Unfair Competition: Leading to a Violation or Termination of a Contract and Unfair Competition Cases

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Uçar Law & Consultancy Office

Uçar Law & Consultancy Office

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The liberal economic system adopted as a modern view is based on free competition. Competition, which is defined as the competition to achieve better and get better results between real or legal persons dealing with the same business, is a right guaranteed by the Constitution. However, if the actions taken while trying to achieve better are carried out without complying with the law, morality, and honesty rules, then competition turns into unfair competition and faces certain sanctions within the legal system.

 

PRINCIPLES THAT DOMINATE UNFAIR COMPETITION

1) No Obligation of the Parties to be Competitors

According to Article 54 of the TCC, “Deceptive or other acts contrary to the rule of good faith and commercial practices that affect the relations between competitors or between suppliers and customers are unfair and unlawful.” If a person is in unfair competition, she /he usually desires to gain another’s work, though, prestige by unfair behavior for her/his benefit. But unfair competition is not only a problem of competitors. It concerns everyone present on the market, that is, the manufacturer, the distributor, the seller, the customer, and the professional associations. In this case, the formation of unfair competition is not adjacent to the existence of a competitive relationship.

2) Existence of Deceptive or Integrity Behavior

3) The Perpetrator Does Not Need to Receive Benefits

4) Failure to Seek Fault of the Perpetrator: A defect is a condition that is necessary only in compensation cases that will be filed as a result of unfair competition.

5) Absence of the Condition of Damage: According to Article 56 of the TCC, as it can be understood from the text of the article that continues, “A person whose customers, credit, professional reputation, commercial activities or other economic interests are damaged or may face such a danger due to unfair competition…” as it can be understood from the text of the article that continues, the condition of being damaged is not necessary for the claim of unfair competition.

 

In our legal system, unfair competition is regulated in two different places, the Turkish Code of Obligations and the Turkish Commercial Code. The cases of unfair competition are regulated in the TCC, but this counting is not limited. Cases of unfair competition are regulated under 6 main headings in TCC article 55 and there are detailed provisions under each heading. To list these six headings, 1- Commercial practices against the rules of integrity 2- Directing the contract to tender or terminating the contract 3- Unauthorized Utilization of Others’ Business Products 4- Unlawfully revealing production and business secrets and making unfair use of them 5- Failure to comply with business terms 6- Using general terms and conditions against the integrity rule.

If we need to examine in detail the title of “Tendering or Leading to Termination of the Contract”, four different cases of unfair competition, which are not limited in number, are listed in article 55 1/b of the TCC. These are as follows;

“1. To direct them to act contrary to the contracts they have made with others to be able to make, contracts with the customers themselves,

Accordingly, the situation seen here is that a competitor requests the customer not to comply with the obligations arising from the contract that the customer has arranged with someone else to replace the other competitor with the customer.

2. Providing or offering benefits to employees, proxies, and other assistants of third parties that they do not deserve and that may lead them to act contrary to their obligations in the performance of their jobs, to try to benefit themselves or others,

The benefit promised or provided here is not necessarily monetary, the important point is that an unjustified benefit has been promised or provided to the assistants. The owner of the business doesn’t need to be damaged due to this promise or supply. However, if the provided or promised benefit is of ordinary value in the business world, then this act does not fall within the scope of unfair competition.

3. Directing workers, their representatives, or other auxiliary persons to disclose or seize the production and business secrets of their employers or clients,

Publicly available information, records, and documents cannot be classified as secrets. For something to be classified as a secret, it must be kept confidential and necessary precautions must be taken to keep it secret. Persons who obtain such information, records, and documents by deceiving their assistants shall be deemed to have committed an act subject to unfair competition.

4. To direct the buyer or borrower who has entered into a sales contract by installment, cash sale, or consumer loan to withdraw from this contract or the buyer who has entered into a cash sale contract to terminate this contract so that he/she can enter into such a contract.”

 

LEGAL REMEDIES IN CASE OF UNFAIR COMPETITION

Legal remedies may be taken against the person who engages in unfair competition under the conditions stipulated by the law. Lawsuits on unfair competition; Since it is counted as an absolute commercial lawsuit according to Article 4 of the TCC, commercial courts of the first instance are authorized courts.

i. Injunction:According to Article 61/1 of the TCC, “At the request of the person who has the right to file a lawsuit, the court decides to preserve the current situation as it is, to eliminate the material situation resulting from unfair competition as stipulated in subparagraphs (b) and (c) of the first paragraph of Article 56, It may decide on the prevention of unfair competition, the correction of false or misleading statements and other measures following the provisions of the Code of Civil Procedure on the interim injunction.”

“In addition, the goods subject to unfair competition, which requires punishment in case of infringing on the rights of the right holder, may be seized by the customs administrations as a precautionary measure upon the request of the right holder during import or export.”

