Unfair Competition and Digital Market Law

1. Introduction

Globally, digitalization has fundamentally transformed the structure of economic relations. Traditional market competition is now shaped more by the data-driven dominance of digital platforms than by physical production . Giant platforms like Amazon, Google, Trendyol, Hepsiburada, and Sahibinden have become multi-layered power centers, operating not only through product sales but also through data flow, algorithmic recommendation systems, and the advertising economy

This situation has transferred the classic unfair competition and abuse of dominant position to the digital realm.
In Turkey, the Law No. 4054 on the Protection of Competition and the recent decisions of the Competition Authority are now redefining the boundaries of competition control in the digital market.

2. The Digital Market and the New Economic Reality

2.1. Characteristics of the Digital Market

Digital marketplaces differ from traditional marketplaces in the following ways:

• Data power: Generating economic value through user behavior data.

• Network effect: As the platform grows, user value increases.

• Multilateral structure: It brings together both sellers and consumers,

• Algorithmic pricing: The use of automated systems to counter real-time changes in competitive conditions.

• The geographical boundaries of the market are disappearing.

In this structure, "dominance" is no longer measured by production capacity, but by data and algorithm control .

3. The Digital Dimension of the Concept of Unfair Competition

3.1. Framework of the Turkish Commercial Code (TCC)

Unfair competition according to Article 54 of the Turkish Commercial Code ,

"It is the abuse of economic competition in violation of the principle of fairness."

In the digital economy, this principle is being violated by new types of behavior such as manipulative algorithms , unfair ad ranking , data access restrictions , and algorithmic discrimination

3.2. Examples of Digital Unfair Competition

• Pushing a competitor's product down in search results,

• Using data obtained from a competing platform to one's own advantage,

• Manipulating or censoring user comments,

• Applying "self-preferential" algorithms that promote one's own products,

• Keeping the user inside the system in such a way that they cannot leave the platform ("walled garden").

These actions are digital versions of classic "deceptive advertising" or "defamation.".

4. Dominant Position and Market Power of Digital Platforms

4.1. Dominant Position under Competition Law

Article 6 of Law No. 4054 ,

It prohibits "abuse of dominant position by one or more undertakings".

In the digital economy, dominant position is no longer measured solely by market share, but by data volume and access control .

So even if a platform has a "market share of 40%", it can still be economically dominant due to its dataset and algorithmic reach .

4.2. The Competition Authority's Digital Approach

The Competition Authority has been conducting investigations specifically into digital markets since 2021.
The most notable examples include:

• Trendyol Decision (2021):
  The authority determined that Trendyol was algorithmically favoring its own-branded products, thereby giving competing sellers a disadvantage.
  As a result, an administrative fine of 40 million TL and mandatory algorithm audits were imposed.

• Google Advertising Decisions (2018–2023): Google was found to have manipulated search results in favor of its own shopping service, abusing its dominant position through “self-preferentializing” behavior
  

These decisions competition law in the digital market needs to be expanded to include data and algorithms .

5. Measuring Digital Dominance

5.1. Inadequacy of Classical Criteria

In traditional markets, dominance was measured by market share, production capacity, and price-setting power.
However, in the digital economy, these criteria are insufficient due to "free services," "data flow," and "multi-party market structures."

Therefore, a new measurement system is needed:

5.2. EU Digital Market Regulation (DMA)

The European Union, with the Digital Markets Act (DMA) which came into force in 2022, has placed limits on the anti-competitive behavior of platforms. According to the DMA, digital giants defined as "gatekeepers" (e.g., Amazon, Google, Meta),

• It will not be able to use data from competing platforms

• They will not be able to algorithmically promote their own services,

• User data cannot be shared with third parties in a way that distorts competition.

Although Türkiye has not yet enacted a regulation equivalent to the DMA (Direct Marginal Mechanism), the practices of the Competition Authority are evolving in that direction.

6. Digital Manifestations of Unfair Competition

6.1. Algorithmic Pricing and Automated Agreement

AI-powered pricing systems can monitor competitors' prices in real time and automatically equalize prices . Unlike classic "price cartels," this creates a form of artificial collusion that disrupts competition without human intervention.

