The Legal Link Between Software Piracy and Unfair Competition

 Using unlicensed software is not just a copyright infringement. Under Turkish law, software piracy can also lead to unfair competition by providing a cost advantage over competitors, as well as resulting in compensation, injunctions, penalties, and corporate liability.

Software piracy is often considered merely a copyright infringement. However, in commercial life, the use of unlicensed software is not only an act that harms the financial and moral rights of the copyright holder; it can also disrupt the competitive environment to the detriment of competitors who pay licensing fees, invest in compliance processes, and adhere to legal obligations. Therefore, in Turkish law, the same act can be discussed as unauthorized use and copyright infringement under the Law No. 5846 on Intellectual and Artistic Works, and as unfair competition that disrupts fair and undistorted competition under the Turkish Commercial Code No. 6102.

At the heart of this connection are two fundamental norms. Firstly, the protection of computer programs as works of art. The Law on Intellectual and Artistic Works explicitly defines computer programs and includes them among scientific and literary works. Furthermore, the installation, viewing, execution, transmission, and storage of the program are also covered by the right of reproduction. Secondly, there is the unfair competition regime of the Turkish Commercial Code (TTK). According to the TTK, the purpose of unfair competition provisions is to ensure fair and uncorrupted competition for the benefit of all participants; deceptive or dishonest commercial practices affecting the relationships between competitors or suppliers and customers are unlawful.

Therefore, the relationship between software piracy and unfair competition is not coincidental. If a business can offer the same goods or services at a lower cost without bearing the burden of licensing fees, maintenance costs, subscription costs, and compliance, and if it presents this to the customer as a legal and corporate activity, the problem arises not only against the rights holder but also against competitors and the market order. For this reason, the use of unlicensed software, especially when it becomes systematic within a commercial organization, creates a double-layered area of ​​responsibility under Turkish law.

What does software piracy mean under Turkish law?

In Turkish law, computer programs are protected works. The Copyright Law defines a "computer program" as a sequence of commands and related preparatory work designed to enable a computer system to perform a specific operation or task. Article 2 of the law also considers computer programs, in all their forms, as works. Therefore, piracy is not only about selling pirated CDs or sharing cracks; unauthorized installation, unlicensed reproduction, unauthorized storage, activation with a forged license key, extending a single-user license to multiple users, or using legally obtained copies in commercial processes also create legal risks.

The Turkish Copyright Law (FSEK) also provides for certain limited areas of free use for computer programs; however, these are subject to the condition of "acquisition through legal means." The law states that, unless there is a decisive provision in the contract, the necessary reproduction and processing of the program for its intended use may be carried out by the person who legally acquired the program; the right of the legally acquired user to install, run, and correct errors in the program cannot be prevented by contract. This framework does not create a safe haven for pirated copies or illegally acquired copies. In other words, the defense of "we only used it for our purposes" does not provide protection in cases where the program was not acquired legally from the outset.

Article 68 of the Turkish Copyright Law grants the rights holder strong claims for works that are processed, reproduced, distributed, performed, or communicated to the public without written permission. The rights holder can demand up to three times the price they could have requested if a contract had been made, or the current market price. Article 70 of the Copyright Law regulates moral damages, material damages based on tort if there is fault, and the possibility of transferring the profits obtained. In other words, software piracy should not be seen simply as "get a license and the file is closed"; it should be considered a violation of rights that can have serious financial consequences.

What is unfair competition and why does it intersect with software piracy?

Article 54 of the Turkish Commercial Code defines the purpose of unfair competition provisions as the protection of honest and undistorted competition. The same article explicitly states that deceptive or dishonest commercial practices affecting relationships between competitors or between suppliers and customers are unfair and unlawful. This regulation shows that unfair competition is not limited to directly insulting or imitating a competitor; it encompasses broader behaviors that distort the rules of the commercial game to the detriment of honesty.

Article 55 of the Turkish Commercial Code lists the main instances of unfair competition. These include advertising and sales methods that violate the principle of honesty, misleading statements, unauthorized use of others' products, unlawful disclosure of production and trade secrets, and especially "failure to comply with business conditions." The law explicitly stipulates that those who fail to comply with legal or contractual conditions imposed on competitors, or with business conditions customary in a particular profession or environment, will be considered to have acted dishonestly. This is often where the strongest link between software piracy and unfair competition is established. Because the burden of using licensed software is part of the same economic game for all competitors in a segment of the market. A business that illegally circumvents this burden gains a cost advantage outside the conditions of fair competition.

