Restriction of Data Portability as an Antitrust Concern
Data is one of the driving forces of the digital economy and constitutes the basic input of production processes, logistics, targeted marketing, smart products and services. The competitiveness of undertakings, which are also measured by the quantity, variety and quality of the data they possess increasingly depends on their ability to access data in a timely manner and to use this data for new products, innovative applications and product development.
Data portability, which can briefly be expressed as the right to control personal data, may also be equally important for the protection of competition in a free market economy. Data portability can empower users by making it easier for them to transfer their data across different digital services, which promotes a more competitive and innovative market landscape. By reducing switching costs and lock-in effects, users can shift between platforms without feeling “being trapped” by the extensive data they may have accumulated in one service. This is particularly beneficial in markets dominated by a few large companies, where users often are unable to leave due to fear of losing their personal data or due to inconvenience.
The significance of data portability and restriction of data portability as an antitrust issue in digital platforms is also highlighted in its recent decisions of the Turkish Competition Authority (“TCA”).
Nadirkitap Decision
The subject matter of the case is the allegation that Nadirkitap, which sells second-hand books through its website, violated Article 6 of Law No. 4054 (“Law No: 4054”) by making it difficult for competing undertakings to operate as Nadirkitap was not providing book inventory data to its seller members who want to market their products through competing intermediary service providers.
Below are the key points highlighted by the TCA:
- Nadirkitap’s Data Transfer Restrictions: Nadirkitap, by regularly rejecting sellers’ requests for data transfer, has limited access of the sellers to their own business data, which can lead to significant operational challenges for these sellers.
- Suspension of Accounts Using Third-Party Software: When sellers attempted to use third-party tools to retrieve and upload their inventory data to other platforms, Nadirkitap responded by suspending their accounts. This practice effectively locks sellers into the platform, restricting their flexibility and potential to expand onto other platforms.
- Manual Data Upload by Sellers and Lack of Back-Up: Since most sellers manually uploaded their inventory data to Nadirkitap without alternative backups, their dependency on the platform increases. This creates a higher barrier to exit, making it more costly and difficult for sellers to transition to competing platforms.
TCA, with its decision dated 07.04.2022, resolved that actions of Nadirkitap increased the switching costs for the sellers to move to competing platforms, thereby hindering competitors’ access to sellers and, consequently, to their operations, as well as creating a barrier to market entry for new undertakings. Therefore, it has been concluded that Nadirkitap’s actions in limiting data access and data portability fall within the scope of “preventing, directly or indirectly, another undertaking from entering into the area of commercial activity, or actions aimed at complicating the activities of competitors in the market,’ as specified in Article 6, paragraph 2(a) of Law No. 4054, thereby violated Article 6 of Law No. 4054.
The Decision ultimately highlights the crucial role of data in digital, particularly multi-sided, markets and offers valuable insights into the anticompetitive impacts of restrictions on data portability in these environments.
Sahibinden Decision
As per the announcement of the TCA dated 23 August 2023, Sahibinden Bilgi Teknolojileri Pazarlama ve Ticaret AŞ (“Sahibinden”) was fined with monetary fines due to abuse of dominance. It was decided by the TCA that Sahibinden made it harder for its corporate members to use multiple platforms by preventing data portability, implemented actual/contractual exclusivity by this method and that the non-compete obligations it introduced in its contracts obstructed the operations of its competitors and thereby violated Article 6 of the Law No: 4054 by abusing its dominant position.
In order to end the violation and to ensure the establishment of effective competition in the market, TCA has imposed certain obligations on Sahibinden such as establishing an infrastructure, free of charge, that will enable corporate members of Sahibinden to effectively transfer the real estate and vehicle advertisement data that they provide on the Sahibinden platform, to competing platforms and to keep the data contained in these advertisements up-to-date without any charge.
The Sahibinden case underlines the importance of data portability as a competition issue in digital platforms. The decision demonstrates that dominant platforms may be required to facilitate easier data transfer, not only within the data protection frameworks but also to support competitive markets.
Conclusion
As per the recent approach of the TCA, it is clear that the refusal of market-dominant undertakings to provide or facilitate data portability will be considered as a form of exclusionary abuse. It is, therefore important for the actors in digital platform to implement an infrastructure to facilitate data portability enabling its users to transfer their data to other platforms more freely.
