In today's dynamic business landscape, competition plays a crucial role in driving innovation and fostering economic growth. However, competition can turn harmful if it becomes unfair, creating an uneven playing field for businesses and consumers alike. To address such concerns, Turkey has robustly regulated unfair competition through its Commercial Code (TCC). This article delves into the provisions of the Unfair Competition Law in Turkey, highlighting its significance and legal implications. As a leading Turkish law firm, we aim to shed light on this vital aspect of commercial law to help businesses understand their rights and responsibilities better.
Understanding Unfair Competition Law in Turkey Within The Scope of TCC Article 54
Unfair competition is a critical concept in the Turkish Commercial Code, encompassing a range of deceptive and dishonest practices that disrupt fair trade practices. At its core, the law seeks to establish an environment of good faith during commercial activities and protect the interests of all stakeholders, including competing businesses and consumers. According to TCC Article 54/2, any transaction, behavior, or practice that undermines fair competition among competitors or between suppliers and customers is considered against the law and falls within the purview of unfair competition.
The Expansive Scope of Unfair Competition
The Turkish Commercial Code has widened the scope of unfair competition by including "all participants" in TCC Article 54/1. This expansion ensures that not only the relationships between competitors are protected but also other activities and practices involving consumers and suppliers. The goal is to maintain transparency, reliability, and integrity in all commercial dealings.
Unfair Competition Cases: Unmasking Deceptive Practices
The Turkish Commercial Code lists several main cases of unfair competition under Article 55. These cases shed light on the deceptive practices that the law aims to prevent. Some of the prominent unfair competition cases include:
1. Advertisements and Sales Methods Contrary to the Rules of Integrity and Other Unlawful Behaviors
This case covers misrepresentations, vilifications, and misleading claims about competitors' goods, services, and prices. It also includes using deceptive sales methods that restrict customers' freedom of choice.
2. Leading to Breach or Termination of Contract
Unfair competition occurs when one party induces another party to violate their existing contracts with third parties, or when they coerce employees or agents to reveal confidential information.
3. Unauthorized Use of Others' Work Products
Using someone else's work products, such as designs, offers, or accounts, without proper authorization, is considered an act of unfair competition.
4. Unlawful Disclosure of Production and Business Secrets
Disclosing confidential business secrets without permission or through illegal means constitutes unfair competition.
5. Non-Compliance with Business Conditions
Failing to adhere to ordinary business conditions specified by law or contract can also lead to unfair competition claims.
6. Using Transaction Terms Contrary to the Integrity Rule
Misleading the other party by using transaction terms against the rule of good faith falls under unfair competition.
Legal and Penal Liabilities Arising from Unfair Competition
The Unfair Competition Law in Turkey establishes legal responsibilities and penal liabilities for those engaging in unfair competition practices. The legal responsibilities include detection of unfair acts, prohibition of such acts, termination of their material consequences, and correction of false statements. Additionally, if material or moral damages occur, the responsible parties must compensate for them.
On the other hand, penal liabilities are addressed under TCC Article 62. Deliberate acts of unfair competition, false or misleading information to favor one's offers over competitors', deception of employees or assistants to obtain trade secrets, and failure to correct false statements can lead to imprisonment or judicial fines.
Filing Unfair Competition Lawsuits in Turkey
In the event of unfair competition, individuals or businesses can pursue both civil and criminal cases. Civil lawsuits may include detection cases, prohibition of unfair competition, cases for the refund of unfair competition, and cases related to pecuniary and non-pecuniary damages. The statute of limitations for filing unfair competition lawsuits is generally one year from the date the unfair act is discovered or three years from the occurrence of the act.
Competent Court and Connection with Competition Law
Cases related to unfair competition fall under the jurisdiction of commercial courts or, in their absence, civil courts of the first instance. These courts handle disputes arising from or related to unfair competition.
It is essential to distinguish between Unfair Competition Law and Competition Law. While Competition Law aims to safeguard free competition at the macro level, Unfair Competition Law protects fairness in commercial activities at the micro level. The former deals with agreements and practices that distort competition, while the latter targets specific deceptive practices and behaviors.
As a leading law firm in Turkey, we take pride in assisting clients with various legal matters, including those related to unfair competition. Our team of experienced Turkish lawyers can provide you with expert advice and representation to help you achieve a fair and just resolution to your legal concerns. Contact us today for a consultation to ensure that your business thrives in a fair and competitive environment.