29 Aug Brıef on Personal Data Protectıon Board’s Decısıon Regardıng Loyalty Programs
The Personal Data Protection Board (“Board”) provides guidance on how to collect data lawfully with its decisions to the companies who wish to do so. In this context, the Board; with its evaluations made within the scope of the Law No. 6698 on the Protection of Personal Data (“KVKK“), does not only impose administrative fines, but also presents companies a compass on what is lawful. With this decision, which is the subject of our article, the definition of loyalty programs and the distinction between additional benefit and the main activity are made.
Within the framework of the Board's decision dated 05.07.2019 and numbered 2019/198, the issues (i) whether the special discounts given through the loyalty program are “additional benefits” and (ii) whether these additional benefits can be tied to the condition of explicit consent have been evaluated within the scope of KVKK.
In the complaint submitted to the Board, it has been stated that; there were discounts applied which are special to the loyalty card, thus making said special discounts conditional, the personal data of the customer is required for membership and card supply to the loyalty program in question and explicit consent is imposed as a condition.
The data controller made the following claims in its defense; (i) the loyalty program is completely optional and non-members of the loyalty program can shop at the market and the discounts are an additional benefit, (ii) requiring explicit consent for the additional benefits does not eliminate the condition of "giving express consent with free will" (iii) this situation is clearly accepted in the European Union Legislation and (iv) the opinion of the Handbook on European Data Protection Law is paralle
In light of this information, the Board ruled that;
- price of the product decreases from 99.99 TRY to 79.99 TRY with the loyalty program,
- the customers who don’t want to take part in the loyalty program are able to continue shopping,
- procurement of discounts as an additional benefit within the context of the loyalty program, does not constitute imposition of explicit consent (which would harm the consent otherwise) and
- therefore there is no action to be taken within the scope of the law regarding the concerned complaint.
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The Board’s decision bear significance due to the fact that it clarifies the boundaries of the conditions of explicit consent for companies, which is a vital part of the personal data protection law. The Board has defined the concept of "additional benefit" while determining the limits of requiring explicit consent within the scope of the loyalty program. One of the highlights of the said decision is that this is not compatible with all loyalty program plans. Loyalty programs should not harm a person's ability to give explicit consent, and the subject of a loyalty program should never be the main service. However, Board’s such decisions show us that; even with tightened regulations, it is still possible for companies to achieve the desired results with the right legal assistance.
