The study “The Impact of Digital Transformation on Competition Law” was translated to English.

The increase in internet use and the pace of technological developments have profoundly affected the business models and operating principles of undertakings all over the world. This transformation has also reshaped consumer preferences in digital markets. Digital markets, with their many features that differ from traditional business models and challenge competition law application, are increasingly coming into the focus of competition authorities and are frequently the subject of scrutiny. In this context, answers are sought to the questions of what competitive interventions appropriate to the structure and functioning of digital markets not only in Türkiye but also on a global scale, and how competition law and policy may be shaped in the near future.

The experience of the Turkish Competition Authority (TCA) in digital markets shows that these markets have different characteristics from traditional markets, and it may be relatively difficult to define the relevant markets, to properly assess the market power of undertakings in these markets, to correctly identify the infringing conduct within the framework of a theory of harm, and to design an appropriate and effective remedy for the infringement. This is because digital markets are characterized by features such as strong network effects, market power built on data ownership, tipping nature of markets, high barriers to entry and market growth, the ability of undertakings to quickly reach extraordinary sizes and easily shift their activities to different sectors, and hosting dozens of different business models. The combination of all these characteristics significantly affects and often complicates the application of competition law in these markets universally, thus leading to the search for new tools in terms of competition law practice.

The fact that the number of internet users and the time spent on the internet is gradually increasing due to the population growth in Türkiye causes these users to encounter with undertakings operating in digital markets at every point of daily life. This may cause consumers/users to be more affected by the actions of these technology undertakings that limit and/or may limit competition. In addition to the potential impact on consumers, there is a risk that investments, incentive for innovation and the competitive structure of digital markets could be negatively affected by these actions. 

To this end, the study carried out by the TCA regarding the applications of Turkish competition law in digital markets and the difficulties encountered in these markets, and therefore the policy changes needed in these markets, has been finalized. The study concerning many stakeholders, from consumers to large technology companies which aims to create a future-oriented roadmap for digital markets, is being shared with the public, as it is anticipated that the interaction and feedback to be provided will contribute.

Thanks to the study, it has become possible to reveal the TCA’s perspective on digital markets, its existing legal instruments under the Act No. 4054 on the Protection of Competition, its concrete practices in this area, and to shape its goals and vision for the near future.

The Digital Markets Act, the EU's regulation to make the markets in the digital sector fairer and more contestable, designated six companies as gatekeepers and has been implemented as of March 7. The Turkish Competition Authority is following the process in the Commission upon the submission of compliance reports by the relevant companies. In addition to that an assessment study on this issue is also being conducted by the TCA.

Please click here for the full text of the study titled “The Impact of Digital Transformation on Competition Law”.