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Legal Alerts

11/05/2020

Competition Authority Eyes Digital Economy

Legal Alerts
Competition
General

New Developments

The Competition Board (“Board“) published its decision of May 7, 2020 and numbered 20-23/307 on its website regarding the assignation of new duties to an authority to monitor and set competition policies for the digital economy, multilateral platforms, algorithms and big data. The following activities are assigned to the Strategy Development Department of the Turkish Competition Authority (“Authority“) so that, according to the announcement, the Authority can proactively act in these fields:

  • Contribute to the mergers/acquisitions, sector inquiries, investigations and preliminary investigations on the digital economy carried out by the Supervision and Enforcement Departments.
  • Counsel the Board on investigations regarding the digital economy when necessary.
  • Providing professional staff to the Supervision and Enforcement Departments to contribute to the competition reviews on the digital economy when necessary.
  • Engage in training and informing professional staff about digital economy issues.
  • Share knowledge and experience with international organizations and other competition authorities, considering the effects of the digital economy and multilateral platforms across national borders.
  • Conduct training activities at the local and international levels to ensure the detection of and enforcement against market-specific problems occurring in this field.
  • Raise awareness about the effects of the digital economy and algorithms on markets and consumers, and contribute to the policy making by communicating with the relevant ministries, institutions and organizations.

In its announcement, the Board added that it is difficult to ascertain the impact area and the infringement of big data and algorithm based competition violations, and that conventional practices and approaches fail to overcome the enforcement challenges in this area.

What Do These Developments Mean?

In parallel with the significant global developments in digital economy, many competition authorities have been carrying out studies to identify the optimum level of enforcement and to monitor the effects of multilateral platforms, algorithms and big data both on the market and the consumer. The U.S. and the EU authorities, particularly the Competition and Markets Authority of the UK, have focused their work on digital markets or created a separate task force.

The Authority launched the Digitalization and Competition Policy initiative to determine the fundamental policies of the digital economy at the beginning of 2020, and its current decision to expand its duties signals that the Authority will conduct the competition law practice in parallel with global developments on the digitalization trend. In particular, it appears that the Authority may eventually re-calibrate its enforcement practice to the underlying technology, since the Authority’s announcement highlights the shortcomings of conventional methods to review big data and algorithm based infringements. It is clear that the Authority will maintain its active stance on digital markets considering the Board’s recent multilateral platform and online markets decisions (i.e. Google Shopping (07.11.2019; 19-38/575-243) and Google Android (19.09.2018; 18-33/555-273)) and its increased activity on digital markets issues since the beginning of 2020.

Conclusion

The Authority closely monitors developments and carries out studies on the impacts of the digital economy at global and local levels. The Authority’s announcement indicates that the impact and enforcement of innovative technologies such as platforms, algorithms and big data will be further scrutinized. Accordingly, the Strategy Development Department will likely play a significant role in shaping the competition policy for digital markets.

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