“If a lawsuit is not filed in the relevant court on the merits or a precautionary decision is not taken from the court within ten days from the notification of the injunction or seizure decision at the customs administrations, the seizure decision of the administration shall be nullified.”

According to Article 390 of the Code of Civil Procedure, “Injunctive injunction, before filing a lawsuit, is from the court that is in charge and authorized on the merits; After the lawsuit is filed, it is only requested from the court where the main lawsuit is heard.” In addition, according to article 397 of the Code of Civil Procedure, “If the interim injunction decision is given before the lawsuit is filed, the requester has to file his/her case on the merits within two weeks from the date on which he/she requests the enforcement of this decision, and to submit the document indicating that he/she has filed the lawsuit to the file with the application of the decision and in return for a lawsuit. must obtain documents. Otherwise, the measure will be lifted automatically. The effect of the interim injunction will continue until the final decision is finalized unless otherwise stated. If the measure has been lifted or lifted, this matter is notified to the relevant authorities. The injunction file is considered an annex to the original case file.”

 

ii. Detection Case: The case filed to determine whether there is a positive or negative legal relationship or situation is called the determination case. The determination case is the predecessor of the action for performance. This case was settled both in the Code of Civil Procedure and the TCC. When there are not sufficient conditions for filing an action for performance and to determine this legal relationship, a determination lawsuit can be filed, which will constitute conclusive evidence. This relationship must be concrete. An intangible legal problem does not constitute the subject of the case. For the plaintiff to file this lawsuit, it is also necessary to have a legal benefit to be protected.

 

iii. Case of Prohibition: This case is like an action case. With this lawsuit, it is requested to prevent or prevent the repetition of this act, which causes unfair competition and continues. The condition of this case is either the continuation of the act giving rise to unfair competition or the presence of strong indications that this act will be repeated. When the danger is over, the right to sue for prohibition also disappears.

 

 

iv. Case for Suspension of Unfair Competition: In this case, which is like a reinstatement lawsuit, the elimination of the material situation as a result of unfair competition, if unfair competition is made with false and deceptive statements, correcting these statements with the truth and preventing infringement, if it is obligatory to prevent the processing of goods that cause unfair competition. and tools must be eliminated.

 

6) Compensation Action: Material and moral compensation based on unfair competition can be filed. For financial compensation to be opened, the condition of the fault must exist. In other words, a loss must occur due to the faulty action of the person who committed the act that is the subject of unfair competition, and there must be a causal link between the damage and the fault. The plaintiff must prove that he has suffered damage due to the act that is the subject of unfair competition and the value of the damage. If the plaintiff cannot prove the value of the damage, then the judge determines the amount of the damage equitably. If the conditions in TCO article 58 are met, non-pecuniary damages can be opened. A real or legal person has the opportunity to file a non-pecuniary damage lawsuit.

 

PLAINTIFFS

Article 56 of the TCC regulates who can file lawsuits related to unfair competition. According to this;

  1. A person whose economic interests are damaged or who may face such danger due to unfair competition, and
  2. Customers whose economic interests are damaged or who may face such a danger shall be liable for all unfair competition lawsuits.
  3. Professional and economic unions, non-governmental organizations, and public institutions that take care of the interests of the consumer, on the other hand, have the opportunity to file detection, suspension, and prohibition cases.

 

DEFENDANTS

As a rule, lawsuits related to unfair competition are brought against the person who committed the act of unfair competition. In addition, lawsuits related to unfair competition can also be filed against the press, broadcasting, communication, and information institutions.

 

STATUTE OF LIMITATIONS 

According to Article 60 of the TCC, “The lawsuits written in Article 56 are time-barred after one year from the day the party entitled to the lawsuit learns about the birth of these rights, and probably three years after their birth. So far, if the act of unfair competition is also a criminal act that is subject to a longer statute of limitations as per the Turkish Penal Code No. 5237 dated 26/9/2004, this period is also valid for civil cases.

However, it is not possible to talk about the statute of limitations in cases of prohibition. As long as it is possible to talk about the existence of unfair competition or the danger of unfair competition, a case of prohibition can be filed. As soon as these situations disappear, it is not possible to talk about the possibility of filing a case of prohibition.

The presentation material about the presentation conducted by Berfin SAHIN, Uçar Law & Consultancy Office summer intern, can be found here:

Uçar Law & Consultancy Office – Berfin Şahin – Unfair Competition Presentation Material

You can contact us for further information and to take advantage of our advocacy and consulting services. You can find detailed information about our office’s work on Corporate LawContract Law and Consumer Law on our website.

Berfin ŞAHİN (Summer Intern)

Uçar Law & Consultancy Office

Diclaimer:

This article is prepared by Uçar Law & Consultancy Office for information purposes only, and the information and visual materials contained in it cannot be used, reproduced, published, transmitted to a third party or translated without prior written permission from us. This legal memorandum is not a comment or legal opinion and was prepared on the publication date and our attorney’s office is not responsible for its failure to
update continuously.”

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