority (“TCA”) in 2017.

The TCA first published, on 03.07.2017, a preliminary inquiry decision regarding insurance companies’ traffic insurance activities following which no full-fledged investigation has been launched. The TCA then concluded, on 19.07.2017, an investigation concerning insurance companies’ traffic insurance policies that has led to no administrative fine against any insurance company. In both of the concerned decisions, the TCA examined more generally insurance companies’ traffic insurance activities. Those decisions are important for the activities of the insurance sector given that 32 out of 34 companies (local and international) providing traffic insurance services have been subjected to investigation by the TCA. 

1. The TCA’s Preliminary Inquiry Decision¹

The TCA conducted a preliminary inquiry into insurance companies operating in the motor vehicles compulsory third party liability insurance market based on the suspicion that insurance companies colluded when removing/changing their installment policies or bringing additional financial charges, and thereby violating Article 4 of the Law No. 4054 on the Protection of Competition (“Competition Law”). 

According to the allegations made in the framework of the preliminary inquiry, insurance companies had agreed, after the publication of the Circular for Motor Vehicles Compulsory Third Party Liability Insurance (“Circular No. 2017/1”) by the Republic of Turkey Prime Ministry Undersecretariat of Treasury (“Undersecretariat of Treasury”), on the following anti-competitive practices:

• removing the possibility of making installment payments, leaving as an only option payment in-full in cash or by credit card;
• avoiding making offers to agencies, or resorting to practices such as sending messages inciting the agencies not to provide insurance to certain persons;
• alleging technical problems as a pretext to block access to the interface on which offers are made;
• imposing additional conditions to conclude insurance contracts;
• bundling traffic insurance with other insurance policies such as home insurance or personal accident insurance. 

The Circular No. 2017/1 lays down limitations regarding traffic insurance premiums that were freely determined by insurance companies. Through the adoption of the said circular, the Undersecretariat of Treasury has decided that (i) traffic insurance premiums should not exceed the premium ceiling determined for each vehicle type (passanger car, truck, commercial car, etc.), (ii) the implementation of maximum increase and minimum discount rates should be controlled, (iii) commission rates to be applied to insurance intermediaries (such as agencies and brokers) should not be below the determined rate and (iv) sanctions will be imposed if these provisions are not applied by insurance companies.

As a result, the TCA found that insurance companies have carried out similar practices of premium collection and policy issuance in order to reduce their increasing portfolio risks and to limit the number of offers in the market.

In line with the evidence gathered during on-spot inspections, however, the TCA established that the aforementioned practices are individually decided upon by insurance companies. According to the TCA, there have not been concerted practices or agreements between insurance companies within the meaning of Article 4 of the Competition Law on the grounds that (i) the conclusion of a traffic insurance policy is an obligation for both insurance companies and consumers, (ii) companies may determine their behaviors in the market by taking competitors’ behaviors into account and (iii) companies’ behaviors are based on a new economic rationale shaped by the regulation of Circular No. 2017/1. 

2. The TCA’s Investigation Decision

More important for the traffic insurance sector, considering its scope, this decision comes at the end of an investigation conducted into the Insurance Association of Turkey and 32 insurance companies active in the market of compulsory traffic insurance upon allegations of anti-competitive agreements or concerted practices in the form of price increases and allocation of markets. 

According to the complaints lodged before the TCA in the framework of this investigation, (i) insurance companies have agreed to double or even triple traffic insurance premiums due to the adoption of a new regulation, (ii) trucks used in international transportation, which are not labelled as risky, cause an increase in the premiums paid by risky vehicles’ users, (iii) setting high traffic insurance premiums encourages consumers not to subscribe to an insurance policy, thereby making it difficult for companies operating in the international transportation sector to compete with foreign registered vehicles, and (iv) some insurance companies request higher premiums to avoid issuance of insurance policies, or even do not make any offer despite their legal obligations to do so. Consequently, insurance companies are said to be able to divide up the market between them.

