FDI Update reports on recent legislation, international arbitration cases and enforcement decisions. It also brings news and insights from Turkey, the Middle East, Africa and CIS to guide investors that target foreing markets for expansion.
Liability Regarding Sales on Online Market Places: Çiçeksepeti Case
I’ve learned one of the more curious lessons of the profession early in career, in a client meeting. In a complicated project, the conduct of one of the parties had led to a chained breach of contracts of numerous other contractors. I was invited to a meeting by the client, who was the employer, to explain the steps forward and for the better part of an hour, I explained the complicated network of liability and contractual provisions with tables and charts. However, I noticed that the “big boss” got impatient after a while. After the meeting, I caught up with one of the company directors and asked him for feedback – I noted that I felt the big boss did not appreciate it. “It was good” the director said, “but you don’t need to prolong it. Next time, just tell us whose head we should knock off straight away.”
The Turkish Supreme Court of Appeals, with its recent decision (the 3rd Civil Chamber of the Supreme Court of Appeals’ judgment numbered 2021 / 4000 dated 15 November 2021, as published on the Official Gazette dated 25 January 2022*), has clarified the question of who we should be chasing for deliveries of unsatisfactory quality for the past Valentine’s Day, over a consumer dispute involving Çiçeksepeti (a website that delivers flowers, desserts and gifts especially for special occasions). Some products on Çiçeksepeti are sold directly by the company. For others, the company is merely an intermediary between the buyer and the supplier of the product. Granted – it is not easy to discern the identity of the supplier on the web site’s interface. The identity of the supplier is only clarified in full on the distance sales agreement executed online during purchase. You know that by now, in online shopping, it is a well-established custom (!) to approve these contracts without reading them first. The dispute arose specifically from this point.
A buyer ordering chocolate truffles over the Çiçeksepeti website requested a refund from Çiçeksepeti after she noticed that one of the truffles contained a cigarette stub (note: our readers familiar with the Anglo-Saxon legal culture will appreciate that this is not the worst thing that can pop out of an edible / drinkable product, thanks to Donoghue v. Stevenson). The Consumer Arbitration Board, and later upon Çiçeksepeti’s objection, the reviewing Court, ruled in favour of the buyer, on the grounds that “the buyer had purchased the product in dispute in reliance of the trust she had placed on the www.ciceksepeti.com name”. The Supreme Court of Appeals, however, approached the issue from a different angle. It stated that pursuant to laws applicable for distance sales, Çiçeksepeti is an “intermediary service provider” and further determined that the counterparty of the distance sales agreement in this case, was not the Çiçeksepeti company, but was the bakery that marketed its products that apparently had a high nicotine content on the web site. Seizing the opportunity, the Supreme Court of Appeals established an important principle by stating that “the intermediary service provider had no obligation to control the content provided by persons utilizing its electronic means, or to investigate the legal compliance of any goods or services that made up the content”. Therefore, it ruled that a refund could only be requested from the bakery, and absolved Çiçeksepeti of liability.
E-commerce legislation in the Turkish legal framework is still in development. The black-letter law cannot always catch up with the technology and the systems that are repeatedly developed and replaced by fast growing e-commerce companies. However – until at least the law provides otherwise – the Supreme Court of Appeals has set an important principle on intermediary service providers’ liability that will surely act as a precedent. As e-shopping afficionados, the best precaution we can take at this stage is to check whose head we can knock off in the distance sales agreements that generally appear at the payment stage, and take a judgment call on the seller’s reliability.