At this point, the same formula is not sought in every case for software piracy to be considered unfair competition. Sometimes the act appears as "failure to comply with business conditions" under Article 55/1-e of the Turkish Commercial Code; sometimes the same behavior is combined with misleading statements under Article 55/1-a of the Turkish Commercial Code. For example, a company that lowers its prices without bearing any licensing costs and simultaneously declares that it offers a "corporate, fully licensed, legal infrastructure" to its customers may have both illegally reduced its competitive cost and made misleading statements about its commercial activities. Therefore, unfair competition analysis looks not only at the existence of piracy but also at how this act is reflected in the market.

Through what mechanisms does software piracy create unfair competition?

The first and most visible mechanism is the unlawful cost advantage. Businesses using licensed software bear the costs of licensing fees, maintenance, updates, user limit costs, and compliance expenses, while businesses using pirated software avoid these costs. This allows them to sell the same product or service at a lower price, offer lower bids, or create higher profit margins. Since this advantage stems from unlawful cost avoidance rather than competitive success, it is incompatible with the principle of "fair and uncorrupted competition" protected under Article 54 of the Turkish Commercial Code (TTK). In particular, Article 55/1-e of the TTK, concerning "failure to comply with terms of business imposed on competitors by law or contract," provides a strong normative basis in such cases.

The second mechanism is misleading commercial presentation. Article 55/1-a/2 of the Turkish Commercial Code considers it unfair competition when a person makes untrue or misleading statements about their own business, goods, products, activities, prices, and business relationships. A company marketing its production using unlicensed infrastructure as a corporate, fully authorized, licensed, and legally compliant service can also be related to this article, depending on the specifics of the case. This is because the issue here is not merely using pirated software, but rather creating a misleading perception of legality and quality that influences the customer's purchasing decision.

The third mechanism is the idea of ​​unauthorized use of another's work. Article 55/1-c of the Turkish Commercial Code regulates the unauthorized use of work products such as proposals, calculations, or plans, and the acquisition and use of ready-to-market work products belonging to others through technical reproduction methods, as examples of unfair competition. Not every case of software piracy directly corresponds to the examples in this clause; however, considering that software is an intellectual property, protected by the Law on Intellectual and Artistic Works, and commercial use is achieved through technical reproduction, it is possible to discuss copyright infringement and the "unauthorized use" logic in this clause together in some cases. What is decisive here is the specific form of use and the commercial use model of the act.

The fourth mechanism emerges in public tenders, corporate acquisitions, and commercial bids. If a business reduces its actual costs by using unlicensed software and bids below legally compliant competitors, it shapes competition not only through price but also through an illegal infrastructure. Moreover, if this business gives the impression that its infrastructure complies with regulations during the bidding process, the deceptive aspect of unfair competition is strengthened. The law does not explicitly list this scenario under the name "software piracy"; however, Articles 54 and 55 of the Turkish Commercial Code, which focus on honesty, deception, and compliance with business conditions, are broad enough to cover such cases.

Can the same act constitute both a violation of the Law on Intellectual and Artistic Works and unfair competition?

Yes, it's possible. This is because the two laws protect different interests. The Copyright Law (FSEK) essentially protects the financial and moral rights of the author over the program. The unfair competition provisions of the Turkish Commercial Code (TTK), on the other hand, protect a fair competition environment in terms of competitors, customers, and market order. Therefore, while the use of unlicensed software violates the FSEK as it constitutes use of a work without the authorization of the rights holder, it can also be considered unfair competition under the TTK because it creates dishonest cost and marketing advantages against competitors. The fact that the same behavior produces results in two different legal spheres is therefore not contradictory but complementary from a systematic perspective.

This intersection is also consistent with the general tort logic of the Turkish Code of Obligations. Article 49 of the Turkish Code of Obligations states that whoever causes damage to another through a culpable and unlawful act is obliged to compensate for that damage. Article 57 of the same Code, concerning unfair competition, stipulates that a person whose customers decrease or who is at risk of losing them due to false news or other conduct contrary to the rules of honesty may demand that such conduct cease and that, if there is fault, their damages be compensated; it also states that the provisions of the Turkish Commercial Code are reserved in unfair competition related to commercial transactions. This structure shows that software piracy can be addressed together with both the special copyright regime and the general/special unfair competition and tort regimes.

What kinds of lawsuits can competitors file?

According to Article 56 of the Turkish Commercial Code, a person whose customers, credit, professional reputation, commercial activities, or other economic interests have been harmed or are at risk of being harmed due to unfair competition may request a determination of whether the act is unfair, an injunction against unfair competition, the elimination of the material consequences of unfair competition, the destruction of tools and goods if necessary, material compensation if there is fault, and moral damages if the conditions are met. The judge may also award compensation for any benefit the defendant is likely to obtain. This provides a strong set of legal options against a competitor using pirated software, focusing not only on "determination" but also on cessation, elimination, and compensation.

