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ACTECON provides services to its local and international clients in the areas of competition law, international trade and regulations.

ACTECON draws its strength from its committed and solution-oriented team, extensive sector-specific knowledge, local and multinational expertise and know-how on the insights of the business world. ACTECON is experienced in offering effective strategies from the perspective of law & economics. The firm creates difference through its in-depth understanding of the global competition and the challenges of the global economy. The firm’s principles include international work ethic, commitment to provide value-added service and consistency in every aspect.

Focusing on competition law, ACTECON works with multinationals located in Turkey with the perspective of corporate compliance basis and international service standards. We currently provide services to multinationals in leading industries. Our services focus on implementing competition law compliance through our custom made Competition Compliance Program (also incorporating an e-learning base that is designed and owned by ACTECON), and representing companies in Turkish Competition Authority’s investigations.

ACTECON’s Trade Team has extensive experience in trade remedies and related custom problems, in-depth knowledge of the Turkish business world, and a well-established, excellent working relationship with Turkish public authorities including the Turkish Ministry of Trade.

ACTECON helps clients tailor solutions to execute industry-specific strategies and build strong cases in anti-dumping, safeguard and anti-circumvention investigations and customs applications of trade remedies.

ACTECON has represented and assisted both domestic and foreign interested parties in several cases in Turkey and abroad, working alongside clients and law firms.

As part of our regulations expertise, we design Data Protection Compliance programs for companies by implementing our extensive knowledge of various sectors.

Focus On

A New Age for Digital Markets in Turkey? The Draft Amendment to the Law No. 4054 on the Protection of Competition

Introduction

This blogpost will give an overview on the draft amendment (the “Draft Amendment”) to the Law No. 4054 on the Protection of Competition (the “Law No. 4054”). The key points of the Draft Amendment concern:

• Introducing definitions of core platform services into the Law No. 4054 and allowing the possibility to introduce regulations on the conducts of certain undertakings offering these same services;
• Determining the new obligations to be imposed on the undertakings holding significant market power in core platform services;
• Monitoring and auditing compliance with these obligations; and
• Providing certainty regarding the sanctions to be imposed in case the relevant undertakings fail to comply with the obligations.

This blogpost will provide overview on (i) the main definitions, (ii) the obligations to be imposed on the undertakings, (iii) the processes envisaged for compliance with these obligations, and finally (iv) amendments regarding the article about on-site inspections that are included in the Draft Amendment.

What are the Key Definitions Brought by the Draft Amendment?

The Draft Amendment primarily amends Articles 1 and 2 of the Law No. 4054, which regulate the purpose and scope of the Law, and extends the scope of the Law No. 4054 to cover the prohibited conducts and obligations to be imposed on the undertakings holding significant market power in core platform services to prevent them from abusing their market power.

Accordingly, the Draft Amendment provides additional definitions in Article 3 of the Law No. 4054. These definitions include detailed descriptions of the undertakings operating in digital markets and the services they offer.

Therefore, the relevant article of the Draft Amendment includes the definitions of the following terms, most of which are self-explanatory: (i) data that is not publicly available, (ii) undertaking holding significant market power, (iii) end-user, (iv) core platform services, (v) online intermediation services, (vi) online search engine services, (vii) online social networking services, (viii) video sharing platform services, (ix) number-independent interpersonal communications services, (x) operating systems, (xi) web browsers, (xii) virtual assistants, (xiii) cloud computing services, (xiv) online advertising services, (xv) business users and (xvi) ancillary services. The definitions of the main concepts of “undertaking holding significant market power” and “core platform service”, which are at the centre of the amendments, are provided as follows:

• Core platform services: The online intermediation services, online search engines, online social networking services, video/sound sharing and broadcasting services, operating systems, number-independent interpersonal communication services, cloud computing services, web browsers, and virtual assistants, and online advertising services provided by the provider of any of the aforementioned services.
• Undertaking holding significant market power: Undertaking that has a certain scale in terms of one or more core platform services and operates in a way that has a significant impact on access to end users or on the activities of business users and which has the power or is foreseen to be able to have the power to maintain this impact in an established and permanent manner.

Core platform services are regulated in a way to cover a range of services in digital markets. As seen above, the Draft Amendment adopts the same approach for the core platform services with the recently published Digital Markets Act (“DMA”) of the European Union and exhaustively lists the activities that will be subject to the obligations, in other words, core platform services. The Draft Amendment, however, foresees the issuing of an additional communiqué by the Competition Board (the “Board”) to determine the thresholds that will be relevant to make an assessment for the concept of undertakings holding significant market power.

How to Determine the Undertakings Holding Significant Market Power?

According to Article 3 of the Draft Amendment, for a core platform service provider to be considered as an undertaking holding significant market power, it is understood from the definition that the following conditions are required to be satisfied cumulatively:

• Having a certain scale in terms of one or more core platform services;
• Operating in a way that has a significant impact on access to end users or on the activities of business users; and
• Having the power or being foreseen to be able to reach the power to maintain this impact in an established and permanent manner.

These concepts are in line with the criteria for the designation of “gatekeepers” in the DMA. However, unlike the DMA, the Draft Amendment does not set out the limits of the criteria to be taken into account for an undertaking to be designated as an undertaking holding significant market power. These requirements will be introduced in detail by the communiqué (the “Communiqué on the Implementation of Article 8/A of the Law No. 4054”) to be issued by the Board within six months following the entry into force of the new amendments.

The Draft Amendment stipulates that the Board shall take into account two types of criteria while designating the undertakings holding significant market power. On one side, quantitative thresholds such as annual gross revenue, the number of end-users or the number of business users will be considered. On the other side, qualitative criteria such as network effects, data ownership, vertically integration and conglomerate structure, economies of scale and scope, lock-in and tipping effect, switching costs, multi-homing, user trends, mergers and acquisitions carried out by the undertaking will also be analysed.

Therefore, an undertaking may be designated as an undertaking holding significant market power by the Board either ex officio or upon complaint to be made by the third parties, based on qualitative requirements, even if the limits to be specified by the quantitative thresholds in the communiqué are not exceeded.

The process of designation of holding significant market power

First, the undertakings providing core platform services shall apply to the Competition Authority (the “Authority”) within 30 days in case they exceed the thresholds that will be determined by the Communiqué on the Implementation of Article 8/A of the Law No. 4054. Along with the application, undertakings may also submit their objections to the Authority, if any, about why they think they do not hold significant market power.

As a result of the evaluation to be carried out within 60 days following the completion of the application, the Board shall determine whether the undertaking holds significant market power and which of the obligations listed under Article 6/A of the Law No. 4054 the undertaking will be subject for each platform service it offers. As stated in the previous section, the Board may also make the same determination ex officio or upon complaint. In addition, the Board may, even if quantitative thresholds are not exceeded, reach a conclusion based on the assessment of qualitative requirements.

If the undertaking is designated to be holding significant market power, the Board shall determine a reasonable period of time, not exceeding 6 months, for the undertaking to comply with the provisions of Article 6/A.

The undertaking that is designated to hold significant market power may submit its objective justification defence regarding its inability to fulfil its obligations stipulated to the Authority, together with sufficiently substantiated and concrete information and documents, if any, within 6 months starting from the service of the decision. The Board shall evaluate and decide on whether it considers this defence within 60 days; if the Board does not accept objective justification, it shall decide that the relevant obligation shall be fulfilled.

In addition, the Board may, upon request or ex officio, change, review or withdraw its decision, in any of the following cases where:

• there is a significant change in any of the facts on which the decision designating the undertaking as holding significant market power was based on;
• the decision is based on incomplete, incorrect or misleading information provided by the undertakings;
• the obligations imposed are insufficient.

If the Board determines, ex officio or upon complaint, that the obligations stipulated are not complied with, the preliminary investigation or fully-fledged investigation will be launched as per Articles 40 and 59 of the Law No. 4054.

If the undertaking is designated to hold significant market power, this decision will be valid for 3 years. In case the undertaking does not apply to the Authority within 90 days before the end of the 3-year period, the relevant undertaking is deemed to hold significant market power for the next 3 years, as well.

What are the Obligations that the Undertakings Holding Significant Market Power Should Comply with?

The Draft Amendment provides a list of conducts to be added as Article 6/A to the Law No. 4054, which should be complied with by the undertakings holding significant market power. These are ex-ante obligations that undertakings should comply with in order to prevent anti-competitive conduct in the core platform markets for goods and services by undertakings holding significant market power, and to ensure the maintenance of a fair and competitive market structure in the core platform services provided by such undertakings. The communiqué (the “Communiqué on the Implementation of Article 6/A of the Law No. 4054”), which is envisaged to be issued by the Board within six months following the entry into force of the new amendments, will provide further information on the implementation of these obligations.

In parallel with the DMA, the obligations set out below will be applied, to the extent appropriate to all core platform services for undertakings that have been designated to hold significant market power.

