GENERAL TERMS AND CONDITIONS, COMPETITION VIOLATIONS AND THEIR CONSEQUENCES

Entrance

In the Turkish legal system, general terms and conditions of business and violations of competition laware of great importance, particularly in the context of freedom of contract, consumer rights, market order, and fair competition principles. While the ability of parties to enter into contracts freely is protected as a fundamental constitutional right, standardized contracts prepared unilaterally by the stronger party can restrict the freedom of will of the other party. At this point, Articles 20-25 of the Turkish Code of Obligations ("TBK"), come into play.

On the other hand, Law No. 4054 on the Protection of Competition ("RKHK"), violations of competition such as restriction of competition, abuse of dominant position, cartels, price fixing, or territory sharing directly concern public order. Therefore, there is both a contractual and a public intersection between general terms and conditions of business and violations of competition law.

This article will examine in detail the definition of general terms and conditions, their legal nature, their intersection with competition violations, the consequences of these violations, and the problems that arise in practice.

I. Definition and Legal Framework of General Terms and Conditions

1. Definition

General terms and conditions are standard, pre-prepared provisions that constitute the content of a contract and are contract clauses accepted by the other party without giving them the opportunity for negotiation.

Article 20/1 of the Turkish Code of Obligations ;
"General terms and conditions are conditions prepared unilaterally by the party drafting the contract before its conclusion, for use in numerous similar contracts in the future, and included in the content of the contract by presenting them to the other party."

2. Elements

Being prepared in advance,
The purpose of its use in numerous contracts,
Not allowing the other side the opportunity to negotiate.

3. Validity Conditions

According to Articles 21-25 of the Turkish Code of Obligations:

It must be explicitly stated in order to be included in the contract.
Provisions that are contrary to the interests of the other party or that violate the principle of good faith shall be deemed not to have been written.
In case of doubt regarding interpretation, the general terms and conditions of the transaction will be interpreted against the party.

II. Competition Law and Competition Violations

1. Definition of Competition

Competition in economic life is the effort of businesses to operate freely, produce goods and services, and offer consumers the most favorable conditions.

2. Types of Competition Violations

Competition violations under Law No. 4054 on Competition:

Abuse of dominant position (Article 6)
Agreements restricting competition between undertakings (Article 4)
Concentrations (mergers and acquisitions, Article 7)

3. Authority of the Competition Board

The Competition Authority and its Board are responsible for identifying violations, imposing administrative fines, and ensuring competition in the market.

III. The Relationship Between General Terms and Conditions and Competition Law

1. Contractual Unilateralism and Competition Restrictions

General terms and conditions are frequently encountered, particularly dealership, franchise, distributorship, insurance, and banking agreements . Unilateral clauses in these agreements can lead to consequences that may also violate competition law.

2. Intersection of General Terms and Conditions and Competition Violation

Price-fixing clauses: Clauses that unilaterally determine the dealer's selling price.
Regional restrictions: Conditions that require a distributor to operate within a specific geographic region.
Tie-up agreements: Provisions that require the purchase of one good in exchange for the purchase of another.
Unilateral cancellation clauses, fees, and penalty clauses imposed on the consumer.

3. Evaluation from the Perspective of Competition Law

The Competition Board considers general terms and conditions not only a violation of freedom of contract but also a restriction of competition . This can lead to serious penalties for businesses.

IV. Sectors Where General Terms and Conditions Lead to Competition Violations

1. Banking and Finance

Granting consumers the authority to unilaterally change interest rates in loan agreements.

2. Insurance

Exclusion clauses in insurance policies.

3. Energy and Telecommunications

Imposing unfair termination fees on consumers in subscription contracts.

4. E-commerce

Platforms forcing sellers to adhere to specific pricing policies.

V. Consequences of Competition Violations

1. Legal Consequences

Invalidity: Deemed not to have been written according to the Turkish Code of Obligations.
Cancellation of unfair terms: Interpretation in favor of the consumer.
Competition Board decision: The violation must be stopped.

2. Administrative Results

Administrative fines (Law No. 4054, Article 16).
Investigations conducted by the Competition Board.

3. Compensation Consequences

Private law sanctions: The right of the party harmed by a competition violation to file a compensation lawsuit.
Compensation up to three times the amount of the damage (Article 57 of the Turkish Commercial Code).