The Competition Authority's 2022 Digital Report issued a clear warning on this matter:

"Coordinated price changes made through algorithmic systems, even if unintentional, may constitute a violation under Article 4 of Law No. 4054."

6.2. The Platform Acting in Favor of Its Own Product

Platforms like Trendyol, Hepsiburada, and Amazon act as both "marketplaces" and "sellers."
This dual role creates a systemic advantage against competing sellers.

Therefore, self-preferential practices are now a digital form of unfair competition .

6.3. Restricting Data Access

A platform may hinder competition.
This is considered a "conduct contrary to the principle of good faith" under Article 55/1-a-5 of the Turkish Commercial Code.

7. Entry of Competition Law Oversight into Digital Zones

7.1. Digital Competition Control

Competition law requires new tools in the wake of digitalization.
In this context the Competition Authoritypublished the "Digital Markets Strategy Document" in 2021.
The document outlines three fundamental strategies for the regulation of digital markets:

1. Data-centric analytics,

2. Algorithm transparency,

3. Proactive monitoring of platform behavior.

7.2. Audit Techniques

• Database analysis: The algorithmic ranking and pricing behavior of platforms is monitored.

• API review: Data restrictions are identified for third-party developers.

• Algorithm transparency reports: Platforms' recommendation and ranking mechanisms are examined.

These tools are digital adaptations of classic “investigation” methods.

8. Digital Competition Law Practices in Türkiye

8.1. Trendyol Decision (2021)

Trendyol's algorithmic promotion of its own products has been deemed an abuse of dominant position under Article 6 of Law No. 4054. This decision is the first example of an "algorithmic competition violation" in Turkey.

8.2. Owner's Decision (2020)

Sahibinden.com has been found to be restricting competition through its pricing policies in real estate and vehicle listings . The authority has deemed the platform's blocking of API access as "creating a data monopoly".

8.3. Yemeksepeti Decision (2016–2022)

Yemeksepeti's exclusivity agreements with restaurants were deemed to be a violation of competition rules, resulting in a fine.
This decision marks the first serious investigation into the effects of digital networks in Turkey.

9. Legal Issues in Digital Marketplaces

1. Data ownership: It is unclear who can use which data.

2. Algorithm control: Balancing trade secrets and transparency is difficult.

3. Global platforms: The authority of the local regulator is being exceeded.

4. Consumer protection: Competition violations are revealed not directly through price, but through "visibility".

These problems necessitate both Law No. 4054 and the revision of the Turkish Commercial Code to adapt it to digital transformation.

10. Reforms and Recommendations

1. Digital Competition Law:
   Turkey should create a sub-regulation specific to digital platforms, similar to the EU's Digital Marketing Agreement (DMA).

2. Data Sharing Obligation:
   Dominant platforms must provide competitors with anonymous data access under certain conditions.

3. Algorithm Transparency:
   The Competition Authority must be explicitly granted the authority to conduct algorithm audits.

4. Digital Definition of Unfair Competition:
   Articles 54 and 55 of the Turkish Commercial Code should explicitly cover manipulation, algorithmic discrimination, and self-preferential behavior in digital markets.

5. International Cooperation:
   Since competition violations are transnational in nature, a data sharing mechanism should be established with the EU and the OECD.

11. Balance Between Fairness and Free Competition

Protecting competition in digital marketplaces is not only an economic necessity, but also an ethical and democratic one.
The power of dominant platforms to influence user behavior can affect not only market equilibrium but public perception .

Therefore, competition law is evolving from a "price"-focused to justice to a data-driven one.

The principle of fairness must be applied not only at the economic level but also at the digital ethical level in the digital age.

12. Conclusion and Evaluation

The increasing dominance of e-commerce platforms to new forms of unfair competition in the digital economy .
Market power is no longer defined by production, but data, algorithms, and access control .

In conclusion:

• Digital platforms have become the new actors in unfair competition.

• Law No. 4054 needs to be strengthened with special provisions for digital markets.

• The Competition Authority's algorithmic monitoring capacity should be increased.

• The Turkish Commercial Code should clearly define digital unfair competition.

• National regulations must be aligned with the EU Digital Market Act (DMA).

In this context, digital competition lawis not only an economic policy; it is also a test of the rule of law in the digital age.
Fair competition is not only a guarantee of market order but also of digital freedom.