The Teachings of the Provisional Measure Decision Given by the Competition Authority Alleging that Trendyol Self-Favored Its Own Brand
With the development of multi-category e-marketplaces and the significant increase in market shares in these platforms during the Pandemic process, which we have been in for a while globally, it has become inevitable for the Competition Authority (“the Authority”) to conduct investigations in this area. In this context, at the Competition Board Meeting dated 23.09.2021, DSM Grup Danışmanlık İletişim ve Satış Ticaret A.Ş. (“Trendyol”) Law on the Protection of Competition (“Law”) article 9, As a result of the preliminary inquiry, it was decided to apply a provisional measure. In this article, the details of the decision will be examined.
Trendyol, which is the subject of the relevant decision, provides e-marketplace services by bringing together consumers and sellers, and also competes with third-party sellers in the fashion sector by including its own brands (TrendyolMilla, TrendyolMan, TrendyolKids); Considering the transaction volume of the platforms operating as a multi-category e-marketplace by the institution, it is considered to be in a dominant position in its own market and it has been revealed that it is not exposed to competitive pressure even by its closest competitor. It is emphasized that the reason for this is the anti-competitive and non-transparent practices that they used.
According to the findings reached as a result of the on-site inspection made by the Authority in Trendyol on 22.09.2021 before the decision was made:
- The algorithm has been intervened to provide an advantage to the products of TrendyolMilla, TrendyolMan and TrendyolKids brands, which are offered for sale as a retailer, and that “next day delivery” is provided to İstanbul-based users with TrenyolExpress, which is also Trendyol’s own creation,
- Suspicion of detecting popular products in the eyes of consumers by using data from third-party sellers selling in the marketplace, which gives a great idea about consumer behavior and preferences, again to the advantage of its own retail activity.
- As a result of the interventions in the algorithm, the suspicion has arisen that he discriminated among the sellers selling in the marketplace, on the grounds that the sponsored products rank higher in the organic ranking even after the advertisement period ends, which is incompatible with the transparency.
In the opinion of the rapporteurs, within the scope of this interim injunction, Trendyol’s
- Refrain from all kinds of actions, behaviors and practices, including interventions made through algorithms and coding, which will provide an advantage compared to its competitors, towards its products and services under its own economic integrity, and to avoid these behaviors in the continuation of the investigation process.
- In terms of Marketplace activities, it stops sharing and using all kinds of data obtained and produced in a way that will provide an advantage to its products and services under its economic integrity compared to its competitors, and to avoid these behaviors in the continuation of the investigation process,
- Refrain from all kinds of actions, behaviors and practices, including interventions made through algorithms and coding, which may discriminate among sellers selling in the marketplace, and to avoid these behaviors in the continuation of the investigation process,
- To take all necessary technical, administrative and organizational measures to ensure the implementation and auditability of the above-mentioned injunctions,
- store the parametric and structural changes made on each algorithm model used for product search, seller listing, seller points calculation, etc. in a way that is versioned and that may be justified beyond any doubt for at least 8 years;
- store the source codes of all software developed for Trendyol in a way that is versioned and that may be justified beyond any doubt for at least 8 years;
- store the user access and authorisation records to all software used to execute the business activities of Trendyol in a way that may be justified beyond any doubt for at least 8 years.
Trendyol is given 30 days to implement the above measures—with the exception of measure (iv), for which the company must submit a course of action within 30 days. Board’s decision is subject to appeal at the Ankara Administrative Courts for a period of 60 days.
While this decision taken by the Authority is an important precedent for all platforms providing multi-category e-marketplace services, it is revealed that the delay of the necessary intervention by the Authority against practices that do not comply with transparency in the eyes of consumers may lead to irreversible consequences.