Software as a Service (SaaS) is a fast-growing business model worldwide, including in Turkiye. It enables businesses to deliver software applications over the internet on a subscription basis. While the model offers flexibility and scalability for users, SaaS businesses must comply with a number of legal regulations to operate successfully in Turkiye. These legal requirements span areas such as data protection, taxation, intellectual property, consumer protection, and cybersecurity.
In this article, we will explore key compliance areas that SaaS businesses in Turkiye should address to ensure they meet their legal obligations and avoid risks.
1. Data Protection and Privacy Regulations
One of the most critical areas for SaaS businesses in Turkiye is ensuring compliance with data protection regulations. Turkiye’s Personal Data Protection Law No. 6698 (KVKK) regulates how personal data is collected, processed, and stored by businesses, including SaaS companies.
a. Consent and Data Processing
SaaS providers must obtain explicit consent from users before collecting their personal data. Informed consent is crucial for all data processing activities, which include collecting, storing, and using customer information. Users should be clearly informed about how their data will be used, and businesses must implement robust consent mechanisms.
b. Data Transfer Abroad
SaaS businesses often rely on global infrastructure, meaning they may need to transfer personal data outside Turkiye. KVKK restricts the transfer of personal data abroad unless specific conditions are met, such as transferring data to countries deemed to have adequate protection or securing permission from the Turkish Data Protection Authority (KVKK Board). For more details on the international data transfer issue, please check out the specific article on our website.
c. Data Security and Breach Reporting
SaaS businesses are required to implement technical and administrative measures to protect personal data from unauthorized access, breaches, or loss. In the event of a data breach, companies must notify the KVKK Board and affected individuals within 72 hours, following the EU GDPR guidelines.
2. Intellectual Property Protection for SaaS Solutions
Intellectual property (IP) is at the core of any SaaS business. Protecting software, trademarks, and other IP assets is vital to maintaining a competitive edge. Turkiye’s IP laws provide several mechanisms for safeguarding these assets.
a. Copyright for Software
Under Turkish law, software is considered a literary work and is protected under copyright law. SaaS businesses must ensure that they have proper copyright protections in place for their software, including registration when necessary, to prevent unauthorized use, reproduction, or distribution by third parties.
b. Trademark Protection
SaaS companies should also consider registering their brand names and logos as trademarks in Turkiye to prevent competitors from using similar branding. Trademark registration offers exclusive rights to use the trademark in relation to specific services and provides legal recourse against infringements.
c. Licensing and Open-Source Compliance
If SaaS businesses use open-source components within their software, they must comply with open-source licensing agreements. Additionally, SaaS providers need to ensure that their own software licensing agreements with customers are clear and legally enforceable.
3. Consumer Protection in SaaS Agreements
SaaS providers in Turkiye must comply with the Turkish Consumer Protection Law when offering their services to individuals. This includes obligations to provide clear, transparent information about the terms of service, subscription fees, and cancellation policies.
a. Subscription Contracts
SaaS businesses should ensure that their subscription agreements are compliant with consumer protection rules. These agreements must be clear and comprehensible, detailing the terms of service, pricing structure, and the user’s rights to cancel or modify the subscription.
b. Unfair Contract Terms
The law prohibits businesses from including unfair terms in consumer contracts. SaaS businesses should review their agreements to ensure that none of the terms are overly restrictive or place excessive burdens on the consumer, such as unreasonable cancellation fees or limited liability for service outages.
c. Right to Withdraw
Under consumer protection laws, individuals have the right to withdraw from SaaS contracts within 14 days without providing a reason. SaaS businesses must inform customers of their right to withdraw and provide easy means for doing so.
4. Cybersecurity and Compliance with IT Regulations
Ensuring robust cybersecurity measures is essential for SaaS businesses, as they store sensitive customer data. Turkiye has specific regulations regarding cybersecurity, and businesses must comply with these standards to protect against data breaches and cyber threats.
a. Cybersecurity Law and Guidelines
Turkiye’s National Cybersecurity Strategy and Action Plan outlines specific cybersecurity requirements for businesses handling data in the digital space. SaaS businesses must implement strong encryption methods, intrusion detection systems, and regularly update their software to prevent security vulnerabilities.
b. Third-Party Vendors and Cloud Security
SaaS providers that rely on third-party vendors or cloud services must ensure that these vendors comply with Turkish cybersecurity regulations. Third-party risks should be assessed, and contracts with vendors should include clear security obligations to protect customer data.
c. Incident Reporting and Response Plans
SaaS businesses should develop a comprehensive incident response plan to address potential data breaches or cybersecurity incidents. This plan should include protocols for notifying customers and authorities, restoring services, and mitigating future risks.
5. Common Pitfalls for SaaS Businesses in Turkiye
Many SaaS businesses in Turkiye face common pitfalls that can lead to legal issues or financial penalties. Being aware of these risks can help businesses take proactive steps to avoid problems.
a. Failure to Obtain Proper Licenses
One common issue is failing to obtain the necessary business licenses or registrations. SaaS businesses must ensure that they are properly registered with the Turkish authorities, including tax registration and licensing for digital services.
b. Non-Compliance with Data Protection Laws
Another common pitfall is failing to comply with KVKK data protection rules. SaaS businesses that do not have proper consent mechanisms in place or do not report data breaches within the required timeframe risk facing significant fines and reputational damage.
c. Unclear Terms of Service
SaaS providers should avoid drafting overly complex or ambiguous terms of service, which can lead to disputes with customers. Contracts should be clear, transparent, and easy for users to understand, avoiding unnecessary legal challenges.
Disclaimer: The information and opinions on this page are for general information and academic contribution purposes. It may not reflect the views of Otto Law and Mediation. Due to the fact that law is a dynamic field, the information and opinions on the site may be out of date. The articles on the site may not reflect the prevailing doctrine or common judicial practices in that field and may contain the author’s own legal convictions. The information and legal opinions on this site are not legal advice and these contents are not intended to be legal advice. It is recommended to seek professional legal support for specific cases. Otto Law and Mediation or the author of the relevant article are not responsible for the consequences of applying the information and opinions on the site to concrete events. We present it to your information.
