The Competition Authority has initiated a comprehensive sector inquiry into the online sector on 21.01.2021. The preliminary findings of this inquiry were shared with the public under the title "Preliminary Report on the Online Advertising Sector Inquiry" on April 7, 2023, on the Authority's website. Access to this Preliminary Report can be obtained through the following link: https://www.rekabet.gov.tr/Dosya/1-cevrimici-reklamcilik-on-raporu.pdf
On December 20, 2023, a Workshop on the Preliminary Report on the Online Advertising Sector Inquiry was held at Ankara Bilkent Hotel. The purpose of the Workshop was to share the findings and recommendations from the Report with the public and to create a conducive environment for exchange of views. The program commenced with an opening speech by Mr. Birol Küle, the President of the Turkish Competition Authority. Presentations were made to the participants by the Presidency of the First Supervision and Enforcement Department on the findings, observations, assessments, and policy recommendations from the Preliminary Report of the Online Advertising Sector Inquiry. The program, which lasted about seven hours, concluded with the contributions of opinions and suggestions from sector players, trade association representatives, and academics.
During the Workshop, detailed examinations of the competitive concerns in the online advertising sector were presented (as per the Preliminary Report on the online Advertising Sector Inquiry) under various headings by the competition experts assigned in the inquiry.
The competitive concerns and the Authority's solution/policy suggestion is listed and explained below in a compact manner. These are the most important topics discussed at the Workshop:
- Conflicts of Interest Arising from Vertical Integration:
The first concern is conflicts of interest arising from vertical integration in the supply chain of advertising technology. Such conflicts, especially prominent in entities like Google with substantial market power, occur when vertically integrated ad tech providers face a clash between their own services and their customers' interests. These conflicts intensify competition concerns and are acknowledged as a significant competition issue.
Solution/Policy Suggestion: Facilitating contributions from stakeholders of the sector analysis and creating a collaborative and dialogical environment.
- Google's Self-Preferencing and Tying Practices:
The second concern involves Google's practices of self-preferencing and tying. Operating at every stage of the advertising supply chain, Google holds a strong position that could potentially leverage its advertising technology services or specific ad inventories to benefit other related services. This concern is echoed by sector stakeholders and some international competition authorities, citing Google's potential to use its search advertising market strength to bolster its own DSP or to exclusively link the use of YouTube inventory to its DSP.
Solution/Policy Suggestion: Conducting investigations under Law No. 4054 and addressing violations with existing competition law tools.
- Google's Advantage in Data Access and Data Merging:
The third concern addresses Google's substantial position in accessing and merging data from different services, creating a competitive advantage potentially used against its rivals.
Solution/Policy Suggestion: Proposed amendment in the "Act No. 4054 on the Protection of Competition" includes (the draft act is expected to be enacted in 2024):
"...Preventing rival enterprises from entering the market or hindering the effective competition of those already in the market;
- They cannot merge personal data obtained from primary platform services with other services or third parties unless necessary for the performance of a contract with the end user, nor can they process this merged data, especially for targeted advertising.
2) They cannot process competitively sensitive data obtained from commercial users for purposes other than service provision unless clear, explicit, and adequate options are provided to the commercial user."
- Transparency Issues in the Ad Tech Supply Chain:
The fourth concern is the lack of transparency in the ad tech supply chain. For effective competition, advertisers and publishers need to make informed choices about the services and providers they use. Enhancing transparency in the chain is crucial for fostering competition in this area.
Solution/Policy Suggestion:
A proposed amendment in the law for enhancing transparency, Act No. 4054 on the Protection of Competition (the draft act is expected to be enacted in 2024):
"...[online advertisement service providers] provide free, continuous, and real-time complete information to advertisers, publishers, advertising intermediaries, or their authorized third parties on pricing conditions, auction process, pricing principles, and fees paid to publishers for relevant ad services, including visibility and availability of the ad portfolio, as well as access to ad verification and performance measurement tools and the necessary data for their use."
- Impact of Digital Platforms on News Publishers:
The fifth concern highlights the inevitable role of digital platforms as commercial partners for news publishers, potentially leading to a decrease in publishers' advertising revenues or a shift of these revenues to digital platforms. This situation poses a risk to the operations of news publishers, potentially resulting in fewer or lower-quality news content.
Solution/Policy Suggestion: Collaboration with the General Directorate of Copyrights under the Ministry of Culture and facilitating contributions from stakeholders of the sector analysis and creating a collaborative and dialogical environment.
- Google's Privacy Sandbox Initiative:
The sixth concern focuses on Google's Privacy Sandbox initiative, which aims to phase out third-party cookies in the Chrome browser, creating uncertainty and concerns in the sector. This move could advantage Google in user tracking and data collection while favoring its own ad tech providers and owned-and-operated ad inventories.
Solution/Policy Suggestion: Collaboration between the Information Technologies Department and the First Inspection and Implementation Department for monitoring developments.
- Apple and Google's Mobile Online Advertising Practices:
The seventh concern relates to Apple and Google's restrictions on third-party applications accessing user identifiers on their respective operating systems. These restrictions, critical for the profitability and sustainability of mobile online advertising activities, could potentially raise competition concerns in the mobile online advertising and app markets.
Solution/Policy Suggestion: Awaiting the results of the Turkish Competition Authority's ongoing sector inquiry on mobile ecosystems.
As Gunay Erdogan Attorneys-at-Law, we attended the Workshop to closely follow the sector and better prepare the opinions we will present to the Authority (for shaping the policies in the online advertising sector) on behalf of our clients, We have compiled the key discussions to share with public, as presented above.
Please kindly note that every company, association and stakeholder operating in the advertising sector still have the opportunity to submit their opinions/recommendations to the Competition Authority. Throughout the Workshop, officials from the Competition Authority have been encouraging this, highlighting their inclination towards preparing a participatory report.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