Under the Draft Amendment, undertakings holding significant market power should;

• Refrain from discriminating their own goods and services in ranking, scanning, indexing or in other conditions, compared to the goods or services of business users and ensure that the relevant conditions are fair and transparent.
• Refrain from using the data that are not publicly available while competing with other business users.
• Refrain from making the goods or services offered to business users and end users dependent on other goods or services offered by themselves.
• Refrain from requiring business users or end users to subscribe or register with any core platform services of this undertaking holding significant market power as a condition for accessing, logging in or registering any core platform services.
• Allow end users to easily uninstall software, applications or app stores that have been preinstalled into the operating system of the devices, to switch to different software, applications or app stores, to install and effectively use third-party software, applications or app stores, to allow default settings to be easily changed, to allow third-party software, applications or app stores to be offered to user preference and chose by default and fulfil technical requirements in that regard.
• Refrain from restricting or obstructing business users, from working with competitor undertakings, from making offers to or making agreements with end users over platforms or other channels, from advertising their goods and services via these channels, and refrain from preventing them to offer different prices or conditions for a certain good or service while working with competitor undertakings over their own channels or over different channels.
• In a way as to prevent competitor undertakings from entering the market and to prevent those already in the market from competing effectively;
  • Not combine personal data they obtain from the core platform services with personal data obtained from any other services they offer or with personal data obtained from third parties.
  • Not process these data by combining or use it for / in the context of other services, especially in targeted advertising, unless it is necessary for the performance of a contract to which the end user is a party.
  • Not process the competitively sensitive data obtained from business users for purposes other than the provision of the relevant service, unless it provides clear, precise, and sufficient options to the business user.
• Provide relevant business users free, efficient, continuous, and real-time access to the aggregated and non-aggregated data which is provided by business users while using core platform services or ancillary services, or by end users of these business users or is produced within the scope of the activities of these parties on the relevant platform, upon request of the relevant business users and third parties authorized by them.
• Enable end-users using core platform services or ancillary services, business users, or end-users of such business users to, free of charge and effectively, transfer their data provided by them or generated within the scope of activities of these parties on the relevant platform, upon their request and provide free of charge tools to facilitate data portability.
• Enable the interoperability of core platforms services and/or ancillary services with other related products or services, efficiently and free of charge and fulfil the technical requirements for this.
• In order to maintain provision of core platform services or ancillary services by other undertakings, provide free of charge access to the necessary operating system, hardware or software features, limited to the relevant core platform service, and fulfil the technical requirements for this.
• Upon their request, provide business users with adequate information on the scope, quality and performance of core platform services and ancillary services, as well as pricing principles and conditions of access to these services.
• Provide to the advertisers, publishers, advertising intermediaries which it provides online advertising service or to third parties that are authorized by those, free, continuous, and real-time complete information about the commercial terms regarding offers and access to advertising verification and performance measurement tools and the data required for the use of these tools.
• Refrain from discriminating between business users by imposing unfair or unreasonable terms on business users.

What are the Fines in Case of Non-Compliance with the Obligations?

The Draft Amendment also includes provisions on administrative fines and remedies to be applied in case of a failure to comply with the above-mentioned obligations.

Accordingly, similar to a case of violation of core competition law articles of the Law No. 4054, the Board may decide to apply structural remedies in the form of requiring undertakings to transfer certain businesses, partnership shares or assets in the event of a failure to comply with the obligations stipulated under Article 6/A of the Law No. 4054. Unlike a violation of Articles 4, 6 and 7, a violation of Article 6/A can directly motivate a decision ordering a structural remedy, without the need to issue a prior behavioural remedy in a previous decision.

In such a case, it will be sufficient to demonstrate that the behavioural remedy will not yield any result.

One of the most relevant amendments envisaged by the Draft Amendment is the administrative fine to be imposed on the undertakings holding significant market power in case of a failure to comply with the obligations to which they are subject.

In case of a violation of Articles 4, 6 and 7 of Law No. 4054, the relevant undertaking may be imposed an administrative fine up to ten percent of its annual gross revenues. With the Draft Amendment, this rate has been increased twice, i.e., up to twenty percent of their annual gross revenues, in case that undertaking holding significant market power violates the obligations stipulated under Article 6/A. If the relevant provision enters into force, it can be expected to be very effective in practice and to result in very high administrative fines.

Moreover, in case the Board determines that undertakings holding significant market power violated Article 6/A at least two times within five years, it may prohibit the mergers or acquisitions by these undertakings for up to five years, in order to eliminate the damages arising from repeated violations or to prevent serious or irreparable damages that may arise.

The envisaged provisions under the Draft Amendment of the Law No. 4054 provide that the undertakings holding significant market power may be obliged to comply fully and actively with the obligations to which they are subject. Accordingly, they shall take all the necessary measures and report the relevant processes upon request of the Authority. The undertakings holding significant market power are deemed unconditionally responsible for complying with the obligations.

Proposed Amendment Regarding the Board’s On-Site Inspection Authority

Article 7 of the Draft Amendment is envisaged to add the expression “and, in cases where resolving requires special expertise or technical knowledge for the implementation of Article 6A, experts with special knowledge, skills or experience to be appointed by the Board if deemed necessary” to follow the expression of “experts employed at the disposal of the Board” in Article 15 of the Law No. 4054 titled on-site inspection.

In addition, it is regulated that undertakings offering at least one core platform service in Turkey, regardless of them being residing in Turkey or not, will be obliged to fulfil technical and administrative requirements that would enable to perform the powers set forth in this article.

One of the most important tools used by the Board in revealing competition violations is on-site inspection. However, the online nature of digital services allows platforms to offer services outside the country in which they are established. Therefore, if the platforms do not have an office in Turkey where the employees to be addressed during on-site inspection are employed and remote access to the servers abroad is provided, it will not be possible to conduct an on-site inspection.

With the Draft Amendment, undertakings offering at least one core platform service in Turkey are held responsible for fulfilling the technical and administrative requirements that will enable the use of this authority in order not to render the Board’s on-site inspection authority ineffective for undertakings that do not have headquarters in Turkey or do not have centralized technical and administrative equipment.

Another issue envisaged by the Draft Amendment is that similar to the DMA, if deemed necessary when implementing Article 6/A independent third parties with technical knowledge could be assigned by the Board to participate in the examination, in addition to the experts already working under the Board’s authority.

Conclusion

Currently, there is no draft regulation on the quantitative criteria to be taken into account for the determination of undertakings holding significant market power. The Draft Amendment sets out in detail the conducts that undertakings holding significant market power should refrain from while operating in the market and sets the fines to be imposed in case of non-compliance with these obligations considerably high. This confirms that the relevant undertakings operating in digital markets, which have been under the scrutiny of competition authorities for a long time, will be given a substantial responsibility.

Considering that many secondary legislations will be required, and the application processes of undertakings will start once the legislations entered into force, digital markets and the undertakings operating in these markets may be expected to be under the scrutiny of the Authority for a long period. In this context, the relevant undertakings should initiate their compliance processes with the new regulations as soon as possible by taking into consideration the framework outlined by the DMA.

Comparison with DMA

DMA	Draft Amendment	Notes
Article 3(1): An undertaking shall be designated as a gatekeeper if: (a) it has a significant impact on the internal market;   (b) it provides a core platform service which is an important gateway for business users to reach end users; and   (c) it enjoys an entrenched and durable position, in its operations, or it is foreseeable that it will enjoy such a position in the near future.	Undertaking that holds significant Market Power: Undertakings that have a certain scale in terms of one or more core platform services and operate in a way that has a significant impact on access to end users or on the activities of business users and which have the power or foreseen to be able to reach the power to maintain this impact in an established and permanent manner.	Although the details will be set by a communiqué, the Draft Amendment seems to be following a parallel approach with the DMA.
Article 3(2): An undertaking shall be presumed to satisfy the respective requirements in paragraph 1: (a) as regards paragraph 1, point (a), where it achieves an annual Union turnover equal to or above EUR 7,5 billion in each of the last three financial years, or where its average market capitalisation or its equivalent fair market value amounted to at least EUR 75 billion in the last financial year, and it provides the same core platform service in at least three Member States;   (b) as regards paragraph 1, point (b), where it provides a core platform service that in the last financial year has at least 45 million monthly active end users established or located in the Union and at least 10 000 yearly active business users established in the Union, identified and calculated in accordance with the methodology and indicators set out in the Annex;   (c) as regards paragraph 1, point (c), where the thresholds in point (b) of this paragraph were met in each of the last three financial years.	N/A Will be determined by the Communique on the Implementation of Article 8/A of the Law No. 4054	The Draft Amendment adopts the same criteria as Article 3(1) of the DMA; however, it does not include the financial criteria similar to Article 3(2) of the DMA. Rather it sets the Board to issue communiques addressing the relevant criteria.
Article 5(2): The gatekeeper shall not do any of the following: (a) process, for the purpose of providing online advertising services, personal data of end users using services of third parties that make use of core platform services of the gatekeeper;   (b) combine personal data from the relevant core platform service with personal data from any further core platform services or from any other services provided by the gatekeeper or with personal data from third-party services;   (c) cross-use personal data from the relevant core platform service in other services provided separately by the gatekeeper, including other core platform services, and vice versa; and   (d) sign in end users to other services of the gatekeeper in order to combine personal data, unless the end user has been presented with the specific choice and has given consent within the meaning of Article 4, point (11), and Article 7 of Regulation (EU) 2016/679. Where the consent given for the purposes of the first subparagraph has been refused or withdrawn by the end user, the gatekeeper shall not repeat its request for consent for the same purpose more than once within a period of one year. This paragraph is without prejudice to the possibility for the gatekeeper to rely on Article 6(1), points (c), (d) and (e) of Regulation (EU) 2016/679, where applicable.	6/A (g): In a way that prevents competitor undertakings from entering the market and prevents those already in the market from competing effectively; 1)           not combine the personal data they obtain from the core platform services with the personal data obtained from any other services they offer or with personal data obtained from third parties, shall not process these data by combining and shall not use them for / in the context of other services, especially in targeted advertising; unless it is necessary for the performance of a contract to which the end user is a party, 2)           not process the competitively sensitive data obtained from business users for purposes other than the fulfilment of the relevant service, unless it provides clear, precise, and sufficient options to the business user.	–               The DMA’s provision is drafted in a general way whereas Draft Amendment’s provision only applies if the conduct has anti-competitive effects (i.e., prevents competitor undertakings from entering the market and prevents those already in the market from competing effectively). –               The DMA only includes personal data however the Draft Amendment covers personal data as well as competitively sensitive data obtained from business users. –               Regarding data processing prohibition, the Draft Amendment stipulates a limitation (i.e., if necessary for the performance of a contract to which the end user is a party) on the other hand, the DMA presents consent as a general exception to all obligations under this paragraph. –               In addition, the Draft Amendment prohibits processing the competitively sensitive data unless it provides clear, precise, and sufficient options to the business user. –               In Article 5(2) para. (c) and (d) cross-use and sign-in end-users to combine data are regulated specifically unlike the Draft Amendment.
Article 5(3): The gatekeeper shall not prevent business users from offering the same products or services to end users through third-party online intermediation services or through their own direct online sales channel at prices or conditions that are different from those offered through the online intermediation services of the gatekeeper. Article 5(4): The gatekeeper shall allow business users, free of charge, to communicate and promote offers, including under different conditions, to end users acquired via its core platform service or through other channels, and to conclude contracts with those end users, regardless of whether, for that purpose, they use the core platform services of the gatekeeper.	6/A (f): Refrain from restricting or obstructing business users, to work with competitor undertakings to make offers to or make agreements with end users over platforms or other channels, to advertise their goods and services via these channels, and refrain from preventing them to offer different prices or conditions for a certain good or service while working with competitor undertakings or over their own channels or different channels.	–      Unlike the Draft Amendment, the DMA stipulates that undertakings will allow business users to make offers on different platforms as free of charge.
Article 5(5): The gatekeeper shall allow end users to access and use, through its core platform services, content, subscriptions, features or other items, by using the software application of a business user, including where those end users acquired such items from the relevant business user without using the core platform services of the gatekeeper.	No parallel provision.
Article 5(6): The gatekeeper shall not directly or indirectly prevent or restrict business users or end users from raising any issue of non-compliance with the relevant Union or national law by the gatekeeper with any relevant public authority, including national courts, related to any practice of the gatekeeper. This is without prejudice to the right of business users and gatekeepers to lay down in their agreements the terms of use of lawful complaints-handling mechanisms.	No parallel provision.
Article 5(7): The gatekeeper shall not require end users to use, or business users to use, to offer, or to interoperate with, an identification service, a web browser engine or a payment service, or technical services that support the provision of payment services, such as payment systems for in-app purchases, of that gatekeeper in the context of services provided by the business users using that gatekeeper’s core platform services.	6/A (c): Refrain from making the goods or services offered to business users and end users tied on other goods or services offered by themselves,	–      The DMA is drafted more generally whereas the Draft Amendment lists the services offered by gatekeeper that cannot be tied.
Article 5(8): The gatekeeper shall not require business users or end users to subscribe to, or register with, any further core platform services listed in the designation decision pursuant to Article 3(9) or which meet the thresholds in Article 3(2), point (b), as a condition for being able to use, access, sign up for or registering with any of that gatekeeper’s core platform services listed pursuant to that Article.	6/A (d): Refrain from requiring business users or end users to subscribe or register with other core platform services of this undertaking holding significant market power as a condition for accessing, logging in or registering any core platform service.
Article 5(9): The gatekeeper shall provide each advertiser to which it supplies online advertising services, or third parties authorised by advertisers, upon the advertiser’s request, with information on a daily basis free of charge, concerning each advertisement placed by the advertiser, regarding: (a) the price and fees paid by that advertiser, including any deductions and surcharges, for each of the relevant online advertising services provided by the gatekeeper,   (b) the remuneration received by the publisher, including any deductions and surcharges, subject to the publisher’s consent; and   (c) the metrics on which each of the prices, fees and remunerations are calculated. In the event that a publisher does not consent to the sharing of information regarding the remuneration received, as referred to in point (b) of the first subparagraph, the gatekeeper shall provide each advertiser free of charge with information concerning the daily average remuneration received by that publisher, including any deductions and surcharges, for the relevant advertisements. Article 5(10): The gatekeeper shall provide each publisher to which it supplies online advertising services, or third parties authorised by publishers, upon the publisher’s request, with free of charge information on a daily basis, concerning each advertisement displayed on the publisher’s inventory, regarding: (a) the remuneration received and the fees paid by that publisher, including any deductions and surcharges, for each of the relevant online advertising services provided by the gatekeeper;   (b) the price paid by the advertiser, including any deductions and surcharges, subject to the advertiser’s consent; and   (c) the metrics on which each of the prices and remunerations are calculated. In the event an advertiser does not consent to the sharing of information, the gatekeeper shall provide each publisher free of charge with information concerning the daily average price paid by that advertiser, including any deductions and surcharges, for the relevant advertisements. Article 6(8): The gatekeeper shall provide advertisers and publishers, as well as third parties authorised by advertisers and publishers, upon their request and free of charge, with access to the performance measuring tools of the gatekeeper and the data necessary for advertisers and publishers to carry out their own independent verification of the advertisements inventory, including aggregated and non-aggregated data. Such data shall be provided in a manner that enables advertisers and publishers to run their own verification and measurement tools to assess the performance of the core platform services provided for by the gatekeepers.	6/A (m): Provide free, continuous, and real-time complete information about the visibility and the usability of the advertisement portfolio including the pricing conditions regarding the offers, bidding process and essentials of price determination, and the price paid to the publisher for the relevant advertising services, and access to advertising verification and performance measurement tools and the data required for the use of these tools to the advertisers, publishers, advertising intermediaries which it provides online advertising service or to third parties that are authorized by those.	–      The DMA (by Article 5(9), together with 5(10) and 6(8)) takes a more segmented approach subject to the whom the information related to the advertising provided. In addition, abovementioned provisions also deal with the case when publisher/advertiser does not consent to the sharing of information in contrast to the Draft Amendment. –      The Draft Amendment includes information about bidding process unlike the DMA.
Article 6(2): The gatekeeper shall not use, in competition with business users, any data that is not publicly available that is generated or provided by those business users in the context of their use of the relevant core platform services or of the services provided together with, or in support of, the relevant core platform services, including data generated or provided by the customers of those business users. For the purposes of the first subparagraph, the data that is not publicly available shall include any aggregated and non-aggregated data generated by business users that can be inferred from, or collected through, the commercial activities of business users or their customers, including click, search, view and voice data, on the relevant core platform services or on services provided together with, or in support of, the relevant core platform services of the gatekeeper.	6/A (b): Refrain from using the data that are not publicly available while competing with other business users.	–      The DMA provides detailed information on the source of not publicly available data (i.e., generated or provided by business users) whereas the Draft Amendment does not do so since it provides the definition of data that is not publicly available under Article 3. –      The DMA in the second paragraph includes several examples of how the data can be collected while the definition of the Draft Amendment does not refer something similar.
Article 6(3): The gatekeeper shall allow and technically enable end users to easily un-install any software applications on the operating system of the gatekeeper, without prejudice to the possibility for that gatekeeper to restrict such un-installation in relation to software applications that are essential for the functioning of the operating system or of the device and which cannot technically be offered on a standalone basis by third parties. The gatekeeper shall allow and technically enable end users to easily change default settings on the operating system, virtual assistant and web browser of the gatekeeper that direct or steer end users to products or services provided by the gatekeeper. That includes prompting end users, at the moment of the end users’ first use of an online search engine, virtual assistant or web browser of the gatekeeper listed in the designation decision pursuant to Article 3(9), to choose, from a list of the main available service providers, the online search engine, virtual assistant or web browser to which the operating system of the gatekeeper directs or steers users by default, and the online search engine to which the virtual assistant and the web browser of the gatekeeper directs or steers users by default. Article 6(4): The gatekeeper shall allow and technically enable the installation and effective use of third-party software applications or software application stores using, or interoperating with, its operating system and allow those software applications or software application stores to be accessed by means other than the relevant core platform services of that gatekeeper. The gatekeeper shall, where applicable, not prevent the downloaded third-party software applications or software application stores from prompting end users to decide whether they want to set that downloaded software application or software application store as their default. The gatekeeper shall technically enable end users who decide to set that downloaded software application or software application store as their default to carry out that change easily. The gatekeeper shall not be prevented from taking, to the extent that they are strictly necessary and proportionate, measures to ensure that third-party software applications or software application stores do not endanger the integrity of the hardware or operating system provided by the gatekeeper, provided that such measures are duly justified by the gatekeeper. Furthermore, the gatekeeper shall not be prevented from applying, to the extent that they are strictly necessary and proportionate, measures and settings other than default settings, enabling end users to effectively protect security in relation to third-party software applications or software application stores, provided that such measures and settings other than default settings are duly justified by the gatekeeper.	6/A (e): Allow end users to easily uninstall software, applications or app stores that have been preinstalled into the operating system of the devices, to switch to different software, applications or app stores, to install and effectively use third-party software, applications or app stores, to allow default settings to be easily changed, to allow third-party software, applications or app stores to be offered to user choice and these to be made default, and fulfil technical requirements in these regards.	–      The DMA includes a much more detailed provisions in this area while the Draft Amendment looks to be leaving these to secondary legislation. –      The DMA leaves out the possibility to uninstall any software application that is essential for the functioning of the operating system. –      The DMA explicitly envisages the rights of providers to take strictly necessary and proportionate measures, to ensure that integrity and security of services provided by those are not endangered, unlike the Draft Amendment. –      With regard to changing default settings on operating system, the DMA requires that end-user should be provided with a list of the main available service providers.
Article 6(5): The gatekeeper shall not treat more favourably, in ranking and related indexing and crawling, services and products offered by the gatekeeper itself than similar services or products of a third party. The gatekeeper shall apply transparent, fair and non-discriminatory conditions to such ranking.	6/A (a): Refrain from discriminating their own goods and services in ranking, scanning, indexing or in other conditions, compared to the goods or services of business users and ensure that the relevant conditions are fair and transparent.
Article 6(6): The gatekeeper shall not restrict technically or otherwise the ability of end users to switch between, and subscribe to, different software applications and services that are accessed using the core platform services of the gatekeeper, including as regards the choice of Internet access services for end users.	No parallel provision.
Article 6(7): The gatekeeper shall allow providers of services and providers of hardware, free of charge, effective interoperability with, and access for the purposes of interoperability to, the same hardware and software features accessed or controlled via the operating system or virtual assistant listed in the designation decision pursuant to Article 3(9) as are available to services or hardware provided by the gatekeeper. Furthermore, the gatekeeper shall allow business users and alternative providers of services provided together with, or in support of, core platform services, free of charge, effective interoperability with, and access for the purposes of interoperability to, the same operating system, hardware or software features, regardless of whether those features are part of the operating system, as are available to, or used by, that gatekeeper when providing such services. The gatekeeper shall not be prevented from taking strictly necessary and proportionate measures to ensure that interoperability does not compromise the integrity of the operating system, virtual assistant, hardware or software features provided by the gatekeeper, provided that such measures are duly justified by the gatekeeper.	6/A (j): Enable the interoperability of core platforms services and/or ancillary services with other related products or services efficiently and free of charge and fulfil the technical requirements for this. 6/A (k): In order to maintain provision of core platform services or ancillary services by other undertakings, provide free of charge access to the necessary operating system, hardware or software features, limited to the relevant core platform service, and shall fulfil the technical requirements for this,	–      The DMA explicitly envisages the rights of gatekeepers to take strictly necessary and proportionate measures, to ensure that the integrity and security of services provided by gatekeepers are not endangered, unlike the Draft Amendment.
Article 6(9): The gatekeeper shall provide end users and third parties authorised by an end user, at their request and free of charge, with effective portability of data provided by the end user or generated through the activity of the end user in the context of the use of the relevant core platform service, including by providing, free of charge, tools to facilitate the effective exercise of such data portability, and including by the provision of continuous and real-time access to such data.	6/A (i): Enable end-users using core platform services or ancillary services, business users, or end-users of such business users to free of charge and effectively transfer their data provided by them or generated within the scope of activities of these parties on the relevant platform upon their request and provides free of charge tools to facilitate data portability. In this context, the transfer of data, including personal data of end users, by business users shall be carried out in accordance with Law No. 6698.	–      6/A (i) does not include third parties authorized to whom the data will be provided while the DMA does not cover business users.
Article 6(10): The gatekeeper shall provide business users and third parties authorised by a business user, at their request, free of charge, with effective, high-quality, continuous and real-time access to, and use of, aggregated and non-aggregated data, including personal data, that is provided for or generated in the context of the use of the relevant core platform services or services provided together with, or in support of, the relevant core platform services by those business users and the end users engaging with the products or services provided by those business users. With regard to personal data, the gatekeeper shall provide for such access to, and use of, personal data only where the data are directly connected with the use effectuated by the end users in respect of the products or services offered by the relevant business user through the relevant core platform service, and when the end users opt in to such sharing by giving their consent.	6/A (h): Provide relevant business users free of charge, efficient, continuous, and real-time access to the aggregated and non-aggregated data which is provided by business users while using core platform services or ancillary services, or by end users of these business users or is produced within the scope of the activities of these parties on the relevant platform, upon request of the relevant business users and third parties authorized by them. In this context, access to the personal data of end users shall be carried out in accordance with the Law on the Protection of Personal Data No. 6698 dated 24.3.2016.	The DMA determines the scope of the personal data that will be given access to the business user where the Draft Amendment includes all data without explicitly referring to personal data or its scope.
Article 6(11): The gatekeeper shall provide to any third-party undertaking providing online search engines, at its request, with access on fair, reasonable and non-discriminatory terms to ranking, query, click and view data in relation to free and paid search generated by end users on its online search engines. Any such query, click and view data that constitutes personal data shall be anonymised.	6/A (l): Upon their request, provide business users with adequate information on the scope, quality and performance of core platform services and ancillary services, as well as pricing principles and conditions of access to these services.	The following provisions of the DMA seems to be targeted by Article 6/A (l) of the Draft Amendment. The details on the scope of this Article 6/A (l) will be regulated by a communiqué set to be issued at most 6 months after the amendments enter into force.
Article 6(12): The gatekeeper shall apply fair, reasonable, and non-discriminatory general conditions of access for business users to its software application stores, online search engines and online social networking services listed in the designation decision pursuant to Article 3(9). For that purpose, the gatekeeper shall publish general conditions of access, including an alternative dispute settlement mechanism. The Commission shall assess whether the published general conditions of access comply with this paragraph.
Article 6(13): The gatekeeper shall not have general conditions for terminating the provision of a core platform service that are disproportionate. The gatekeeper shall ensure that the conditions of termination can be exercised without undue difficulty.
	6/A (n): Refrain from discriminating between business users by imposing unfair or unreasonable terms on business users.	The scope of this very general provision of the Draft Amendment is expected to be made certain with the communiqué.

