Turkey: The Turkish Competition Authority Rejected The Successive Individual Exemption Application For Credit Card Information Storage Services Offered By BKM

The Board published its reasoned decision on Bankalararası Kart Merkezi A.Ş.'s ("BKM") request to revisit/reexamine a previous decision[1] ("Rejection Decision") where the Board had rejected BKM's individual exemption request for some credit card information storage services.[2]

BKM is a trade association formed by 13 major banks in Turkey. It mainly operates as a payment system operator under Law No. 6493. BKM also offers services such as swap and settlement, online payment solutions, authentication, digital wallet services and credit card information storage.

BKM's credit card information storage service offers a system which is integrated with BKM member banks concerning storage of users' credit card information. This service enables businesses not to request, receive or store credit card information from customers. Instead, BKM acts as an agent by keeping customers credit card information for any type of transactions and store encrypted card information for repeated customer transactions. That way, customers would not be required to submit their credit card details for each transaction. This reduces the risk for businesses in storing sensitive data and their concerns relating to the compliance with the Payment Card Industry Data Security Standards.

Concerning its credit card information storage operations, BKM filed an individual exemption application before the Turkish Competition Authority ("Authority") in 2017 regarding its credit card information storage services. The Board granted these services an individual exemption for one year only.[3] The Board emphasized that even though the relevant services offered by BKM enabled overall efficiencies in terms of businesses, banks and customers, it was nevertheless possible that a considerable portion of the existing competition could be hampered in the market and therefore held that further developments must be closely monitored.

Following the one-year term, BKM made another application to the Authority concerning the extension of one-year exemption given in 2017. The Board rejected this request on the basis that BKM's credit card information storage services did not meet the conditions set under Article 5 of Law No. 4054.[4] In the Rejection Decision, the Board noted that although BKM's application was first perceived as a technical progress that is based on a different system than other payment institutions, the one-year period showed that the difference was in fact due to the integration banks provided to BKM, but not to rival payment institutions.

Following this Rejection Decision, BKM, the Turkish Association for Insurance, Reinsurance and Retirement Companies ("TSB") and Metlife Emeklilik ve Hayat A.Ş. ("Metlife") requested the Board to re-evaluate its Rejection Decision pursuant to Article 11 of Law No. 2577 on Administrative Procedure.

Nevertheless, due to (i) the developments observed in the market in the one-year exemption period, (ii) the existing relations of the banks with BKM and the positions of the other players in the market, and (iii) the structure of the market as well as the predictions of the current and potential competition in the market, the Board decided that its previous decision on the issue was in fact on point and the developments in the market have not satisfied the individual exemption requirements set out under Article 5 of Law No. 4054 in order to extend the duration of the exemption given previously.

In its assessment, the Board stated that it reviewed the one-year exemption period and concluded that a significant portion of the credit card information storage services market is closed to competition on the basis that BKM is the most important player in the market and that neither banks nor other credit card information storage service providers operate in such a way as to compete with BKM. The Board further indicated that while it is possible for banks to provide this service internally or to outsource it, the provision of this service under the roof of BKM, an entity formed by various banks competing at the horizontal level, had a negative impact on competition in the market.

BKM and TSB also brought up a new business model adopted by BKM, where BKM would cease its service delivery at retail level but position itself as a wholesale provider for credit card storage services instead. The Board stated that in case said services were to be provided by BKM to other credit card storage institutions; (i) credit card storage institutions would become dependent on BKM, (ii) provision of this service at wholesale level would reduce credit card storage institutions' incentive to invest in this field, (iii) commercially sensitive information belonging to credit card storage institutions, such as customer information, number of contracted businesses, etc. would be shared with BKM, and (iv) potential problems or flaws in BKM's system would damage the whole system. According to the Board, the termination of BKM's activities at retail level would not cease the foregoing competitive concerns since BKM and said institutions would remain competitors in digital wallet services. As a final remark, the Board highlighted that pursuant to the Rejection Decision, the provision of this service under the roof of BKM instead of banks alone would not create any efficiency in terms of Article 5(a) of the Law No. 4054 and BKM's provision of this service at wholesale level would not alter the situation.

In light of these evaluations, the Board decided not to revoke, alter or dismiss its Rejection Decision. Therefore, the Board rejected the re-examination application requesting extension of individual exemption for the credit card storage services offered by BKM.

[1] The Board's decision dated June 12, 2018, and numbered 18-19/337-167.

[2] The Board's decision dated November 22, 2018, and numbered 18-44/698-342.

[3] The Board's decision dated March 23, 2017, and numbered 17-11/134-61.

[4] Article 5 of Law No. 4054 sets out four requirements which must be satisfied by the undertakings in order to obtain an individual exemption: (a) ensure new developments and improvements, or economic or technical development in the production or distribution, (b) benefit the consumer from the abovementioned, (c) not eliminate competition in a significant part of the relevant market, (d) not limit competition more than what is compulsory for achieving the goals set out in sub-paragraphs (a) and (b).

This article was first published in Legal Insights Quarterly by ELIG Gürkaynak Attorneys-at-Law in June 2019. A link to the full Legal Insight Quarterly may be found here

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions