The Framework

Turkey’s competition law regime has evolved into a robust regulatory framework that closely mirrors and sometimes surpasses the European Union’s Digital Markets Act (DMA). The Turkish Competition Authority (TCA) has proposed amendments to Law No. 4054 that would create a separate structure for regulating digital firms, granting extensive powers to designate companies as “gatekeepers” based on both quantitative thresholds and qualitative criteria.[1] The law would impose stringent restrictions on practices such as self-preferencing, data usage across services, and mandatory interoperability requirements. What sets the Turkish approach apart is its even broader scope compared to the DMA; for instance, its prohibition on self-preferencing goes beyond specific activities to encompass undefined “other conditions,” and its interoperability requirements apply to all core services rather than just operating systems and virtual environments assistants.

Implications for U.S. Technology Companies

This approach presents increased challenges for U.S. technology companies. The law introduces significant business uncertainty due to its broad and occasionally vague provisions, potentially imposing stricter restrictions than even the EU’s already stringent DMA. Large American tech companies could face sweeping bans on common business practices such as using non-public data when competing with other business users, requiring linked services for functionality, and merging user data across offerings—even with user consent. The potential penalties are severe, with fines reaching up to 10 percent of annual turnover and doubling for repeat offenses. Furthermore, Turkey’s political landscape indicates these regulations may be enforced more vigorously than similar rules in the EU, as evidenced by how Turkey adopted EU-style digital services regulations to serve domestic political ends.

How China Benefits

While the regulations seem neutral at first glance, they create opportunities for Chinese tech companies to make inroads in Turkey’s digital market. As large U.S. tech companies struggle with implementing extensive operational changes and face potential limitations on their core business models, Chinese firms—with their experience navigating strict state oversight and maintaining separate operational structures for different markets—may be better positioned to adapt. Moreover, smaller Chinese platforms can get a foothold because the US companies are hamstrung and gain market power. The Turkish regulatory approach’s focus on breaking up integrated services and limiting data advantages could particularly disadvantage the traditional strengths of U.S. companies while aligning with the existing operational patterns and structure of Chinese firms. This dynamic could subtly alter the competitive landscape in Turkey’s digital economy away from U.S. leadership without explicitly favoring Chinese alternatives.

Endnotes