Press Releases

Lear Competition Festival (LCF)

14th June 2023 ACTECON is proud to be a partner of the Lear Competition Festival (LCF) to be held in Rome between 26 and 29 September 2023.

New Rules on Agricultural Research and Development Support Programme

16th May 2023 It is possible to develop technology to provide sufficient and safe access to food for the rapidly increasing population with limited agricultural resources, only through Research and Development (“R&D”) and innovation activities.

The Turkish Competition Authority Has Concluded the Investigation Conducted against One of the Leading Household Appliances Companies with the Approval of the Proposed Commitments! (BSH)

16th May 2023 Introduction The TCA has been initiating one investigation after another into sectors that closely affect the lives of consumers in recent times.

The Turkish Competition Authority Publishes the Final Report on the Turkish FMCG Retailing Sector Inquiry

16th May 2023 The Fast-Moving Consumer Goods ("FMCG") retailing sector is one of the most important areas under the TCA’s focus due to its structure and key role in the economy.

The New Regulation Sets Out the Framework for the Authority and Social Network Providers – Interested Parties Should Scrutinise

16th May 2023 The Decision of the Information and Communication Technologies and Communication Board (“Board”) on Procedures and Principles Regarding Social Network Provider[1] (“Decision”) entered into force on 1 April.

Establishment of the Rebar Monitoring System: New Obligations for Rebar Producers, Importers and Taxpayers Operating in the Construction Sector?

16th May 2023

Introduction

On 16 March 2023, the Ministry of Treasury and Finance (Turkish Revenue Administration) published the General Communiqué on Application of Rebar Monitoring System.

State Aids – Does New Regulation Bring Precision?

16th May 2023 On 31 March 2023, a Presidential decision was announced in Official Gazette with respect to the enactment of the Regulation on the Procedures and Principles Regarding the Implementation, Coordination,

The Constitutional Court of Turkey Examined the Constitutionality of the Amendments Made in 2020 to Turkish Competition Law

16th May 2023 The Constitutional Court of Turkey (the “Court”) delivered a judgment on 9 November 2022[1] regarding the action for an annulment application made by the 137 members of the Grand National Assembly of Turkey against amendments introduced in 2020 to various articles of Law No. 4054 on the Protection of Competition (“Competition Law”).

The Turkish Competition Authority Takes a Wide Interpretation of the “Technology Undertaking” Exception Applicable to the Turkey’s Merger Control Thresholds

16th May 2023 The interpretation of the exemption brought for “technology undertakings” took a sudden turn with the Turkish Competition Authority’s (“TCA”) recent Berkshire Hathaway Decision (15.09.2022, 22-42/625-261) which resolved that the exception brought to the merger control thresholds by the recent amendment for the technology undertakings shall be considered applicable, even if the activities of the target undertaking that can be classified to fall under the definition of technology undertaking, are carried out in other geographical markets than Turkey.