The same article also grants customers a certain degree of right to sue. Customers whose economic interests have been harmed or are at risk of being harmed can also file lawsuits under the first paragraph; they cannot, however, request the destruction of vehicles and goods. Chambers of commerce and industry, trade associations, stock exchanges, relevant professional and economic associations, and civil society organizations protecting the economic interests of consumers can also file lawsuits under certain clauses. This regulation shows that the unfair competition aspect of software piracy is not limited to competitor-competitor relationships; it also creates a broader area of ​​protection for customers and market actors.

Article 61 of the Turkish Commercial Code also explicitly regulates the possibility of precautionary measures. Upon the request of the person entitled to sue, the court may take measures to protect the existing situation, eliminate the material consequences of unfair competition, prevent unfair competition, and correct false or misleading statements. Furthermore, the second paragraph of the same article provides for measures such as seizure at customs for goods subject to unfair competition that constitute an infringement of the rights holder's authority and are punishable. Therefore, for commercially produced, reproduced, or commercially circulated forms of pirated software, not only the main lawsuit but also expedited protective measures may be considered.

What avenues can the rights holder pursue?

The primary axis for the rights holder of software is the Law on Intellectual and Artistic Works (FSEK). The claims for up to three times the original price under Article 68, the prohibition of infringement under Article 69, and compensation and profit transfer claims under Article 70 have significant consequences in commercial cases where piracy is prevalent. The existence of these claims does not conflict with unfair competition lawsuits arising from the Turkish Commercial Code (TTK), as one protects the rights of the author and the other protects the competitive order. In a specific case, both the rights holder and the injured competitor can go to court with different sets of claims according to their respective legal positions.

The criminal aspect is also important under the Law on Intellectual and Artistic Works (FSEK). Article 71 of the law stipulates imprisonment for one to five years or a judicial fine for anyone who, without the written permission of the rights holder, processes, represents, reproduces, modifies, distributes, publicly transmits, publishes, purchases, imports or exports illegally reproduced works for commercial purposes, or possesses or stores them for purposes other than personal use. Article 72 also contains a separate threat of punishment for programs or technical equipment designed to disable protective programs created to prevent the illegal reproduction of computer programs. Therefore, the criminal risk becomes even more pronounced in files containing cracks, keygens, and similar tools.

Does unfair competition also have a criminal aspect?

Yes, it also exists under the Turkish Commercial Code (TTK). Article 62 of the TTK stipulates that those who intentionally commit one of the unfair competition acts listed in Article 55; those who intentionally provide false or misleading information about their products and commercial activities; and those who, upon learning that their employees are engaging in a punishable act of unfair competition, fail to prevent it, may be punished, upon complaint, with imprisonment for up to two years or a judicial fine. This provision shows that if the unfair competition aspect of software piracy is carried out intentionally, a second line of punishment, outside of the Law on Intellectual and Artistic Works (FSEK), may also come into play in the specific case. However, here, it is not automatic conviction in every case, but intent, compliance with the relevant clauses, and the nature of the event are the determining factors.

Article 63 of the Turkish Commercial Code states that in cases of unfair competition committed within the scope of a legal entity's activities, the liability stipulated in Article 62 shall apply to the members of the organs or partners acting or required to act on behalf of the legal entity; furthermore, security measures may be decided upon against the legal entity. This regulation clearly demonstrates that in cases where pirated software has become company policy, is known to management, or is ignored, unfair competition cannot be considered solely as the behavior of lower-level personnel.

Employee, employer, and manager responsibility

Article 57 of the Turkish Commercial Code stipulates that if the act of unfair competition is committed by employees or workers, the lawsuits mentioned in subparagraphs (a), (b), and (c) of the first paragraph of Article 56 can also be filed against the employers. In claims for damages and moral damages, the provisions of the Turkish Code of Obligations apply. This shows that the company cannot easily escape claims for determination, injunction, and elimination of material damages by simply stating that "an employee installed the unlicensed program." The organizational nature of the act is particularly important in cases involving pirated software used on corporate devices, servers, or workflows.

Article 49 of the Turkish Code of Obligations (TBK), with its general tort rule and unfair competition provisions, strengthens the link between culpable conduct and damages. If a competitor claims to have lost customers or been subjected to price pressure due to an unlawful cost advantage gained by a business using pirated software, the proof and extent of this damage are evaluated in conjunction with the principles of the TBK. Furthermore, if more than one party is responsible for the same damage, the TBK may also invoke the principles of joint and several liability and recourse in internal relationships. Therefore, unfair competition cases based on software piracy require not only intellectual property expertise but also an assessment of contract and commercial law.

