The Framework

Turkey’s digital market regulation is evolving, with draft rules that are modeled after the EU’s Digital Markets Act (DMA), aiming to tackle the dominance of large technology platforms. These proposed regulations focus on ensuring interoperability between digital services. They will require platforms with significant market power (USMPs) to facilitate services like data portability, allow multiple e-payment options, and ensure seamless communication with other services. The Turkish Competition Authority (TCA) will enforce these rules and can impose penalties for non-compliance. The regulations also aim to prohibit practices like self-preferencing, misuse of private data when competing with platform users, and tying services together. While the specifics are still in development, these regulations are expected to impose strict ex-ante measures on USMPs operating in Turkey.[1]

Implications for U.S. Technology Companies

The proposed interoperability regulations present several challenges for U.S. tech companies. The rules’ ex-ante prohibitions, such as bans on self-preferencing and the use of private data for competition, will increase compliance costs and could undermine user experience through restrictions on seamless integration of services. Furthermore, the Turkish government has broad discretion in determining which platforms qualify as USMPs, which could lead to arbitrary enforcement that disproportionately affects U.S. companies. If the regulations apply not just to specific core platform services but to all services provided by USMPs, the scope of these rules will be significantly wider than the DMA, further complicating business operations for U.S. companies. Additionally, the potential for TCA intervention in mergers and acquisitions, along with possible penalties for non-compliance, could discourage U.S. firms from pursuing business opportunities in Turkey.[2]

How China Benefits

China could indirectly benefit from Turkey’s regulatory framework. As the regulations impose significant restrictions on U.S. tech companies, Chinese companies may gain a competitive edge. If U.S. firms are constrained in their ability to offer integrated services, Chinese platforms, which are not bound by similar restrictions, could fill the gap by offering more flexible and seamless alternatives. This shift could help Chinese tech companies expand their influence within Turkey’s digital landscape. Furthermore, if the regulations limit the data-driven capabilities of U.S. firms, Chinese companies, which are less likely to be subjected to such restrictions, may benefit from the opportunity to increase their presence in Turkey, further strengthening China’s position in the global digital economy.[3]

Endnotes