The TCA Publishes Pioneer Decisions on the Simultaneous Implementation of the Leniency and Settlement Procedures

16th May 2023 Following the introduction of the settlement procedure, the number of undertakings applying for settlement has been increasing consistently. In this respect, the Turkish Competition Authority’s (“TCA”) evaluations regarding the implementation of the settlement procedure have become an object of curiosity as the investigations that ended with settlement decisions continue to be announced on the official website of the TCA.

Simultaneous Utilization of Both Commitment and Settlement Mechanisms

16th May 2023 The settlement and commitment procedures have been increasingly utilized within the decisions of the Turkish Competition Authority (“TCA”), but the adoption has been debated since 2014, when the mechanisms came to the agenda of the parliament but were refused after long discussions.

The Commitment Mechanism is not Open to Negative Matching Agreements

15th May 2023 The Turkish Competition Authority (“TCA”) launched a full-fledged investigation (“Investigation”) against Arabam Com İnternet ve Bilgi Hizmetleri A.Ş. (“Arabam.com”), Vava Cars Turkey Otomotiv A.Ş. (“VAVA CARS”), Araba Sepeti Otomotiv Bilişim Danışmanlık Hizmetleri Sanayi ve Ticaret A.Ş. (“KAVAK”), and Letgo Mobil İnternet Servisleri ve Ticaret A.Ş. (“Letgo”), which operate in the purchase and sales of second-hand passenger cars via their online platforms to determine whether these undertakings violated Article 4 of  Law No. 4054 on the Protection of Competition (“Competition Law”).

ACTECON is happy to announce promotion of two Seniors to Counsel positions and two Associates to Senior Associate positions

26th January 2023 ACTECON promotes Senior Associates Mr. Caner K. Cesit and Mr. Mustafa Ayna to Counsel, Mid-Level Associates Ms. Ozlem Basiboyuk Coskun and Mr. Alper Karafil to Senior Associate, and Ms. Cansen Erensoy to Mid-Level Associate position, effective as of January 2, 2023.

Legal Developments

A Landmark Decision by the Constitutional Court about On-site Inspections Conducted by the Turkish Competition Authority: A Judge’s Decision is Necessary for Conducting On-site Inspections

26th June 2023 The Constitutional Court published a significant decision (“Decision”) which includes critical assessments on whether the on-site inspections conducted by the Turkish Competition Authority (“TCA”) violate the inviolability of domicile protected under Article 21 of the Constitution of the Republic of Turkey (“Constitution”).

Turkish Competition Authority’s Vigilance on Digital Markets: Examining Recent Initiatives and Their Implications

14th June 2023 In line with the global trend, the Turkish Competition Authority (the “TCA”) has recently displayed a remarkable level of interest in addressing competition concerns on digital markets.

Investigation into the Small Household Appliances Sector Concluded with Settlement Procedure!

14th June 2023 The Turkish Competition Authority (“TCA”) initiated a full-fledged investigation (“Investigation”) against Korkmaz Mutfak Eşyaları San. ve Tic. A.Ş. (“Korkmaz”), Gençler Ev Araç ve Gereçleri Pazarlama Tic. A.Ş. (“Gençler”) and Punto Dayanıklı Tüketim Malları İth. İhr. Tic. Ltd. Şti. (“Punto").

Unveiling the Distinction: Turkish Competition Authority Clarified “Mergers” and “Acquisitions” under Turkish Merger Control Regime

14th June 2023 With its decision dated 17 March 2022 and numbered 22-13/205-88, the Turkish Competition Authority (“TCA”) cleared the transaction concerning the merger of Slim Fusina Rolling S.R.L. (“Slim Fusina”) and Niche Fusina Rolled Products S.R.L. (“NFRP”) (the “Transaction”) on the grounds the Transaction does not significantly impede effective competition.

The Turkish Competition Authority Fines Elon Musk due to Failure to Notify the Twitter Deal

28th March 2023 On 06.03.2023, the Turkish Competition Authority ("TCA”) announced its decision to fine Elon Musk due to failure to notify the $44 billion deal to acquire Twitter. The TCA’s reasoned decision is not available for the time being but English version of the TCA’s announcement in terms of the fining decision reads as following:

The TCA Publishes Pioneer Decisions on the Simultaneous Implementation of the Leniency and Settlement Procedures

21st February 2023 Following the introduction of the settlement procedure, the number of undertakings applying for settlement has been increasing consistently. In this respect, the Turkish Competition Authority’s (“TCA”) evaluations regarding the implementation of the settlement procedure have become an object of curiosity as the investigations that ended with settlement decisions continue to be announced on the official website of the TCA. Two reasoned decisions published on 17 January 2023, were indeed significant in this context as the administrative fines were reduced to a record-breaking extent (a total of 60% for Kınık Maden Suları A.Ş. (“Kınık”) and %55 for Beypazarı İçecek Pazarlama Ambalaj Turizm Petrol İnşaat Sanayi ve Ticaret A.Ş. (“Beypazarı”)) within the simultaneous implementation of the settlement and leniency procedures.

The Turkish Competition Authority Takes a Wide Interpretation of the “Technology Undertaking” Exception Applicable to the Turkey’s Merger Control Thresholds

21st February 2023 The interpretation of the exemption brought for “technology undertakings” took a sudden turn with the Turkish Competition Authority’s (“TCA”) recent Berkshire Hathaway Decision (15.09.2022, 22-42/625-261) which resolved that the exception brought to the merger control thresholds by the recent amendment for the technology undertakings shall be considered applicable, even if the activities of the target undertaking that can be classified to fall under the definition of technology undertaking, are carried out in other geographical markets than Turkey.

The Turkish Competition Authority Concluded Its Preliminary Investigation Regarding Car Rental Services Market

21st February 2023 On 31 January 2023, Turkish Competition Authority’s (“TCA”) decision dated 21 July 2022 and numbered 22-33/526-212 regarding a preliminary investigation into the car rental services market (the “Decision”) was published on the TCA’S official website. Back in 2020, the TCA started this preliminary investigation in order to determine whether the undertakings that are engaged in car rental activities violated Article 4 of Law No. 4054 on the Protection of Competition (“Competition Law”). Within this scope, the TCA conducted on-site inspections on the premises of twelve undertakings and took copies of more than a hundred findings. In the Decision, the TCA concluded that there was no evidence showing that undertakings operating in the car rental services market were party to an exchange of information which restricted competition, therefore, there was no need to launch a full-fledged investigation.

Badmouthing—Abuse under Turkish Competition Law?

8th February 2023 In recent years, competition authorities around the world have been scrutinising new types of behaviour that might be deemed abusive within the context of antitrust laws. Although those relating to digital markets receive the most attention, not a day passes by without a surprising decision announced by the authorities or competent courts. The decision of the Ankara 7^th Administrative Court of First Instance[1] (“CFI” or the “Court”) requiring the Turkish Competition Authority (“TCA”) to investigate allegations of denigration and deceptive practices can be considered one of them. In this blog post, we examine the TCA’s case law to illustrate its general approach towards such allegations in previous decisions. Before delving into the details of the mentioned case, it must be stressed that in line with the approaches adopted by several competition authorities in the EU, the TCA highlights in its decisions that denigration and deceptive practices by dominant companies actually can be a concern of competition law.

Where to Draw the Line of the Scope of Right to Access to Personal Data? The Constitutional Court Ruled on One’s Right to Access Their Own Personal Data

8th February 2023 On 20.12.2022, The Turkish Constitutional Court’s (“Constitutional Court”) decision concerning the right to an effective remedy in connection to the right to request protection of the data subject’s personal data within the scope of the right to respect for private life was published in the Official Gazette[1]. In its decision, the Constitutional Court established that the failure to examine the merits of an applicant’s lawsuit renders a theoretically available remedy ineffective. In other words, it was determined that a remedy which can be considered effective at the theoretical level loses its capacity to offer a chance of success due to the interpretation of the courts.

The Turkish Competition Authority’s M&A Overview Report for 2021 Has Been Published

27th January 2023 The Turkish Competition Authority’s (“TCA“) Mergers and Acquisitions Overview Report for 2021 (“Report”) has been published at the TCA’s official website on January 7, 2022. The Report provides an overview of the TCA’s activities regarding M&A transactions and includes brief information on the merger control filings by making comparisons between 2021 and previous years in different aspects such as the position of Turkish and foreign companies in the market and value and total number of the transactions notified to the TCA conducted in various sectors. Considering the value of Turkish-to-foreign transactions as well as foreign investments in the Turkish companies in 2021, it is seen that the foreign investors have been showing their interest to Turkish market again after a year of recession.

A Look at TCA’s Approach to Abuse of Dominance through the Lens of AG Rantos’s Opinion

27th January 2023 In recent weeks, highly praised opinion ("Opinion”) of the Advocate General Rantos, which was originally published in French, is released in English.[1] In this article, we summarized the opinion of the Advocate General in four short sections and, supplemented each section with the decisional practice of the Turkish Competition Authority (the “TCA”) as a comparison benchmark.

