As the role of internet technologies in the economy grows, business structures change ̶ and lawmakers and authorities are well-aware of the need to the adapt to the ongoing digitization of the economy. On May 7, 2021, the Turkish Competition Authority (“Authority“) published its preliminary report on its e-marketplace sector inquiry (“Report“). The sector inquiry was initiated on June 11, 2020, with the Turkish Competition Board’s (“Board“) decision numbered 20-28/353-M, in order to understand the dynamics of the e-commerce sector and to determine potential competition law concerns along with the search for possible solutions as policy changes and regulations.
What Do the Developments Mean?
This is not the first time that the Authority has demonstrated its increasing awareness of the digital markets, and of digitalization itself. In this regard, 2020 was a busy year for the Board. The Digital Data Review Guidelines for Dawn Raids were introduced on October 8, 2020, clarifying matters regarding digital inspections on servers, computers, mobile devices, clouds, and the use of the forensic software. While undertakings such as Google, Facebook, Booking, Yemeksepeti, Sahibinden and Nadirkitap have already undergone investigations, the Digitalization and Competition Policy Report, announced on January 2020 is still being studied. A digital workforce is also established by the Board. It is safe to say that the Authority pays great attention to the digital economy, and the e-commerce sector inquiry is part of this long-term goal.
The inquiry is seen as a part of the Authority’s aim to be in line with the global developments, starting with the EU, along with its aim to establish an understanding of the sector needs of the Turkish market. Thus, it included different parties’ opinions, collected data from online marketplace platforms, third party sellers, service providers and consumers, and provided examples from institutions such as the EU Commission and the OECD, with references to former decisions given by authorities in a worldwide scope. Notably, the Authority clearly underlined the importance of the relationship between personal data and its practical applications, use cases, and the potential concerns in a competitive environment.
The Report is open to public comments until July 9, 2021, and stakeholders are encouraged to submit their views to the Authority.
Findings of the report
A brief summary of the findings and recommendations in the Report are presented below:
The Authority is expected to finalize its preliminary report and proceed to its studies on the preparation of the legislative and regulatory plans, which are briefly provided in the Report with three main steps:
1. Updating the secondary competition law legislation
The Authority considers that the competition law principles should be implemented strictly and conservatively on the e-marketplace platforms market. The Authority believes that the secondary legislation should address issues such as assessment of MFN or exclusivity clauses by online platforms, and existing legislation should be both further clarified and strengthened. In particular, the Authority hints that lower market share thresholds for exemption may be warranted in the case of online platforms.
The Authority also aims to address potential exploitative abusive behaviors by platforms under Article 6 of the Law No 4054 on Protection of Competition. Therefore, it is recommended that secondary legislation also address and clarify potential exploitative abuses, such as excessive collection of consumer data and imposition of unfair commercial terms.
2. Establishing a “Platform Code of Conduct”
The Authority aims to prevent the alleged asymmetrical bargaining power of platforms from causing a skewed commercial environment in which costs and benefits are unfairly allocated. Thus, the Authority states that a “Platform Code of Conduct” to maintain a transparent, open, accessible and foreseeable ecosystem should be established as a reference point.
This code of conduct would target behaviors such as: (i) abusive contractual changes imposed on third-party sellers; (ii) lack of clarity in terms and conditions; and (iii) access to data.
3. Ex-ante gatekeeper regulation
The Authority notes that a separate inquiry regarding digital markets is also underway and aims to promulgate legislation regarding the determination of “gatekeeper” undertakings and the conducts that they must avoid. This sector inquiry also encompasses online marketplace platforms under the “online intermediary services market.”
In relation to this, the Authority lists a number of prohibitions that it believes should be imposed on gatekeeper online marketplace platforms, including: (i) imposing wide-MFN clauses; (ii) restricting sellers from reaching out to public authorities for conflicts between the sellers and the marketplace; (iii) using non-public data gathered from the sellers’ activities against sellers for competitor products; (iv) self-preferencing its own products; and (v) obstructing data transferability.
Remarkably, the Authority also recommends that gatekeepers notify the Authority of all the mergers and acquisitions they undertake, independently of the notification thresholds given in Communiqué No. 2010/4 Concerning the Mergers and Acquisitions Calling For the Authorization of the Competition Board.
The Authority once again demonstrated the importance it gives to digital platforms and its aim to be in line with the EU approach. Indeed, many of the policy recommendations and competitive considerations expressed by the Authority are in line with the assessments and stances at the EU level. The Authority is also separately carrying out a broader study of the digital economy, with a view to promulgating a Digitalization and Competition Policy Report that will lay the foundation of enforcement priorities and regulation of the digital economy – which also includes online marketplace platforms. The stance taken in the current Report, and in particular the adoption of the gatekeeper terminology, hints that the expected regulatory instruments on the digital economy will closely follow the EU’s Digital Markets Act.
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