In March 2022, the Authority incorporated a new terminology into Turkish competition law, namely “technology undertakings1 ”, with the primary objective of identifying so-called “killer acquisitions”. Should a target entity fit this definition, a simplified turnover threshold is applied; if other thresholds are satisfied, the transaction may warrant notification without adhering to the TRY 250 million turnover threshold designated for the target.

We have previously delved into the broad scope of this novel concept in earlier editions, underscoring the resultant confusion among practitioners of Turkish competition law. The absence of secondary legislation or guidelines explicating the specifics of this exception is at the root of this perplexity, rendering the case-law of the Board invaluable for establishing the practice.

A milestone development occurred when the Authority published its reasoned decision, imposing a fine on Elon Musk for premature acquisition of Twitter, marking a precedent as the first gun-jumping case following a year since the introduction of the technology undertaking concept. This reflects the Authority's stringent enforcement of this new rule, notwithstanding Twitter's counterarguments.

Understanding Technology Undertakings: Gleaning Insights from Case Law

The Authority has disclosed over 20 decisions within less than two years concerning technology undertakings, offering valuable insights into this burgeoning area.

  • In its inaugural decision on a technology undertaking2 , the TCB ascertained that the targets' endeavours in digital workspace solutions, infrastructure, and analytics software services were encompassed by the definition of a technology undertaking. Predominantly, firms within the software sector have been identified as technology undertakings by the Board3 . In a more recent case, Elon Musk/Twitter4 , Twitter, delineated as a digital platform pursuant to its engagements in social networking, online advertising, and data licensing services, was recognized as a technology undertaking. This case garnered attention as the Board imposed an administrative fine on Elon Musk for failing to notify the Authority of the acquisition, despite Twitter being a technology undertaking and the acquisition necessitating the Board's approval.
  • The Musk/Twitter case is particularly noteworthy as the inaugural gun-jumping case concerning a technology undertaking. The decisions elucidate that Twitter presented several arguments, such as; (i) Twitter and Meta signed the agreement before the amendment on the technology undertaking, (ii) the Authority lacked any precedents or the secondary legislation that properly directs the undertakings, (iii) the transaction would not particularly have an impact in Turkey and (iv) Twitter financially had negative outcomes in Turkey at the time of the notifiability analysis. However, they were not accepted by the Authority.
  • Following the software sector, pharmacology is emerging as a significant sector concerning technology undertakings5. For instance, in Astorg/Corden6, the TCB deemed that the target entity, engaged in the production of active pharmaceutical ingredients (APIs) and ready-to-use drugs on behalf of pharmaceutical companies, qualifies as a technology undertaking due to its activities in the pharmacology domain. More recently, in the Werfen/IVD7 case, the Board recognized the target as a technology undertaking operating within the realms of pharmacology and/or health technologies sectors. This was based on the provision of (i) serology-based reagents, equipment, and molecular products aimed at ensuring patient-donor compatibility and facilitating accurate pre-transfusion test results in an efficient and effective manner, and (ii) products designated for determining the most suitable pathways for organ or bone marrow transplantation and for monitoring potential organ/ tissue incompatibility post-transplantation.
  • The financial technology sector also presents notable instances of technology undertakings8. In Berkshire/ Alleghany9, despite Alleghany's financial technology activities occurring outside Turkey and bearing no relevance to regulated sectors in the Amendment Communiqué within Turkey, the TCB adjudged Alleghany as a technology undertaking since it satisfied the criteria of having a presence in the Turkish geographic market. More recently, in Turan Teknoloji/ Birleşik Ödeme,10 the Board stated that since the target was developing a digital finance application for international money transfers, it operated in the field of financial technologies and therefore qualified as a technology undertaking.
  • A singular decision in Affidevia/Groupe Bruxelles11 identified the target's diagnostic imaging activities as falling under the technology undertaking definition in terms of biotechnology, marking the Board's only decision involving a technology undertaking in the biotechnology sector thus far.

Conclusion

These reasoned decisions indeed elucidate the newly incepted concept to some extent. Nevertheless, the absence of comprehensive guidance could potentially engender complications in the future, especially as technology increasingly intertwines with various facets of contemporary business operations. A plethora of firms are inevitably transitioning towards technology-centric operations, and may inadvertently fall within the technology undertaking definition irrespective of their association with killer acquisitions. To mitigate legal uncertainties and avert potential gun-jumping dilemmas, further guidance from the Authority remains a pressing necessity.

Footnotes

1. The Authority defines technology undertakings as undertakings operating in various sectors, such as digital platforms, software, gaming software, financial technologies, biotechnology, pharmacology, agrochemicals, and health technologies.\

2. Citrix&TIBO/Elliot/Vista decision dated 12.05.2022 and numbered 22- 21/344-149.

3. Cinven/IFGL decision dated 18.05.2022 and numbered 22-23/372-157; Providence/Airties decision dated 02.06.2022 and numbered 22-25/403- 167; Mandiant/Google decision dated 09.06.2022 and numbered 22- 26/425-174; Oplog/Espro decision dated 08.08.2022 and numbered 22- 35/543-219; Klaravik/Castic decision dated 08.09.2022 and numbered 22-41/582-242; Softline/Macronet decision dated 03.11.2022 and numbered 22-50/733-305; EBRD/Invent decision dated 10.11.2022 and numbered 22-51/744-308; Open Text/Micro Focus decision dated 10.11.2022 and numbered 22-51/745-309; Iron Mountain/CBK decision dated 23.11.2022 and numbered 22-52/788-324; Mitsubishi/HERE decision dated 01.12.2022 and numbered 22-53/796-326; Playtika/ACE decision dated 08.12.2022 and numbered 22-54/823-336; Cascade/ Nitro decision dated 05.01.2023 and numbered 23-01/22-9; TCI Kabin/ Cornea dated 12.01.2023 and numbered 23-03/35-15; Altor&Marlin/ Meltwater dated 30.03.2023 and numbered 23-16/276-95.

4. Elon Musk/Twitter decision dated 02.03.2023 and numbered 23-12/197-66.

5. CD&R/TPG/Covetrus decision dated 07.07.2022 and numbered 22-32/512-209; AmerisourceBergen/Pharmalex decision dated 23.11.2022 and numbered 22-52/775-319.

6. Astorg/Corden decision dated 02.06.2022 and numbered 22-25/398-164.

7. Werfen/IVD decision dated 22.11.2022 and numbered 22-56/874-360.

8. Re-Pie/Hızlıpara decision dated 08.12.2022 and numbered 22-54/842- 347; Hedef/Vepara decision dated 01.12.2022 and numbered 22- 53/816-335.

9. Berkshire/Alleghany decision dated 15.09.2022 and numbered 22- 42/625-261.

10. Turan Teknoloji/Birleşik Ödeme dated 29.12.2022 and numbered 22-57/900-370.

11. Affidevia/Groupe Bruxelles decision dated 16.06.2022 and numbered 22-27/431-176.

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.