Main Developments in Competition Law and Policy 2021:Turkey

27th January 2023 2021 has been a busy year in many aspects, including competition law and policy in the Republic of Turkey. The Turkish Competition Authority ("TCA") developed and adopted its secondary legislation in response to amendments to Law No. 4054 on Protection of Competition ("Turkish Competition Law")[1]. These recent developments on the secondary legislation include (i) the introduction of the Regulation on the Settlement Procedure, the De Minimis Communiqué and the Communiqué on the Commitments, and (ii) amendment of the Block Exemption Communiqué on Vertical Agreements. The TCA also paid close attention to the fast-moving consumer goods market and digital markets.

Communiqué Concerning the Mergers and Acquisitions Calling for the Authorization of the Competition Board Has Been Amended

27th January 2023 On 04.03.2022, important amendments/additions has been introduced to the Communiqué Concerning the Mergers and Acquisitions Calling for the Authorization of the Competition Board (“Communiqué No. 2010/4”). With this article, it is aimed to summarize these latest amendments in the Communiqué No. 2010/4.

The First Settlement Decision in Turkey at A Glance: Philips et al. Case

27th January 2023 The implementation of the settlement mechanism by the Turkish Competition Authority (“TCA”) is becoming more and more common every day ever since the Regulation on the Settlement Procedure for Investigations on Anticompetitive Agreements, Concerted Practices, Decisions and Abuse of Dominant Position ("Settlement Regulation") entered into force on July 15, 2021.  It is evident that the TCA has sped up the implementation of the settlement mechanism and is looking forward to applying this mechanism effectively. 

Fintech in Turkey: Regulation & Competition Law Update

27th January 2023

A lot has changed in the outlook of fintech regulatory ecosystem since the last four months in Turkey. Starting from Central Bank’s Regulation on Payment Services and Electronic Money and Payment Service Providers; Turkish Competition Authority, with its game-changing Report on Financial Technologies in Payment Services, and Banking Regulation and Supervision Agency (“BRSA”), issuer of the Rules on the Operation of Digital Banks and Service Model Banking, have been vigorous for setting the rules of the game in fintech industry. Finally, the Finance Office of Turkish Presidency’s Fintech Ecosystem Status Report has revealed the upcoming National Fintech Strategy Paper’s fundamental aims, along with the good news on the establishment of Istanbul Finance and Technology Base. In this brief, we summarise the latest developments in Fintech industry from Turkey.

New Footprints in the Framework of SEPs and FRAND Terms

27th January 2023 The intersection between intellectual property and competition law is always on the agenda of lawmakers. Since there is an imbalance between the exclusivity rights ensured by intellectual property law and anti-competitive practices that the competition law protects, the notion of standard-essential patents (SEP) and a commitment to license these patents on a fair, reasonable and non-discriminatory (FRAND) basis are accepted to preserve the competitive landscape with regard to licensing issues. However, licensors and licensees still have discrepancies on the FRAND terms, and this keeps authorities and courts busy with handling each party’s requests. While it is nearly impossible to satisfy both parties’ demands, recently, we observed that there are footprints of significant regulatory initiatives that would likely shape the nexus between intellectual property and competition law. Indeed, the most influential jurisdictions, the European Union (EU) and the United Kingdom (UK) have launched fresh inquiries concerning the framework of SEP and FRAND. Below we discuss these developments and then elaborate on the Turkish stance related to the matter.

The TCA’s Stance on No-poaching Agreements: A Comparative Analysis

27th January 2023 The labor market has gradually increased its place on the agenda of competition law, especially in the last ten years. No-poaching agreements (agreements between competitors to not transfer employees from each other) come first among the elements that constitute the subject of competition law in the labor market. Like the other competition authorities, the Turkish Competition Authority (“TCA”) has also examined no-poaching agreements in various decisions.

Attorney-Client Privilege from Competition Law Perspective: Comparison Between Turkish and French Legal Systems

27th January 2023 The attorney-client privilege is a common law concept of legal professional privilege in the United States. The concept also exists in civil law countries where there is a secrecy obligation on the part of professionals in guaranteeing that clients’ confidential information is kept secret from disclosure to third parties. The civil law concept of attorney-client privilege is generally regulated under special laws such as legal practitioner acts or through national criminal law. Even if the principle of attorney-client privilege generally has a significant place in all legal systems it creates an ambiguous area within the scope of competition law depending on the country. However, neither Turkey nor France has specific dispositions under their national laws which are Law No. 4054 on the Protection of Competition (“Competition Law”), the French Civil Code (“FCiC”), and the French Commercial Code (“FCoC”). However, for Turkey, the Turkish Competition Authority (“TCA”) sets specific conditions related to this matter, whereas, in France, the French Competition Authority (“FCA”) is still ambiguous on the subject.

The Court’s Fact Check: The First-Degree Court Quashes in Part and Affirms in Part the Comprehensive Interim Measures Decision Brought by the Turkish Competition Authority Against Trendyol

27th January 2023 Until recent times, an interim measure decision of the Turkish Competition Authority (“TCA”) was something hard to come by. However, with the growing prominence of digital markets and the equally strong response from the competition authorities, that situation has changed as well. The latest experience shows that the TCA is more determined to actively use this tool in an attempt to efficiently respond to conducts in these fast-evolving markets.

Administrative Court Decided to Stay the Execution of Turkish Competition Authority’s Decision of Administrative Monetary Fine for Hindrance of On-site Inspection (Sahibinden.com)

27th January 2023 As is well known, the Turkish Competition Authority (“TCA”) is authorized to examine all data and documents on electronic platforms and information systems during the on-site inspections pursuant to the amendment dated 16.06.2020 on Article 15 of Law No. 4054 on the Protection of Competition (“Competition Law”). Subsequently, the TCA published the Guidelines on the Examination of Digital Data during On-Site Inspections on 09.10.2020.

Automotive Companies are Cleared of the Allegations of Stockpiling and Competitively Sensitive Information Exchange!

27th January 2023 The automotive sector has been on the radar of the Turkish Competition Authority (“TCA”) for a long time. In this sense, the TCA conducted an investigation (“Investigation”) regarding the allegations that some undertakings operating in the first-hand and second-hand automotive markets violated Law. No. 4054 on the Protection of Competition (“Competition Law”) via stockpiling and increasing the vehicle prices together.

Lack of Evidence is not Evidence: TCA’s Differing Approach to Standard of Proof for Hinderance of On-Site Inspections

27th January 2023 In accordance with the Turkish Competition Authority’s (“TCA”) decision dated 25.11.2021 and numbered 21-57/796-M, the TCA initiated an investigation against undertakings in the market for fast-moving consumer goods to ascertain whether Article 4 of Law No. 4054 on the Protection of Competition (“Competition Law”) has been violated. Within this scope, the TCA conducted an on-site inspection on 08.12.2021 at the premises of Yeni Mağazacılık A.Ş. (“A101”).

Of SIEC-Test and Thresholds: Merger Control 2022 in Turkey

27th January 2023 The substantial rules of the Turkish merger control are taken from the corresponding EU provisions. The amendments to the Turkish Competition Law in 2020 introduced the SIEC test to improve the concentration control regime and harmonize it with the EU rules even further. The amended Merger Communique in 2022 revised the thresholds as a response to the national currency devaluation and rapid developments in technology/digital markets, intending to prevent killer acquisitions, as well as decreasing the Turkish Competition Authority’s (TCA) caseload. In this short article, we would like to provide you with the important aspects of merger control in Turkey, including the main changes that came into effect following the reform of the Turkish Competition Law in June 2020.

Turkish Competition Authority Terminated its Investigation Against Leading e-Scooter Rental Firm with Commitments

26th January 2023 New markets are under the intense scrutiny of the Turkish Competition Authority (“TCA”) due to new competitive concerns arising from the disruption that has emerged with the technological changes in the markets. Recently, the TCA has shifted its focus to emerging markets while monitoring the traditional markets constantly. In this framework, in July, the TCA initiated a full-fledged investigation against Martı İleri Teknoloji A.Ş. (“Martı”), the leading e-scooter rental firm, which is offering micromobility/microtransit service. Approximately one and half months later, in September, the TCA announced that the investigation against Martı is terminated with commitments.

A New Age for Digital Markets in Turkey? The Draft Amendment to the Law No. 4054 on the Protection of Competition

26th January 2023 This blogpost will give an overview on the draft amendment (the “Draft Amendment”) to the Law No. 4054 on the Protection of Competition (the “Law No. 4054”). The key points of the Draft Amendment concern:

Türk Telekom Decision: Recent Approach to Refusal to Deal

26th January 2023 The Turkish Competition Board (the “Board”) published its reasoned decision dated 30.09.2021 and numbered 21-46/667-332 (the “Decision”) concerning the full-fledged investigation launched against Türk Telekomünikasyon A.Ş. (“TT”) upon the complaints of undertakings operating in the retail fixed broadband internet access services market (downstream market). In their complaints, internet service providers (“ISPs”) alleged that TT rejected the requests for the provision of service that is necessary for them to provide access to their subscribers on unreasonable or unjustified grounds (no available ports or insufficient technical infrastructure), TT directed the subscribers to its subsidiary TTNET A.Ş. (“TTNet”), its conducts resulted in the exclusion of ISPs from the market, thus, constituted discrimination in favor of TT. Therefore, it was claimed that TT abused its dominant position in the wholesale fixed broadband internet access services market (upstream market) through its subsidiary TTNet in the downstream market.

