News

29.04.2023

Turkish Competition Authority’s Leading Decision on Data Portability

Turkish Competition Authority (“TCA”) adopted a decision finding that Nadirkitap Bilişim ve Reklamcılık AŞ (“Nadirkitap”), an online bookstore platform comprising independent booksellers, has violated Article 6 of the Act No. 4054 (“Turkish Competition Law”) and abused its dominant position by preventing access to and portability of book data uploaded to www.nadirkitap.com by booksellers without justification. The TCA imposed a fine of 346.000 Turkish liras to Nadirkitap in respect of this infringement. Full decision was published in the TCA’s website and is available online in Turkish: (https://www.rekabet.gov.tr/Karar?kararId=b41fb670-edee-4cd3-b58c-f5f3e8118d38)

Background

Nadirkitap book marketplace comprises new and second-hand books being sold by independent bookshops. Independent sellers upload their inventories manually to the website, where all books are listed together.

The applicant who conducts its online sales on Nadirkitap, requested its data inventory for transferring it to another online platform, and Nadirkitap refused to provide it. The applicant claimed that Nadirkitap has abused its dominant position in the market by complicating and restricting the activities of competitive undertakings.

TCA’s Evaluation

According to the TCA, Nadirkitap has the dominant position in the market of “online store platforms for second-hand books”. Because, (i) it has a high and steady market share; (ii) Reaching a sufficient number of sellers and buyers is a great challenge that hinders market entry and growth of new undertakings; (iii) Thanks to its high number of contracted sellers, Nadirkitap has the potential to create significant barriers to entry to the market; (iv) Sellers cannot carry their inventory data from Nadirkitap to other platforms; and (v) Nadirkitap’s dominant position is reinforced by the amount of exclusive data it possesses. 

During the investigation, it was discovered that, (i) Nadirkitap was regularly rejecting the demands of data transfers of sellers, (ii) Nadirkitap was suspending the accounts of sellers when they used a third-party software to download their data and upload it to other platforms, (iii) Most of the inventory data of Nadirkitap was manually uploaded by independent sellers, (iv) Many of the sellers did not have a back-up inventory other than Nadirkitap.

The investigation was about the portability of business data, which does not fall under the subject of the right to data portability regulated by GDPR and the Turkish Data Protection Law. However, according to the Turkish TCA, the restriction of data portability by the dominant undertaking may cause entry barriers for competitors by creating artificial switching costs. Thus, it may constitute an abuse of dominant position by exclusionary practices.

After the investigation TCA has concluded that, Nadirkitap was abusing its dominant position in the market by denying the access and transfer of data of business users. Since:

• Nadirkitap’s practices of rejecting the demands of data transfers, and deactivating sellers’ accounts in the case of unauthorized transfers, could force sellers to work solely with Nadirkitap.

• Even though Nadirkitap argued that there is no obstacle for sellers to upload their data manually to other platforms, considering the sheer amount of data (that could reach more than 50.000 books with photos), it was exhaustive for sellers to work with other undertakings.

• Since they do not have backup inventories, many sellers are dependent on Nadirkitap to monitor their inventories. Consequently, they stopped using other platforms when Nadirkitap threatened to freeze their accounts.

Conclusion

Since its effects on competition are becoming more evident, data is becoming a focus point of forthcoming digital regulations. Access to an exclusive data set can give an undertaking potential advantages and thereby raises barriers to entry. However, there is no consistent practice by competition authorities, or finalized court decision about the applicable rule of law when an undertaking prevents data portability of businesses. 

The decision of the Turkish Competition Authority underlines the importance of ex-ante regulations in e-commerce systems and signals that similar decisions are to come. It is clear that TCA’s landmark decision will be significant for the future of competition law. It puts forward that; simply blocking the access or transfer of commercial data uploaded to a specific platform could mean abuse of dominant position. In light of this decision, it is possible to see a shift in the practice of large platforms even before the forthcoming regulations such as new E-commerce Law.