Statute of limitations, evidence, and litigation strategy

According to Article 60 of the Turkish Commercial Code (TTK), lawsuits mentioned in Article 56 must be filed within one year of learning of the right's existence, and in any case, within three years of the act's occurrence. However, if the act of unfair competition also constitutes an act punishable by a longer statute of limitations, that longer period also applies to civil lawsuits. This provision is important in software piracy cases because when the same act overlaps with both the offenses under the Copyright Law and the unfair competition offenses under the TTK, the calculation of the statute of limitations can become more complex than in a simple private law dispute.

The most important aspect of evidence is proving both the licensing status and its commercial impact. Simply stating that "a competitor is using pirated software" is often insufficient; it must be demonstrated which software is being used under which unlicensed usage model, how this affects costs, and how it impacts pricing, offers, advertising, or market behavior. The Turkish Commercial Code's regulations on the preservation of commercial books and documents also emphasize the obligation of businesses to keep records of their commercial transactions and electronic records. Therefore, license records, subscription statements, activation data, log records, price quotes, advertising content, customer contracts, and technical expert reviews play a critical role in such cases.

Why shouldn't companies view this simply as a "copyright issue"?

Because software piracy often has consequences on three separate fronts. The first front is the rights holder's claims for compensation, injunctions, damages, and penalties arising from the Turkish Copyright Law (FSEK). The second front is the competitors' claims for determination, injunctions, elimination of financial losses, damages, and precautionary measures arising from the Turkish Commercial Code (TTK). The third front is the risk to internal management and compliance; because knowingly using or condoning pirated software can also raise questions about the responsibility of company managers and organs. Therefore, these cases are not simply a matter of "let's buy a license and it will be over"; they can carry dimensions of market behavior and corporate responsibility.

Especially in sectors where price competition is key, the use of pirated software can act as an invisible subsidy. While legally compliant businesses bear the burden of licensing, maintenance, and subscription costs, if a non-compliant business can undercut prices without incurring these costs, the market outcome arises not from fair competition but from the imposition of illegal costs. The Turkish Commercial Code's principle of "fair and undistorted competition" precisely targets such distortions. Therefore, software piracy is not merely a matter of coordination between the technical team and the legal department; it is a direct issue of competition strategy and commercial risk management.

Conclusion

The legal link between software piracy and unfair competition is strong and concrete in Turkish law. Computer programs are protected as works under the Law on Intellectual and Artistic Works (FSEK); unauthorized use, reproduction, distribution, public transmission, and storage constitute copyright infringement. If the same behavior creates an unlawful cost advantage over competitors, misleads the customer, or violates business conditions imposed on competitors, it can also be classified as unfair competition under Articles 54 and 55 of the Turkish Commercial Code (TTK). In this case, the same act constitutes both an infringement of intellectual property rights against the rights holder and an act that disrupts the competitive order against competitors.

Therefore, the correct approach for companies is not to view software piracy simply as a "problem in auditing." The real issue is that unlicensed use affects pricing, bidding behavior, customer statements, and market balance. When the Turkish Copyright Law, Turkish Commercial Code, and Turkish Code of Obligations are read together, the picture that emerges is clear: unlicensed software can disrupt fair competition as much as it infringes on the rights of the copyright holder; this means liability for detection, injunction, claims up to three times the amount, compensation, precautionary measures, and in some cases, criminal liability. It is therefore essential for companies to address software license compliance not only as an IT issue but also as a competition law and commercial risk issue.

Frequently Asked Questions

Is software piracy always considered unfair competition?
Not every case automatically leads to the same conclusion. However, if unlicensed use violates legal or contractual terms of business imposed on competitors, creates a cost advantage, or is combined with misleading commercial statements to the customer, it may be considered unfair competition under Articles 54 and 55 of the Turkish Commercial Code.

What can I claim if a competing company is using pirated software?
According to Article 56 of the Turkish Commercial Code, you can claim a finding that the act is wrongful, an injunction, the elimination of the material damage, destruction if necessary, material compensation if there is fault, and moral damages if the conditions are met. You can also request a preliminary injunction.

Can the rights holder and the competitor file a lawsuit simultaneously?
Yes. Because the rights holder can assert copyright claims arising from the Law on Intellectual and Artistic Works (FSEK), while the competitor can assert unfair competition claims arising from the Turkish Commercial Code (TTK). These claims protect different interests and may arise from the same act.

Can company executives also be held responsible?
Yes, depending on the specific case. Articles 62 and 63 of the Turkish Commercial Code may introduce criminal liability and security measures specific to the legal entity for members of the board or related persons in cases of intentionally committed unfair competition acts and unfair competition committed within the scope of a legal entity's activities.

Does software piracy only result in compensation, or can it also lead to penalties?
Depending on the specifics of the case, criminal liability may arise under both Articles 71-72 of the Law on Intellectual and Artistic Works and Article 62 of the Turkish Commercial Code. In particular, actions such as unauthorized written reproduction, possession for commercial purposes, storage, or disabling protective programs carry a criminal risk.