Dawn raids in Turkey – Can Companies Avoid Responsibility by Asserting Subjective Grounds for the Deleted Data During On-site Inspections?

26th January 2023 The Turkish Competition Authority (TCA) has rendered a number of decisions, particularly in recent years, on whether on-site inspections have been hindered or complicated. These include two recent decisions on D-Market Elektronik Hizmetler ve Ticaret A.Ş. ("Hepsiburada"), one of the largest e-marketplaces in Turkey.

Turkey – What to Consider in Sharing Sectoral Reports with Sector Members?

26th January 2023 The Turkish Competition Authority (“TCA”) has rendered several decisions in recent years concerning the exchange of competitively sensitive information . A significant number of these decisions have involved negative clearance/exemption applications made to the TCA by undertakings seeking to lawfully exchange information among themselves.

The Turkish Competition Authority Sets the Boundaries of its “Technology Undertaking” Definition

26th January 2023 On 4 March 2022, the Turkish Competition Authority (the “TCA”) increased the notification thresholds set in its merger regulation, i.e., Communiqué No. 2010/4 on the Mergers and Acquisitions Calling for the Authorisation of the Competition Board (“Communiqué No. 2010/4”). In addition to the amendment of turnover thresholds, the TCA added an exception to these thresholds for transactions involving acquisitions of what it defines as “technology undertakings.”

The Information You Have Requested Cannot Be Reached at the Moment: The Regional Administrative Court Upheld the Board’s Decision Imposing Fines on Five International Banks for Not Providing the Requested Information

26th January 2023 On 26 October 2022, the Ankara Regional Administrative Court’s 8^th Administrative Chamber revoked[1] an earlier decision[2] of the Ankara 3^rd Administrative Court that had annulled the Turkish Competition Board’s (the “Board”) decision concerning the imposition of administrative monetary fines on five international banks for failure to provide the requested information/data.[3]

TCA Imposed Interim Measures on Krea

26th January 2023 As per Article 9(4) of Law No. 4054 on Protection of Competition (“Competition Law”), the Turkish Competition Authority (“TCA”) is entitled to impose interim measures in order to maintain the environment before the violation, without exceeding the scope of the final decision, in case of a possibility of serious and irreparable damages. It is observed that the TCA imposed interim measures for certain cases where it deems necessary in recent years.

The Ankara 13th Administrative Court Rules for the Annulment of Turkish Competition Authority’s Cartel Decision Due to Failure of Standard of Proof (Kronospan)

26th January 2023 The Ankara 13^th Administrative Court ("Court")[1] recently annulled with its decision (“Court Decision”) the Turkish Competition Authority's ("TCA") cartel determination[2] (“TCA Decision”) against Kronospan Orman Ürünleri San. ve Tic. A.Ş. (“Kronospan”) in a decision through which it had imposed on 11 undertakings active in the MDF and flakeboard markets an administrative monetary fine for violating Article 4 of Law No. 4054 on the Protection of Competition ("Competition Law").

Adidas Cleared of Allegations Regarding Resale Price Maintenance and Discrimination

26th January 2023 The Turkish Competition Authority (“TCA”) has launched numerous investigations into whether undertakings maintain their dealers' resale prices. These investigations include one launched into one of the most well-known sports product brands, Adidas Spor Malzemeleri Satış ve Pazarlama Anonim Şirketi (“Adidas”).

First Decision by the TCA to Impose Fine to the Labour Market!

26th January 2023 The Turkish Competition Authority (“TCA”) has published its reasoned decision dated 24.02.2022 and numbered 22-10/152-62 (“Private Hospitals Decision” or “Decision”) in which it examined the allegations that private health institutions and an association of undertaking (i) jointly determined the operating room service fees charged to freelance physicians, (ii) restricted competition by preventing employee transfers and jointly determining the salary scales of employees, and (iii) exchanged competitively sensitive information. Within the scope of the Decision, the activities of the relevant undertakings operating in Turkey’s two provinces, Samsun and Bursa, were examined separately.

Be Warned! TCA Fines Türkiye’s Leading Electric Scooter Rental Company For False and Misleading Information (MARTI)

26th January 2023 On 5.12.2022, The Turkish Competition Authority (“TCA”) published its decision imposing a monetary fine on Martı İleri Teknoloji A.Ş. (“Martı”), a leading electric scooter rental company in Türkiye, for providing false and misleading information[1]. The reasoned decision of the TCA indicated that the Authority had communicated with Martı via email after receiving the official answers to its initial request for information with the aim to clarify any confusions that Martı might have had regarding the requested items and decided to impose a fine only after the second round of answers, which were still false and misleading, according to the TCA.

New Regulation on Waste Electrical and Electronic Equipment Was Adopted

26th January 2023 The Regulation on the Control of Waste Electrical and Electronic Equipment (“CWEEE Regulation”) was revoked on Monday through the adoption of the new Regulation on the Management of Waste Electrical and Electronic Equipment (“MWEEE Regulation”) published in the Official Gazette, numbered 32055. Prepared as part of the harmonization process with the European Union (“EU”) legislation[1], MWEEE Regulation will enter into force on 1 February 2023. The renewed regulation brings significant new rules to the sector including the establishment of the EEE Information System and the obligation to register for EEE manufacturers, the disappearance of the concept of “authorized institution”, extraterritoriality clauses regarding the definition of ‘producer’ etc. Accordingly, we aim to provide a brief account of the important changes brought by the MWEEE Regulation in this short article.

ANTI-DUMPING MEASURES WHICH ARE TO EXPIRE IN 2023 AND WHAT KIND OF CONNOTATIONS THIS MIGHT HAVE ON INTERESTED PARTIES

26th January 2023 When we review the Turkish Ministry of Trade’s official website and considering the latest global developments regarding the international trade, we believe that 2023 is going to be a busy year. In this regard, it is of utmost interest to parties which have stakes in this area to closely monitor and anticipate which investigations may be initiated, so as to either apply for an expiry review or to prepare for them. This becomes especially significant when the amount of scrutiny and work these investigations require the interested parties to dedicate.

The Turkish Competition Authority Published Mergers and Acquisitions Overview Report for 2022

26th January 2023 The Turkish Competition Authority (“TCA”) has published its Mergers and Acquisitions Overview Report for 2022 (“Report”) on January 6, 2023. For ease of reading, we will refer to M&As as mergers.

CONTINUTION OF ANTI-DUMPING MEASURES CONCERNING THE BABY CARRIAGES AND PARTS OF BABY CARRIAGES

26th January 2023 Despite the huge workload and new appointments in 2022, the trade remedies continue to be one of the key tools used by the Turkish Ministry of Trade (“Ministry”) in ensuring the fair international trade practices and shaping the free trade rules to restore the competitive balance. Recently, the Ministry concluded an expiry review investigation concerning the imports of “baby carriages, parts of baby carriages (chassis only)”[1] originating in China.[2] This case is noteworthy because the measures are applicable for almost two decades and the Ministry established no dumping margin but still determined that the expiry of the measures would be likely to result in a continuation or recurrence of dumping.

Two Edges of Europe Cross Lines: The CMA Fines BMW AG for Failing to Comply with an Information Request

26th January 2023 The Competition and Markets Authority (“CMA”) of the UK has fined Germany-based Bayerische Motoren Werke Aktiengesellschaft (“BMW AG”), the ultimate parent company of the BMW Group, for failure to comply fully with a written information request without reasonable excuse through its decision of 6 December 2022 (“CMA Decision”). The fine includes a fixed amount of GBP 30,000 plus a daily amount of GBP 15,000, which will continue to accumulate until BMW AG complies with the information request.

Private Schools’ Practices Are Under the Scrutiny of Turkish Competition Authority

26th January 2023 On 12 January 2023, the Turkish Competition Authority (“TCA”) announced the initiation of two full-fledged investigations concerning the practices of certain private schools. Those investigations reveal that the TCA has been closely monitoring the news on the private schools’ pricing policies which have had wide coverage on the press recently and been on the agenda of the Ministry of Education (“MEB”)^[1]. This piece briefly explains the new investigations as well as the previous investigations of the TCA against the private schools.

