In the “Çiçeksepeti” judgement of 15 November 2021, the 3rd Civil Chamber of the Turkish Court of Cassation assessed whether an online marketplace is liable for the defective goods and services supplied or sold by the third party. The Court of Cassation issued a controversial judgement that is subject to criticism.
Çiçeksepeti, is an online marketplace in Turkey that provides delivery services of flowers, gifts and gourmet products. It is an online platform where consumers can order flowers, gourmet products, fruit/ chocolate baskets and souvenirs to be delivered in all cities of Turkey.
The subject of the lawsuit is mainly the refund that was requested by the consumer from Çiçeksepeti, after the defective goods were delivered. A cigarette was found in the truffle package that the consumer bought through the website of Çiçeksepeti. The 5th Bakırköy Consumer Arbitration Committee accepted the case and made a judgement in favour of the consumer. Thereupon, Çiçeksepeti requested the annulment of the decision due to the absence of hostility, claiming that Çiçeksepeti is an online marketplace and not a seller/supplier.
The 5th Bakırköy Consumer Court, which examined the request, stated that the consumer was shopping on the platform with the impression that Çiçeksepeti was the owner of the goods. The court stated that Çiçeksepeti received a commission from the supplier company and therefore was liable for the services which were provided. It argued that it was also possible for Çiçeksepeti to recourse to the company that supplied the goods after returning the payment to the consumer. Thus, the court denied the request.
Upon this decision, Çiçeksepeti requested an annulment for the benefit of the law from the Turkish Ministry of Justice. In the request, once again it has been claimed that Çiçeksepeti is not a seller or supplier. It is argued that Çiçeksepeti is only acting as an intermediary service provider and that it cannot be held liable for defective goods in accordance with the safe harbour exemption article 9 of the Law No. 6563 on the Regulation of Electronic Commerce (“E-Commerce Law”).
The 3rd Civil Chamber of the Court of Cassation reversed the judgement of the Bakırköy 5th Consumer Court on the grounds that Çiçeksepeti is an online intermediary service provider that provides e-commerce opportunities over the internet and cannot be qualified as a seller on the distance contract concluded by the customer/consumer. Thus, the High Court annulled the judgement.
According to the criticism of Professors Erdem BÜYÜKSAĞİŞ and Defne KAHVECİ, the High Court did not properly apply the relevant legal principles, ignored the state of the technology, and finally reached an outcome that is not in line with the vision and objectives of the lawmaker. The criticisms, which I agree with, are mainly grouped under two headings by the authors. (See: Büyüksağiş, Kahveci /A critical analysis of “Çiçeksepeti” judgement/ Journal of the Court of Cassation (Yargıtay Dergisi) volume: 48, 2/2022, pp. 305-320)
1- “Safe Harbour” Exemption
Pursuant to Article 9 of the Turkish E-Commerce Law, “Internet service providers neither have the duty to monitor information they transmit or store, nor are they liable for mere conduit or caching. Unless they have knowledge of the infringement or do not take down the infringing content expeditiously after having obtained knowledge, Internet service providers cannot be held liable.”
Intermediary service providers will not be liable under any circumstances for the content offered and intermediary service providers can only be held liable if they are aware of the violation or do not promptly remove the infringing content after becoming aware of it. With this regulation, which aims to relieve intermediary service providers from liability and are called “safe harbours”, online service providers are exempted from liability in terms of copyright or intellectual property violations, as well as all kinds of torts that occur online. However, the scope of this exemption regime is limited. Recital 42 of the EU E-Commerce Directive nevertheless reduces the scope of application of these safe harbour provisions to only mere technical, automatic and passive platform activities.
Regarding the E-Commerce Directive, it is necessary to determine the situations in which intermediary service providers can be described as active and passive. The main issue that should be considered when distinguishing an intermediary service provider as active or passive is the role it plays during the conclusion and performance of the contract. According to one of possible interpretations of the Directive, for an online platform to be active it needs to provide the essential services required by the selling process. Passive online platforms let a third-party supplier pack and ship its product directly to the consumer, while active platforms provide assistance to consumers while picking from the seller, and packing and shipping the product to the consumer.
The Court of Justice of the European Union also recognizes that there is no right to benefit from the “safe harbour” exemption where online platforms play an active role in such a way that they can gain control over the data of buyers and suppliers and affect their behaviour.
In the “Çiçeksepeti” judgement of the Court of Cassation, no distinction was made between active and passive intermediaries. The effect of online marketplaces and digitalization on commercial activities was not fully understood at the time the E-Commerce Law was prepared, therefore it envisaged a general “safe harbour” exemption regime covering all brokerage activities.
However, this should not mean that a law that has not yet been revised in a way that can keep up with the technological development in distance selling should be applied today as it was at that time. By interpreting the provision of article 9 of the E-Commerce Law according to the purpose of article 14 of the EU E-Commerce Directive, it can only be applied to passive online marketplaces.
When the “Çiçeksepeti” judgement is examined, it will not be difficult to reach the conclusion that Çiçeksepeti is engaged in an active activity. Çiçeksepeti makes agreements with many shipping companies to provide discounts to sellers, and in some cases, undertakes the shipping costs entirely. Suppliers are only allowed to communicate with the buyer/ consumer through Çiçeksepeti, and the buyer/consumer is charged by Çiçeksepeti. Materials such as card notes and cargo bags have the Çiçeksepeti logo/title on them, which can be obtained through a separate application belonging to Çiçeksepeti, and can be used for packaging and shipping of the goods.
If these opportunities provided to suppliers when they use the Çiçeksepeti platform are evaluated as a whole, it is clear that Çiçeksepeti plays an active role in the relationship between the consumer and the producer/supplier and it is not passive. Therefore it should fall outside the scope of the “safe harbour” regulation in Article 9 of the E-Commerce Law.
2- Liability as Seller of Online Marketplaces
Signing and concluding the contracts with both suppliers and customers, the online marketplace may combine elements of agency, brokerage, commission, consignment, and shipment. This leads to the question of whether an online marketplace may be held liable, along with the supplier, for the damage caused by defective goods sold on the platform. The answer depends on whether the online marketplace can be classified as a seller in its relationship to a particular customer.
According to the article 3, paragraph 1-i of the Turkish Consumer Protection Law No. 6502, “Natural or legal persons, including public legal entities, who offer goods to the consumer for commercial or professional purposes or act on behalf of the supplier” are considered sellers. Not only natural or legal persons offering goods to the consumer, but also those acting on behalf of these persons or giving the impression that it is the seller are defined as sellers.
Although the definition of the seller in the Turkish Consumer Law is included in the Çiçeksepeti judgement, Çiçeksepeti is not considered within its scope. The Court of Cassation should also have considered whether the platform was acting on behalf of or giving the impression that it is a seller.
Moreover, it can be easily seen that Çiçeksepeti played a more active role in the marketing process. Even if Çiçeksepeti has no direct control over third-party suppliers, Çiçeksepeti gives the impression that it is the owner of the goods. The customers cannot directly contact the seller/ suppliers, and sellers ship their products with the cards written “Çiçeksepeti” and not with their own company name. Moreover, consumers make the payment directly to Çiçeksepeti and it does not let the suppliers ship the products directly to the consumers. It has made agreements with shipping companies for this purpose. These can be accepted as Çiçeksepeti is giving the impression that it is the seller. However, the High Court did not examine this issue in its judgement.