It has been stressed that insurance companies operating in the traffic insurance sector calculate premiums in accordance with the provisions of the Law No. 5684 on Insurance and generally accepted actuarial techniques. Within the framework of their calculation method, insurance companies take into account the following factors: the region where the vehicle is registered, the vehicle type, the damage history of the vehicle, the driver’s gender and age, the fuel type, the brand name, the engine power, etc.

Despite their leeway in the definition of terms and conditions of the services they provide has been restricted, insurance companies still are entitled to determine, in compliance with the legislation in force, the amount of security, the form of payment, and insurance policy issuance processes. Therefore, while insurance companies can only distinguish themselves on the basis of the quality of their services, this has little importance for consumers who generally consider primarily the price of the services they are looking for. 

a. Claim regarding agreements on price increases

As far as the price increase allegation is concerned, the TCA considered that the observations shared by the concerned insurance companies, under the aegis of the Insurance Association of Turkey, on maximum gross premiums are not anti-competitive given that they have been limited to publicly available information and that the Association is empowered to amend the said premiums by taking into account inflation and modifications to the minimum wage. 

In this context, the TCA also analyzed the concerned companies’ internal correspondence and established that (i) companies have collected information from the market through their agents and were only observing each other’s behaviors, (ii) companies have determined their price levels and assessed for which categories of insurance and regions competitive premiums might be offered, (iii) exclusive discounts have been granted to certain agencies and customers, (iv) companies have raised their premiums to meet their profit expectations and generally tried to set their prices above the sector’s average in order to avoid an excess of insurance policies issued compared to what has been planned, and (vi) companies requesting high premiums have raised them whenever competitors increased their prices to remain non-competitive and thus to restrict their offer on the market. 

Regarding costs increases, it appeared from companies’ internal correspondences, according to the TCA, that insurance companies had to increase their provisions to deal with the increase in the minimum wage, regulatory changes, proceedings regarding diminution claims (in case of value loss), or exchange rate increases. This situation has led to losses, which have been linked by insurance companies to premium miscalculations and to the competition situation of the market. The TCA then established that most of the losses incurred are common for most of the companies in the sector, which underlaid the decisions to increase premiums. 

In addition to the evidence gathered during on-spot inspections, the TCA evaluated insurance companies’ pricing policies by taking into account their market shares, the relation between price and demand, and the relation between price and cost. As a result of those evaluations, the TCA established that premiums increase is linked to the increase of costs elements that occurred at the same period and that have affected the setting of premiums. 

b. Claim regarding market allocation

It has been claimed that insurance companies’ offers for a given type of vehicle differ widely, and that some of them make parallel or high offers, or even avoid making offers. 

Besides, another allegation under this claim is that despite the fact that trucks used in international transportation present a low-risk profile, insurance companies charge high premiums to insure them with the aim of compensating the losses incurred with risky vehicles, and that this situation makes it difficult for companies operating in the international transportation sector to compete with foreign registered vehicles. 

The TCA thus examined the concerned companies’ market shares depending on vehicle type and on the number of policies issued for the “tow truck” type vehicles. The TCA then established that the market shares dynamically evolve according to the number of this latter vehicle type. The TCA further determined that a substantial share of the market consists of policies issued for cars and vans and that insurance policies concerning other types of vehicles only represent a narrow market share. Nevertheless, the TCA ruled that despite certain companies issuing more policies for certain types of vehicles, no indication of market allocation has been found.

Eventually, the TCA concluded that the concerned companies have not been involved in any anti-competitive practice and, accordingly, that they should not be imposed any administrative fine. 

1. Dated 03.07.2017 and numbered 17-20/324-144.

By Bahadır Balki, Managing Partner, Mustafa Ayna, Associate, and Hasan Guden, Associate, ACTECON

The Working Party on the Protection of Individuals with regard to the Processing of Personal Data (“Working Party”) which is established as per the Directive 95/46/EC of the European Parliament and of the Council of October 24, 1995 (“EU Directive”) updated their opinion on consent under General Data Protection Regulation (“GDPR”) which will be effective on May 28, 2018.

