At the beginning of 2015, the Ministry of Customs and Trade issued the Commercial Advertisements and Unfair Commercial Practices Regulation, which annulled and replaced the outdated 2003 regulation. The new regulation has removed the ban on comparative advertising and includes a provision which allows the use of the goods, trademarks, trade names and services of competitors in ads. The provision will enter into force on January 10 2016 and may result in legal disputes between competitors.
The new regulation is based on the Law 6502 on Consumer Protection, which came into force in 2014.
The regulation was published in the Official Gazette and came into force on January 10 2015. Article 8 regulates the principles and procedures regarding comparative advertising, but will not enter into force until January 10 2016.
Article 11 of the previous regulation had restricted comparative advertising, which could be used only if:
- the ad did not include the name of the goods, services or trademark compared;
- the goods and services compared were of a similar type and quality and satisfied the same demand and need; and
- the ad complied with fair competition principles and was not misleading for consumers.
The previous regulation did not allow a competitor to be used or addressed implicitly or explicitly in advertising.
The new regulation, in contrast, allows comparative advertising that uses the name, trademarks and logo of competitors under certain conditions. Under the regulation, ‘comparative advertising’ is defined as an ad that directly or indirectly uses elements relating to a competitor’s goods or services.
Conditions for comparative advertising
Under the new regulation, comparative advertising is allowed – and the name, logo or other distinctive marks and trade or business names of competitors may be included – only if certain conditions are met:
- comparative advertising should not be deceptive or misleading or lead to unfair competition; and
- comparisons should be objective, verifiable and beneficial to consumers.
The regulation specifically prohibits comparative advertising for dietary supplements.
These conditions appear to have been inspired by the similar EU Misleading and Comparative Advertising Directive (2006/114/EC).
The new regulation appears to pave the way for debate regarding unfair competition and trademark legislation in Turkey.
Unfair competition perspective
Unfair competition is regulated under the Commercial Code, which prohibits unfair and bad faith commercial practices. This covers comparisons with a competitor’s goods, activities or prices that mislead or defame a competitor’s reputation.
Although the new regulation provides protection for comparative advertising in terms of unfair competition claims, the Commercial Code’s provisions in that regard are extensive and open-ended. As a result, unfair competition is likely to be subject to debate and constitute a potential line of argument for parties claiming that comparative ads constitute unfair competition.
The new regulation allows the trademarks, logos and distinctive designs and signs of competitors to be used in ads. This could result in trademark-related disputes.
Under Article 9 of Decree-Law 556 on the Protection of Trademarks a rights holder may block the use of its trademark for goods and services that are subject to its trademark registration. Further, a rights holder may prohibit the use of its trademark in business documents and ads.
This may result in disputes regarding the regulation’s comparative advertising provision. The balance between trademark rights and the right to comparative advertising is likely to be the subject of debate which will be resolved by the courts.
The approval of comparative advertising in Turkey is an important development for fostering increased competition and greater transparency for consumers. Comparative advertising could also affect consumption habits and consumer choices. The new regulation will also foster a better commercial environment for global businesses that invest in Turkey and previously had to avoid using comparative advertising.
The regulation includes a 12-month transition period before the comparative advertising provision is implemented. However, ambiguity remains regarding its application, as no change to corresponding legislation has been made, which could lead to disputes. Even if legislation had been amended accordingly, ambiguity would have remained regarding application, as this is the first time that comparative advertising has been permitted in Turkey. The regulation’s application will be shaped by Advertisement Board decisions and court precedents going forward.
(By Gönenç Gürkaynak and Ilay Yilmaz at ELIG)