New Development
The announcement published on the Turkish Competition Authority's website on 16 July 2020 provides that a sector inquiry has been launched regarding the e-marketplace platforms that are among the important players of the online retail channel as per the Competition Board's decision dated 11 June 2020 and numbered 20-28/353-M. The announcement states that e-marketplaces differ from traditional markets due to their platform economy's operation and effects, and they are among the leading market players that determine the competitive structure of the new economy with their business models and market behaviors. In addition, the following information is provided on the key developments that underpin the sector inquiry and the scope and nature of the inquiry.
- The market power of the e-marketplaces based on data ownership and network effects, along with the effect of their role in the market as both platform owners and sellers, feed competition law concerns regarding abuse of market power.
- The possibility that the e-marketplaces could conduct exclusionary and/or exploitative practices through pricing, platform services and procurement behavior is increasingly becoming one of the main topics both in competition law-related investigations and in literature all over the world.
- The cases reviewed by the Competition Board highlight that the sector has different competitive dynamics and, thus, it has a complex and different structure and functioning than the traditional legal framework envisages.
The Turkish Competition Authority's announcement is available here (in Turkish).
What Does the Development Mean?
As is evident from the Online Platforms and Digital Advertising Market Study Report recently published by the Competition and Markets Authority of the UK, the competition authorities have been conducting sector inquiries to gain a better understanding of online platforms. Indeed, the Turkish Competition Authority launched the Digitalization and Competition Policy initiative to determine the fundamental policies of the digital economy at the beginning of 2020 and the Competition Board assigned a number of duties to the Strategy Development Department regarding the digital economy through a recent decision (dated 7 May 2020 and numbered 20-23/307).
This recently launched sector inquiry can also be seen as part of the Turkish Competition Authority's recent interest in this area. In fact, the announcement states that understanding the (potential) competitive and anti-competitive effects of e-marketplaces and establishing effective policies based on them constitute an important step in the new economy to have a healthy competitive structure. In this regard, the announcement explains that the E-Marketplace Platforms Sector Inquiry was launched to lead this step.
Conclusion
As stated in the announcement, the Turkish Competition Authority aims to reach out to the e-marketplaces, as well as consumers shopping on these platforms and suppliers conducting sales on these platforms, and the association of undertakings representing them to ensure maximum participation and to obtain in-depth data. The announcement indicates that the Turkish Competition Authority's report, which will be completed with the help of the collected data, aims to reveal a comprehensive snapshot of the competitiveness of the sector and determine the steps to be taken from a competition law and regulation perspective to ensure an effective and competitive structure on this basis.
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