NEWS AND INSIGHT

Digital Platforms Under Scrutiny: Unfair Commercial Practices in Light of Competition Board’s Decisions


22 October 2024

Digital Platforms Under Scrutiny: Unfair Commercial Practices in Light of Competition Board’s Decisions

  1. Introduction

The Press Bulletin of the Advertising Board Meeting No. 349, dated September 10, 2024, (“Bulletin”), was published on the official website of the Ministry of Trade on October 7, 2024. The Bulletin contains the Advertising Board’s (“Board”) reviews and decisions based on complaints directed at the Board. The Bulletin includes decisions related to 10 different sectors, including communication services, durable goods and technology, various other goods and services, cosmetics and cleaning products, unfair commercial practices, financial services, food, health, covert advertising, tobacco, and alcohol.

In this study, we focus on the incidents and investigations under the heading of unfair commercial practices in the Bulletin.

  1. Unfair Commercial Practices

The advertisements categorized under unfair commercial practices by the Board stand out due to the fact that the media in which they were broadcast were internet platforms. Advertisements and practices on platforms offering services through digital platforms with global roots, such as YouTube, Netflix, Amazon Prime, Disney+, and BlueTV, were scrutinized.

In the investigations under the unfair commercial practices heading of the Bulletin, activities such as pre-selection of the options offered by the Platforms, differentiating a service from other services by using striking expressions, making free trial periods a part of the subscription and processing financial data in this context, and making the processes encountered when registering for a service difficult during the termination phase of the service draw attention.

  • Pre-Selected Options

Nowadays, practices involving pre-selected options presented to users as a marketing technique have become a common method across various sectors.

It is known that offering pre-selected subscription service options undermines users’ independence in decision-making. The pre-selected options presented to users may be considered unfair commercial practices as they influence users' choices. Even explanations such as a lower monthly fee for the annual subscription package compared to the monthly one are not accepted as reasonable justifications for this practice.

For example, it was decided to halt the practice on the Disney+ website, where the "Annual Subscription" option was pre-selected on a page offering both "Monthly Subscription" and "Annual Subscription" options, as this was deemed to steer users towards choosing the annual subscription package.

Another example is found on the www.fintables.com website owned by Fintables Bilişim Sistemleri Teknoloji A.Ş., where "Lite" and "Pro" subscription packages were offered with both monthly and annual options. It was determined that the "Annual Subscription" option was pre-selected and that the more expensive "Pro" package was highlighted in blue, drawing attention. In the company’s defense, it was stated that the target audience consisted of financially literate and conscious investors, and that the blue-green colors matched the company logo. However, it was concluded that pre-selecting the annual subscription option and prominently highlighting the "Pro" package influenced users' decisions, and the commercial practices of Finetables were ordered to be discontinued.

Other examples of pre-selected subscription options were seen on platforms such as YouTube, Netflix, MUBI and The Board decided to impose a cessation penalty on all these practices.

  • Distinguishing a Service Using Striking Phrases

In marketing activities on digital platforms, every phrase presented to users must have a concrete basis and proof.

As seen in the decisions in the Bulletin, it was stated that if platforms use phrases like "MOST PREFERRED" or "MOST POPULAR" while offering their subscription options, the claims made must be verifiable. Otherwise, these statements are considered misleading to users.

For example, it was noted that the “Pro” subscription package offered by Finetables was described as the “MOST PREFERRED,” distinguishing it from the alternative. However, documents submitted by Finetables to the Board showed that the “Pro” package was indeed the most preferred by platform users, so the statement was found not to violate regulations.

On the other hand, an adverse example was the Storytel platform, where the phrase "Most Popular Choice" was used on its "Unlimited" subscription type, but there was no information provided about the criteria on which this claim was based, leading to its classification as an unfair commercial practice.

To ensure legal compliance when distinguishing a service using striking phrases, users must be clearly and explicitly informed about what the distinguishing phrase means (such as the number of purchases made during a certain period).

  • Inclusion of Free Trial Periods as Part of Subscriptions and Processing of Financial Data

The Board examined activities such as requiring users to provide credit card information to take advantage of free trial offers and automatically renewing subscriptions after the free trial period ends.

It was determined that financial data was processed as part of free trial offers on digital platforms such as Spotify, Amazon Prime, MUBI, Storytel, and YouTube, and that an automatic subscription was initiated by collecting credit or debit card information.

Upon examining these platforms and their practices, it was found that the free trial period was presented to users as part of the subscription agreement. However, it was noted that the free trial offers created an expectation among users to benefit from the service only during the trial period without initiating a new subscription process.

In the evaluation based on average users, it was determined that expressions like "Try it free for 1 month" created the expectation that users would only benefit from the service for a limited time without sharing payment information or entering into a new subscription agreement.

Since many applications were found to automatically start subscriptions at the end of the free trial period, it was determined that the concept of "free trial" was misleading to users and did not meet their expectations. Forcing users to provide credit or debit card information for a free trial was considered an unfair commercial practice.

To avoid being classified as an unfair commercial practice, free trial offers must be accompanied by clear information to users if the free trial period is part of a subscription agreement. In cases where this information is not provided, or if the free trial is not part of a subscription agreement, the service must automatically terminate at the end of the trial period without requiring further action from users if they are not satisfied with the service.

For example, on the Fizy platform, the statement "After subscribing to one of the packages, you can benefit from the first month free offer. After the campaign, your membership will continue at standard fees for the selected membership. You can only benefit from the first month free offer once." was found to be sufficient to explain that the "First Month Free" campaign meant no fees would be charged for the first month, and thus no violation of regulations was found.

  • Complicated Steps and Dark Commercial Designs

Dark commercial designs refer to designs that negatively impact users’ decision-making or choice by forcing them to take certain actions to access a feature. When a user easily enters a situation but later cannot exit it with the same level of ease, it indicates the use of a dark commercial design, which constitutes a violation of the principles of fair competition.

For example, while the process of creating a user account on the Spotify platform was found to be simple and easy, it was determined that the screen for "Account Closure and Data Deletion" was more complex.

Additionally, the user’s consent for account closure and data deletion was repeatedly requested. These practices were found to violate the principles of fair competition and were classified as unfair commercial practices since they significantly distorted the economic behavior of users in relation to a product or service.

  1. Evaluation and Conclusion

As the use of digital platforms increases, the number of complaints directed to the Board rises proportionally, resulting in a comprehensive Bulletin. This study focuses on the unfair commercial practices of digital platforms within the scope of the Press Bulletin of the Advertising Board Meeting published by the Ministry of Trade. In particular, marketing strategies of global platforms providing services via the internet that direct users and how these strategies are evaluated by the Board have been examined.

The Board's classification of practices such as pre-selected subscription options, distinguishing a service with striking phrases, misuse of free trial periods, and the use of dark commercial designs that make it harder to exit a contractual relationship than to enter it, demonstrates increasing attention to commercial practices affecting user experience on digital platforms. Misleading and coercive commercial behaviors are increasingly subject to sanctions.

In conclusion, the transparency of services offered by digital platforms, user-friendly designs, and accurate information provision obligations have gained importance. Conducting commercial activities in the digital environment requires platforms to be more careful to avoid unfair commercial practices. The decisions of the Competition Board in this regard set a precedent for the sector and provide an effective enforcement mechanism against unfair commercial practices.