Digital Markets Act: Turkey and South Korea Should Learn From Europe’s DMA Mistakes – Disruptive Competition Project

Main takeaways

1. The ‘Brussels effect’ may lead to unintended negative consequences, especially if EU laws such as the Digital Markets Act (DMA) are emulated by other jurisdictions
2. The DMA’s structural issues and over-politicisation shouldn’t be duplicated
3. Turkey risks penalising its own digital firms by adopting DMA-like regulation

Across the globe, we see that lawmakers sometimes consider replicating rules and regulations from the European Union. South Korea and Turkey, for example, have tabled legislative proposals that openly emulate key parts of the EU’s Digital Markets Act (DMA). These proposals aim to regulate the perceived dominance of certain ‘large’ digital technology firms – using arbitrary definitions, thresholds, and concepts similar to those of the DMA, such as singling out ‘gatekeeper’ companies.

In Turkey, the government has proposed amendments to the Turkish Competition Act that would target specific digital platforms. These changes largely resemble the DMA, but in some ways they go even further. The Turkish Competition Authority (TCA) seems to have done this without looking at the structural flaws that continue to plague the DMA. Indeed, Turkey now risks replicating Europe’s mistakes and facing similar (by now predictable) negative consequences.

1. Why the ‘Brussels effect’ is not always positive

The ‘Brussels effect’ describes how the EU influences global regulations, as other countries adopt EU-like laws. Though this might sound helpful, it’s vital to remember that each country’s economic, social, and political situations are very different. And so are the ways those countries and their consumers would be impacted when EU rules are duplicated. This is especially true as Europe itself reckons with the unintended costs of its regulatory push – what former ECB President Mario Draghi recently described as the EU effectively “raising tariffs within its borders”.

Moreover, the DMA is new – marking a break with standard antitrust principles, while its long-term impact and implementation remain unclear. Problems and unintended consequences have started to surface in the two years since the DMA started to apply and the causal link is clear. Regulators outside the EU should thus carefully consider these issues before even thinking about replicating the EU’s rulebook, as they otherwise would amplify the DMA’s flaws around the world.

2. Structural issues with DMA becoming clear

As I explained in more detail before, the Digital Markets Act has led to unprecedented shifts in Europe’s wider digital economy. The DMA was meant to enhance consumer choice, but some are exploiting it to push for self-serving changes or requirements that harm competitors and raise costs. For example, certain firms are pressuring EU institutions to enforce excessive compliance measures, even urging fines ahead of political milestones, turning the DMA into a political tool (or even a protectionist weapon) rather than a fair market regulator.

These changes can also weaken services and introduce security risks, such as exposing users to unvetted third-party content or limiting user access to high-quality digital services. Likewise, requiring platforms to make their services fully interoperable without strong security safeguards can introduce backdoors that nefarious actors exploit. Vulnerable users, like the elderly or minors, now face greater threats, while platforms lose control over safety measures and can no longer fully protect them. These impacts were never the DMA’s intention, and its misuse could ultimately harm Europe’s digital economy. 

DMA enforcers are also struggling to find a good balance between competition and innovation. Some enforcement measures have become overly rigid, leading to restrictions that limit service quality and accessibility. Rather than fostering a competitive digital economy, certain interpretations of the DMA are widening Europe’s tech gap. Excessive regulatory overreach forces companies to adapt their services in ways that hinder growth. 

By imposing one-size-fits-all compliance solutions, the DMA requires firms to offer increasingly more standardised services, reducing incentives for innovation and differentiation, as well as limiting their ability to deliver meaningful improvements to consumers. If the DMA continues down this path, it risks not just stifling innovation but also weakening the EU’s overall digital competitiveness. Other countries shouldn’t want this.

3. Problems with Turkey’s law

While the 2022 draft of the Turkish bill has seen some improvements, serious concerns remain. The TCA has not yet published the intended thresholds, so it is difficult to know which firms exactly would be affected or specifically targeted. However, the general expectation is that tech companies from the EU, China, and the United States will be designated, and successful Turkish companies are likely hit down the line. 

In fact, the regulation may very well penalise Turkey’s own growing digital contenders. Companies like Hepsiburada, Sahibinden, or Trendyol would either be discouraged from growing by DMA-like thresholds, or end up being punished for becoming ‘too successful’ when they qualify for the Turkish equivalent of a gatekeeper.

That’s why Turkey should be wary of importing untested or damaging regulatory experiments from the EU. The DMA is facing criticism for how it is being put into practice, whether it fits with existing EU regulations, and its use of untested concepts (such as “core platform services”, which Turkey also seeks to place extensive restrictions on).

Moreover, the broad language on interoperability found in the Turkish draft amendment lacks the safeguards found in the DMA. Forcing data sharing poses risks to user privacy and security, and can compromise tools that combat spam and scams. Limiting how data is used across different services could also significantly reduce the value that digital platforms offer to the Turkish market and consumers.

Conclusion

Turkey risks stifling tech innovation and harming its own digital ecosystem by copying the EU’s approach to digital markets. Instead of following the ‘Brussels effect’ blindly, lawmakers in Turkey, South Korea, and other jurisdictions around the world should adopt a more cautious approach and first assess the real-life effects of the DMA and other EU regulations, before replicating them. Each jurisdiction should craft regulations suited to their own economies – promoting competition without repeating Europe’s mistakes.