VI. Judicial and Doctrinal Assessments

Although this article does not directly refer to Supreme Court decisions, in legal doctrine and practice, the combination of general terms and conditions with anti-competitive practices interpreted broadly, particularly in favor of the consumer .

In particular, standard contract clauses that restrict competitionnow seen as a violation not only of freedom of contract, but also of the fair functioning of a market economy .

VII. Problems and Criticisms in Practice

General terms and conditions are often accepted by the consumer without being read.
The Competition Board is unable to thoroughly examine every contract term.
The lengthy legal processes.
Small businesses are becoming powerless against large companies.

VIII. Conclusion and Evaluation

General terms and conditions serve as a safeguard in Turkish law, balancing the freedom of contract between parties. However, when applied in a manner that violates competition law, these terms have negative consequences for both individual consumers and the entire market.

Because:

Businesses should avoid anti-competitive clauses in their contracts
The Competition Board should conduct proactive inspections
Raising consumer awareness,
Strengthening judicial precedents is of utmost importance.

IX. Comparison of European Union Competition Law and Turkish Law

1. General Framework of EU Competition Law

European Union competition law the Treaty on the Functioning of the European Union (TFEU) .

TFEU Article 101: Treaties, concerted acts and decisions restricting competition.
TFEU Article 102: Abuse of dominant position.

These regulations have set a precedent for Turkish law, and the EU acquis was taken into consideration when drafting Law No. 4054

2. EU Law in Terms of General Terms and Conditions

In the EU, unfair terms in consumer contracts the Unfair Terms in Consumer Contracts Directive 93/13/EEC .

Interpretation in favor of the consumer,
The principle of transparency,
The principle of invalidity of non-negotiable terms is consistent with regulations in Turkish law.

3. Comparative Evaluation

Turkish Law: A dual protection mechanism is provided through both the Turkish Code of Obligations and the Competition Law.
EU Law: Competition violations fall under the jurisdiction of the EU Commission and are directly binding on member states.

In conclusion, while there are significant similarities between Turkish and EU law regarding general terms and conditions of transactions and competition violations, institutional oversight is stronger and more comprehensive in the EU.

X. Examples of Competition Board Decisions

The Competition Board has highlighted the link between general terms and conditions of transactions and competition violations in many of its decisions

1. Distribution and Dealership Agreements

The Board deemed the territorial restrictions and resale price setting provisions imposed on distributors as a violation of competition law

2. Banking and Insurance Sector

The banks' authority to unilaterally increase interest rates in loan agreements has been subject to scrutiny, both in terms of general terms and conditions and in the context of competition law.

3. E-Commerce Platforms

The Board found that online sales platforms imposing a uniform pricing policy was restrictive of competition and imposed an administrative fine.

These decisions demonstrate the importance of both contractual and administrative oversight in practice.

XI. Strategic Approaches for Lawyers

Strategies lawyers should follow when general terms and conditions and antitrust violations are intertwined:

Contract review: Contracts to be signed on behalf of the client must be examined for clauses that restrict competition.
Legally compliant revision: Unfair terms must be cancelled and brought into compliance with competition law.
Application to the Competition Authority: In case of suspicion of a violation, a complaint must be filed with the Authority.
Compensation claims: The injured party may file a claim for up to three times the amount of the damages.

XII. Examples Encountered in Practical Life

Shipping contracts: The clause "The customer is responsible for all damages incurred during transport" may constitute both a general term and a violation of competition law.
Mobile phone subscriptions: The clause stating "full payment for 12 months in case of early termination" unfairly binds the consumer.
Franchise agreements: A clause stating that "the franchisee cannot deviate from the prices set by the central office" may constitute a violation of competition law.

XIII. Proposals for the Future

Transparency in digital contracts: E-commerce should provide consumers with clear information.
Competition compliance programs: Companies must reduce their risk of penalties by developing compliance policies.
Judicial and institutional cooperation: Court and Competition Board decisions must be consistent.
Consumer awareness: Awareness of general terms and conditions should be increased.

XIV. General Assessment

Competition violations related to general terms and conditions are significant today not only from a legal perspective but also from economic, social, and ethical standpoint. Eliminating unfair terms and protecting competitionbenefits not only individuals but the entire society.

In this context, freedom of contract should not be seen as an absolute right; it should be limited within the framework of public interest, the rule of good faith, and the principles of competition.

#Petition, #SupremeCourtDecisions, Law No. 4054, IstanbulLawyer, Competition Law

Single Blog Title