New Consumer Protection Law No:6502 (“NCPL”) entered into force on 28.05.2014. While NCPL has new regulations in favour of consumers, it accordingly brings additional obligations for manufacturers, banks and vendors at the same time. Well, what does New Consumer Protection Law mean for software companies?

Sales Falling Under the Scope of Consumer Protection Law

As is known, Former Consumer Protection Law No. 4077 (“FCPL”) had been open to the discussions since its effective date, about who might be considered as Consumer and under protection of the Law. There have been even some contradictory decisions from different chambers of the Supreme Court on this matter.

Recently, the decision of the Supreme Court Assembly of Civil Chambers has clarified this matter and set the criteria for transactions and actors to be deemed in scope of consumer protection law as; “purchase of a product or service whether with commercial or occupational reasons”. According to mentioned decision; if the Merchant had purchased the product or service without a commercial or occupational reason, FCPL would cover the merchants as well.

Commercial purpose may be defined as generating an income by producing, importing/exporting, merchandising a product or service. Occupational purpose covers any kind of operation or transaction of a Merchant which is made for continuity of its business. It appears that the Supreme Court Assembly of Civil Chambers interprets a Merchant may conclude operations without “commercial/occupational reasons”. However this interpretation may only be effective for sole proprietorships and may not be applicable for equity companies. The majority opinion in the doctrine is that a company cannot carry out a transaction for purposes other than business related (occupational) purposes.

There is no difference between NCPL and FCPL in terms of these above-mentioned definitions.

Sale of Software License

Software Licenses Purchased by Consumers

Both FCPL and NCPL “cover” the software in “Goods” definition.

“h) Goods mean any movable property, immovable property used for dwelling or vacation purposes, and any software, audio or visual or other intangible goods prepared for use in electronic medium, subject to purchase or sale (Consumer Protection Law Art. 3)”

In this case, NCPL shall apply in relation to “the software which is licensed to consumers”. In other words, a consumer (who will, in most cases, be a real person), will be able to use his/her rights arising from NCPL for the software which was licensed for personal needs and use other than use for commercial or occupational reasons.

Software Licensed to Merchants (Companies) for Occupational Purposes

As we have mentioned above, software licenses which will be granted to Merchants for their business requirements will not be in scope of NCPL. Therefore, if there is a dispute about such software; “e.g. a software defect”, the dispute will be resolved under the regulations of Turkish Commercial Code and Code of Obligations.

Pursuant to above mentioned regulation, software licenses purchased by corporate firms for their business operations, such as ERP and SME software, shall be out of scope of NCPL; yet word/file processing licenses purchased for personal needs shall be subject to NCPL.

“Warranty” and “After-Sales Service” Liabilities in relation to Software falling under the scope of NCPL

“Regulation on Warranty Cards” which was issued on December 21, 2001 was annulled by a decision Council of State upon an application made on behalf of Turkish Software Industrialists Association (YASAD). There is no Regulation on Warranty Card for Software introduced since that day. According to justification of Council of State decision, it is not possible to issue such regulation under FCPL. In the decision, it is mentioned that software warranty can only be regulated as part of Law on Intellectual and Artistic Works.

The above mentioned principle of Council of State has also been adopted in “Warranty Regulation” and “After-Sales Regulation” which were issued as part of NCPL on Official Gazette dated June 13, 2014 and Software/Computer Programs were not included in the goods which are subject to a warranty card or required after-sales service.  

Sinem Birsin