The GDPR evolved the concept of consent under the EU Directive and Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 Concerning the Processing of Personal Data and the Protection of Privacy in the Electronic Communications Sector (“E-privacy Directive) by providing further clarification and specification of the requirements for obtaining and demonstrating valid consent. The Working Party’s opinion of November 28, 2017 mainly focuses on this evolution and sheds more light onto EU Directive – GDPR – Turkish Data Protection Law (“Law No. 6698”) triangle. Law No. 6698 is based on the EU Directive, whereas its consent related provision for processing personal data is adopted from the GDPR. Hence the updated opinion answers most of the questions raised by Turkish companies during their compliance processes. 

I. Elements of Valid Consent

Article 4(11) of the GDPR defines consent as: “any freely given, specific, informed and unambiguous indication of the data subject’s wishes by which he or she, by a statement or by a clear affirmative action, signifies agreement to the processing of personal data relating to him or her”.

According to this provision, the consent of the data subject means any (i) freely given, (ii) specific, (iii) informed and (iv) unambiguous indication of the data subject’s wishes by which he or she, by a statement or by a clear affirmative action, signifies agreement to the processing of personal data relating to him or her. 

(i) The Consent Must be Freely Given 

Working Party in their opinion stated that consent will not be considered as “free” if the data subject is unable to refuse his or her consent and it can only be valid if the data subject is able to exercise a real choice. Consent will not be free in cases where there is any element of compulsion, pressure or inability to exercise free will. Working Party also mentioned that the imbalance between the data subject and the controller (which mostly occurs in the events where the data controller is a public authority or where the data subject is an employee) is also taken into consideration by the GDPR. 

The Article 7(4) of the GDPR plays an important role while determining whether consent is freely given or not. According to this article, when assessing whether consent is freely given, utmost account shall be taken of whether, inter alia, the performance of a contract, including the provision of a service, is conditional on consent to the processing of personal data that is not necessary for the performance of that contract. By regulating this provision GDPR aims to narrow the term “the performance of a contract”. The Working party states that there needs to be a direct and objective link between the processing of the data and the purpose of the execution of the contract (e.g. processing the address of the data subject in order to deliver the goods which were purchased online).

The Working Party also mentions the terms “granularity” while determining the existence of freely given consent. In cases where a service involves multiple processing operations for more than one purpose, the data subjects should be free to choose which purpose they accept. Therefore, several consents may be warranted for each purpose. In other words, consent should cover all processing activities carried out for the same purpose or purposes. When the processing has multiple purposes, consent should be given for all of these purposes. 

For example, a company asks from its customers to give their consent to send them their campaigns and promotions by e-mail messages and also to share their personal data with other companies within their group at the same time. According to the GDPR, this consent cannot be considered as granular since there are no separate consents for these two separate purposes. Therefore, the consent will not be valid. 

According to the GDPR, the data controller also needs to demonstrate that the data subject is free to refuse or withdraw consent without detriment and it should be able to prove that the data subject has a free or genuine choice on giving consent. 

(ii) The Consent Must be Specific:

According to the Working Party, to comply with the element “specific” which is stated in the definition of “consent” under the GDPR, the data controller must apply the following:

a. If a data controller processes data based on consent and intends to process the data for a new purpose, the data controller needs to obtain a new consent from the data subject for the new processing purpose. The original consent will not legitimize new purposes for processing.

b. If the data controller seeks consent for various different purposes, it should provide a separate opt-in for each purpose, to allow users to give specific consent for specific purposes.

c. The data controllers should provide specific information regarding each separate consent request about the data in order to make data subjects aware of the impact of the different choices that they have. 

