With the necessities and developments of the era that we are living in , the importance of virtual environments alongside physical and real-world settings has been increasing. The business world has been experiencing significant changes, and necessitating new approaches. As the boundaries of competition in the business world continue to expand, digital platforms have become one of the most intense battlegrounds. In this context, competition in digital environments among competing companies sometimes exceeds ethical boundaries, leading to unfair competition practices. So, what unfair competition acts do competing companies commit against each other online? Which methods can cause unfair competition? And how can companies develop legal solutions against these issues?
The issues discussed in this article are only intended to provide information on certain situations that arise within the scope of Article 55 of the Turkish Commercial Code and the legal remedies that can be followed. It does not include explanations regarding international regulations and does not constitute legal advice.
Unfair Competition Practices Amongst Competing Companies in Digital Platforms
Under the Turkish Law, unfair competition is defined as any behaviour that exceeds the boundaries of economic competition and violates the principles of good faith, causing harm to competitors or misleading consumers and affecting the relationship between traders and their customers. These actions can be direct or indirect, and in some cases, they may even be committed unknowingly. In this regard, it is possible that various acts can give rise to unfair competition in different forms. In addition, for more detailed and comprehensive information on unfair competition regulations in Turkish law, the article titled “What is Unfair Competition in Turkish Law and What Are Its Legal Consequences?” on our website can be reviewed.
- Dissemination of Defamatory and Misleading Content
Competing companies may consciously or unconsciously cause unfair competition by sharing defamatory or misleading content on digital platforms such as social media platforms, news websites, and corporate websites, thereby damaging their rivals’ reputations. For example, headlines such as “Are the products of Company A harmful to human health? Will the authorities take action?” could be used in order to manipulate customer perception negatively. Another example could be a website containing a misleading link that falsely implies an economic or managerial relationship, which may mislead consumers and undermine fair competition. Additionally, commercial advertisements sent via e-mail may also lead to unfair competition.
- Fake Negative Reviews and Complaints
Competing companies may create fake user accounts and act as real customers to post negative reviews and complaints on digital platforms such as social media, forums, e-commerce websites, and search engines to damage their competitors’ reputations.
- Disclosure of a Competitor’s Trade Secrets
Using former employees or internal sources to “leak” a competing company’s confidential information without their knowledge can result in serious legal consequences.
- Trademark and Domain Name Squatting (Domain Squatting)
Some competing companies engage in practices such as purchasing domain names similar to their rivals’ brands or company names to mislead customers and redirect them to their own platforms. These situations may be in the form of organising misleading campaigns by taking a domain name that contains the name of a competitor, or in the form of including relatively famous and well-known brands belonging to someone else in the domain name, or by creating a website using the name without the consent or permission of the person. In this regard, it should also be noted that the authority and duty to carry out Works and procedures reagrding the allocation of domain names with “.tr” has been granted to the Information and Communication Technologies Authority (BTK) under the “Regulation on Internet Domain Names” published and entered into force on 7 November 2010.
- Sabotaging a Competitor’s Search Engine Optimization (SEO) Performance (Negative SEO)
Search engine optimization, also known as SEO, helps search engines understand the content of the website and to decide whether your target audience of users will find and visit your website. However, from time to time unethical and dishonest actions of competing companies to sabotage the SEO performance of their competitors, such as sending spam backlinks to lower a competitor’s ranking in search engines or spreading negative news about their competitors to damage their brand reputation, also lead to unfair competition.
Legal Remedies and Some Other Procedures Against Unfair Competition Acts in the Digital Environment
- Sending a Legal Notice to the Company Engaging in Unfair Competition
To prevent a competing company from engaging in unfair competition, a formal warning letter can be sent via notary. Additionally, unlawful content removal requests can be submitted to digital platforms, though this approach may be temporary since the content can be re-uploaded. Seeking legal counsel during this process is crucial to ensure smooth legal proceedings.
- Filing Unfair Competition Lawsuits Under Article 56 of the Turkish Commercial Code (TCC)
Legal actions, such as cases for the determination of unfair competition, (prevention) prohibition and/or elimination of the material situation as a result of unfair competition, can be taken against competitors engaging in unlawful conduct under Article 56 of the TCC. Also regulated in the same article, actions for pecuniary damages based on unfair competition and actions for moral damages based on unfair competition are among the action options that may be filed.
To briefly summarise, pursuant to Art. 56 of the TCC anyone whose customers, credit, professional reputation, commercial activities or other economic interests are damaged or who may face such a danger due to unfair competition can file the following lawsuits:
- Unfair Competition Determination Lawsuit: To determine whether an act constitutes unfair competition.
- Unfair Competition Prevention Lawsuit: To prevent ongoing or potential repetition of unfair competition.
- Prohibition of Unfair Competition Lawsuit: To eliminate the material consequences of unfair competition, correct misleading statements, and, if the infrigement is inevitable, destroy tools or goods that are used in unfair competition.
- Compensation for Pecuniary Damages: If fault exists, compensation for damages and losses can be claimed.
- Compensation for Non-Pecuniary Damages: If the conditions under Article 58 of the Turkish Code of Obligations are met, non-pecuniary damages can be claimed.
- Filing a Criminal Complaint Under Article 62 of the TCC For Unfair Competition In Cases Where The Acts of Unfair Competition Are Punishable by Penalty:
In addition to compensation claims through civil lawsuits, a criminal complaint can be filed if the conditions for a criminal offence exist. In this respect, Article 63 of the TCC, which regulates the criminal liability of legal entities, should also be considered. Notably, this offence requires a complaint to be filed for prosecution.
- If The Act of Unfair Competition Is in The Nature of Trademark Infringement, a Lawsuit May Be Filed Within The Framework of The Industrial Property Law No. 6769:
If an unfair competition act infringes/violates the registered trademark rights, it is possible for the trademark owner to file a lawsuit for infringement of the trademark right.
- Filing a Complaint to the Competition Authority and/or the Ministry of Trade
In cases involving misleading advertisements or consumer rights violations, it is possible to apply to the Competition Authority or the Ministry of Trade.
In summary, digital unfair competition practices among competing companies can have serious consequences, not only in terms of business ethics but also legally. The cases and legal remedies discussed in this article may vary depending on the specifics of each situation. Therefore, companies should seek legal counsel to avoid negative outcomes, take necessary precautions, and actively manage their reputation while utilising legal remedies against unfair competition.
Buse Ceylin Şahin