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Investigation against the Private French Schools

Upon the preliminary investigation conducted by the TCA, it has been concluded that the pricing practices of Saint-Joseph French High School, Saint Benoît French High School, Notre-Dame de Sion French High School, Saint-Michel French High School and Sainte Pulchérie French High School (“Private French High Schools”) should be further examined in terms of Article 4 of the Law No. 4054 on Protection of Competition (“Competition Law”) (a provision which is similar to Article 101 of the TFEU – i.e. prohibiting the anti-competitive agreements)^[2]. The Private French High Schools’ pricing policies were under the scrutiny of the TCA in two occasions previously through a preliminary investigation^[3] and an individual exemption application^[4]. In 2013, a preliminary investigation was initiated against the Private French High Schools to determine whether these schools (i) determined the school fees through anticompetitive agreements, concerted practices, or decisions of undertakings and (ii) entered into a gentleman’s agreement to prevent students’ transfers among themselves. Regarding the allegation of price fixing, the Private French High Schools disclosed that they met regularly to discuss and agree on various matters such as the prices, pedagogic needs, educational schedules and cultural activities, and decided the school fees jointly. The TCA stressed that the lists for the annual school fees reported to the MEB also supported those statements. The TCA then moved on to assess whether the price fixing by these schools resulted in any anticompetitive object or effect. The TCA first emphasized that the competition in the private education was primarily focused on the quality of the education instead of the price parameter and the fees obtained by private schools were used in order to enhance their quality of education. Furthermore, the TCA also evaluated that the main underlying motivation was to ensure higher quality and service conditions for the students and to avoid from the price parameter becoming a distinguishing factor that would prevent the formation of a joint educational vision. Hence, the TCA concluded that despite its potential to create adverse effect from the competition perspective, the relevant price fixing was not to prevent the competition but to maintain the quality of services. Apart from those, the TCA highlighted that the supply and demand structure in the relevant market primarily based on the factors other than the price competition and there were lots of alternative private schools for consumers. Therefore, the TCA resolved that the determination of fees at a monopolistic rate through an agreement among the schools was not possible in practice as well. Eventually, the TCA decided that (i) the price fixing by the investigated private schools did not have the object or result of preventing the competition, (ii) such prevention was not possible as per the structure of the relevant market, (iii) such practices were aimed to prevail service quality parameter over price regarding the students’ choices.  That said, by noting that if the conduct of a common determination of prices becomes more widespread this may lead to the restriction of competition in the relevant market, the TCA decided to send an opinion letter to the parties with the warning to refrain from any activities that lead to or may lead to anticompetitive results. Regarding the allegation of a gentleman’s agreement, the TCA also reviewed the student acceptance criteria of these schools; based on both the documents obtained through inspections, interviews with school officials and relevant regulations. Accordingly, the TCA concluded that student acceptances and transfers were solely based on the relevant regulations and thus there was no gentleman’s agreement completed between these schools. In 2015, one of the Private French High Schools applied to the TCA for an individual exemption assessment regarding the price fixing practices. In its review, the TCA mainly referred to the 2013 Decision and explained that (i) cooperation agreements/practices towards price determination are considered as per se violation, which precludes them from block or individual exemption assessment, (ii) thus the negative results from such agreements cannot be compensated by efficiency gains and therefore, (iii) there was no need to conduct a detailed assessment on whether the notified scheme fulfils the criteria for an individual exemption. Additionally, the TCA emphasized that there was no need to launch a full-fledged investigation, but it decided to send a warning letter again.

Investigation against the Private Schools in Ankara

In a simultaneous investigation announcement, the TCA provided very brief information about the initiation of another investigation, this time against eight private schools in Ankara, the capital city.^[5] According to the TCA’s statement, the investigation regarding the private schools in Ankara also focuses on the determination of whether there is a violation of Article 4 of the Competition Law, but no further details on the types of the investigated practices were disclosed. The practices of certain private schools and an association of private schools were again under the scrutiny of the TCA before in 2011. At the time, the TCA had initiated a preliminary investigation against those to determine whether these schools engaged in price fixing and jointly determination of the personnel policies through Private Schools Union Association and Ankara Private Schools Association (e.g., wage fixing and no-transfer agreements).^[6] After summarising the findings collected during the preliminary investigation through media publications and on-the-spot inspections, the TCA provided an overview of the increase trends in private school fees in the last five years. In this respect, prior to its assessments on the merits, the TCA first noted that (i) the price increase rates were generally different from each other and (ii) the majority of these schools increased their prices above the average annual CPI changes, while some of the price increases were below this rate. During the preliminary investigations, the TCA obtained agenda notes which referred to meetings held between certain private schools concerning the joint determination of school fees, scholarships, payment due dates and salaries of employees for the year 2001-2002. While emphasising that such meetings could be considered as anticompetitive within the scope of Article 4 of the Competition Law, the TCA evaluated that it was not possible to take any action based on the documents obtained since the statute of limitations had lapsed. The TCA also found information and documents relating to fee discussions during meetings within Private Schools Union Association (“PSUA”) and Ankara Private Schools Association. Furthermore, certain officers were interviewed during the investigation and they stated that (i) matters relating to fees were discussed during association meetings, (ii) generally no written decisions were issued but matters were discussed verbally. Lastly, the TCA found that associations were ‘recommending’ price increases to its members, including for example, raising the prices to a certain level above the CPI. In that context, after a brief reference to the relevant statements from the documents obtained during the preliminary investigation period (e.g., certain e-mails and media reports), it was noted that the Association conveyed its fee related recommendations and common understanding reached during the meetings in a non-binding advisory decision. Accordingly, following a brief explanation of the concept of concerted practices in Turkish and EU law, the TCA concluded that although these advisory decisions are not binding, they are violations by object and therefore should be evaluated within the scope of Article 4 of the Competition Law. A third category of documents obtained by the TCA related to “Principles of Private Schools” (“PPS”) prepared by the PSUA, which governed acceptance of students as well as employment conditions for teachers. The TCA established that the rules incorporated in the PPS were anticompetitive as they contained restrictions on the (i) employment and transfer of teachers between competing private schools and (ii) fees and scholarships offered to students. In that context, the TCA concluded that the PPS aimed to weaken the bargaining power of consumers and limit their preferences by allowing private schools to act in concert, and made it difficult for teachers working at private schools to transfer to other schools. The TCA then moved on to assess whether an individual exemption could be granted to the rules included in the PPS, under the Article 5 of the Competition Law. In that regard, the TCA emphasised that the mere object of developing the dialogue and goodwill amongst competing undertakings without any benefits for consumers could not be protected under competition law. Conversely, the TCA stated, the rules under PPS did not result in any significant benefits for the consumers and caused damages to consumers as well as teachers working in these schools. Accordingly, the TCA concluded that the principles could not benefit from an individual exemption within the scope of Article 5 of the Competition Law as they limited competition among private schools. Ultimately, the TCA decided that there was no need to launch a full-fledged investigation and sent a warning letter to private schools, Ankara and Istanbul Provincial Directorates of National Education and the PSUA.

Conclusion

The initiation of the two full-fledged investigations concerning the practices of certain private schools represents a markedly different approach by the TCA, compared to its previous decisions. As explained above, the practices of private schools were under TCA’s scrutiny previously, particularly between the years 2011 to 2015. However, the mentioned preliminary investigations had not led the TCA to initiate a full-fledged investigation regarding the practices of private schools. Following the announcement of the full-fledged investigations, it remains to be seen whether the TCA is set to change its previous approach.

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[1] See the recent amendment to Regulation on Private Educational Institutions by MEB, published on the Official Gazette, dated 06 January 2023 and numbered 32065. The amended rules revise the maximum increase rate that private schools can apply to their respective fees. Accordingly, the MEB will determine a maximum increase rate, by taking the annual consumer price index (“CPI”) into account. The repealed rule had established that the increase rates shall be determined at maximum 5% over the PPI+CPI/2 of the previous year. (https://www.resmigazete.gov.tr/eskiler/2023/01/20230106-4.htm). [2] See the TCA’s announcement: https://www.rekabet.gov.tr/tr/Guncel/ozel-saint-joseph-fransiz-lisesi-ozel-sa-6856462c4192ed11a2110050568520f2 [3] Decision dated 19.12.2013 and numbered 13-71/960-407 (“2013 Decision”): https://www.rekabet.gov.tr/Karar?kararId=dfce5cfc-3318-435c-8fae-555ba3acc052 [4] Decision dated 07.07.2015 and numbered 15-28/328-103 (“2015 Decision”): https://www.rekabet.gov.tr/Karar?kararId=f86a1b00-512a-43cd-bbbb-b3a36bc6a606 [5] See the TCA’s announcement: https://www.rekabet.gov.tr/tr/Guncel/ankara-merkezli-olarak-faaliyet-gosteren-c985ce9f4192ed11a2110050568520f2 [6] Decision dated 03.03.2011 and numbered 11-12/226-76 (“2011 Decision”): https://www.rekabet.gov.tr/Karar?kararId=7557b1b6-700b-4ffc-858b-bc832991cadd

Trendyol Avoids a Full-Fledged Investigation by the Turkish Competition Authority and Gets Block Exemption

26th January 2023 On 17 January 2023, the Turkish Competition Authority (“TCA”) announced its reasoned decision rendered as a result of the preliminary investigation that was conducted against DSM Grup Danışmanlık İletişim ve Satış Ticaret AŞ (“Trendyol”).[1] The preliminary investigation was initiated pursuant to a confidential complaint which alleged that Trendyol violated Articles 4 and 6 of Law No. 4054 on Protection of Competition (“Competition Law”) in the market for online food and supermarket order. This piece briefly explains the (i) dominance and abuse of dominance, (ii) block exemption and (iii) full-fledged investigation related assessments of the TCA in its reasoned decision.

Legal Briefings

• Q&A with Dr. Fevzi Toksoy and Bahadir Balki

  What do you think about the ‘technology undertaking’ exception to Turkey’s merger control regime? With the adoption of this exception, the TCA exempts certain transactions involving a takeover of a technology undertaking from the target-wise turnover thresholds. Competition authorities worldwide have long been discussing about tackling the so-called ‘killer acquisitions’. While the German and Austrian …

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Comparative Guides

• Turkey: International Trade

  Published: December 2023

  Authors: M. Fevzi ToksoyBahadır BalkıErtuğrul Can Canbolat

  This country-specific Q&A provides an overview of International Trade laws and regulations applicable in Turkey.