(iii) The Data Subject Must be Informed:

According to the Working Party, it is essential to provide information to data subjects before obtaining their consent since it will enable them to make informed decisions, understand what they are giving consent to, and exercise their rights regarding their consent. The Working Party listed the minimum information required for obtaining valid consent in terms of GDPR. These are:

a. the identity of the data controller,

b. the purpose of each of the processing operations for which consent is sought,

c. the type of data which will be collected and used by the data controller,

d. the existence of the right to withdraw consent,

e. information about the use of the data for decisions based solely on automated processing,

f. if the consent relates to data transfers, information about the possible risks of data transfers to third countries in the absence of an adequacy decision and appropriate safeguards

Even though most of the information listed above were also included in the EU Directive, the GDPR expands the information that should be provided with the data subject by stating that the data controller should also inform the data subject that he/she can withdraw his/her consent. This requirement was not included in the EU Directive.

Similar to the EU Directive, the GDPR also does not require a certain form or shape of such information. Hence, the valid information may be provided in various ways (e.g. written, orally, via audio or video messages). However the GDPR also brings higher standards for the clarity and accessibility of the information. Accordingly the Working Party stated that the data controller should use clear and plain language which can be easily understood by an average person. The Working Party does not allow long illegible privacy policies or statements full of legal jargon.

(iv) Unambiguous Indication of the Data Subject’s Wishes

The Working Party exemplifies Article 7 (2) of the GDPR which addresses pre-formulated written declarations of consent. According to the Working Party, when consent is requested as part of a contract, the request for consent should be clearly distinguishable from the other matters. Also, if consent is requested by electronic means, the consent request has to be separate and distinct; it cannot simply be a paragraph within terms and conditions. This is especially of importance for e-commerce websites, along with many other online platforms and other real and legal persons processing personal data. That means no more incorporating data protection clauses into Terms & Conditions or into employment contracts. The principle of being “clearly distinguishable” is also linked with being “freely given”. For instance, if consent is indistinguishable and incorporated into an agreement along with many other provisions, the data subject cannot consent freely and separately but sign the agreement as a whole.  

The EU Directive described consent as an “indication of wishes by which the data subject signifies his agreement to personal data relating to him being processed”. The GDPR expands this definition, by clarifying that valid consent requires an unambiguous indication by means of a statement or by a clear affirmative action which means that the data subject must have taken a deliberate action to consent to the particular processing.

The GDPR also brings new requirements for the data controllers regarding the explicit consent they obtain. According to Article 7 of the GDPR, the data controller is obliged to demonstrate the data subject’s consent. The same provision also states that data controller must ensure that consent can be withdrawn by the data subject as easy as giving consent and at any given time.

II. Reflections of Article 29 Working Party’s Updated Opinion to Turkish Personal Data Legislation

Law No. 6698 is based on the EU Directive which is currently in force. The obligations of data controllers and the rights of the data subjects set forth under the Law No. 6698 are basically in line with the provisions under the EU Directive. Having said that, the Law No. 6698 requires “explicit consent” of the data subjects for any kind of personal data processing, not only for sensitive personal data, which is in line with the GDPR. Accordingly, the Working Party’s updated opinion for the GDPR may also guide Turkish businesses in terms of structuring their processes. 

For instance, according to the GDPR, the data controller must be able to demonstrate that valid consent was obtained. Also, mechanisms for data subjects to withdraw their consent must be available and easy to apply, and the data controller must provide information on how to withdraw consent. The Law No. 6698 also brings similar obligations to the data controllers. 

The Law No. 6698 is a separate and independent local regulation. However, it is likely that the Turkish Data Protection Board, which is the main authority on data protection related matter, would take the opinion of Working Party as a basis while evaluating the convenience of the consent, as the Law No. 6698 is mainly based on the EU legislation and the implementation in the EU is currently the primary source.  Turkish Data Protection Board has already published its guideline document on consents, and stated that umbrella consents will be invalid, which is in parallel with the “specific consent” principle in the EU. We expect that the opinion of the Turkish Data Protection Board takes shape in time by also taking into account the implementation in the EU. Data controllers may benefit from the Working Party’s updated opinion for clarity on explicit consent and assess whether their current flow for consent needs updates. 

(First published by Mondaq on January 16, 2018)

By Gonenc Gurkaynak, Managing Partner, Ilay Yılmaz, Partner, and Noyan Utkan, Associate, ELIG, Attorneys-at-Law