Turkey’s top court upheld a law tightening regulation on e-commerce companies in a blow to Trendyol, the market-leading local unit of Chinese giant Alibaba Group Holding Ltd.
(Bloomberg) — Turkey’s top court upheld a law tightening regulation on e-commerce companies in a blow to Trendyol, the market-leading local unit of Chinese giant Alibaba Group Holding Ltd.
The Constitutional Court said on Thursday that the law, which restricts companies’ advertising spending and use of customer data if their sales exceed given thresholds, was in line with the constitution, rejecting an objection by the main opposition party.
The ruling should help smaller e-commerce firms to compete after rapid growth of the market since the pandemic. Turkey’s total e-commerce volume rose 109% last year to over 800 billion liras ($30.5 billion), with almost a fifth of all shopping done online, Trade Ministry data show.
It was during the the pandemic in 2020 that Trendyol started to tower above its peers, according to a 2022 report by the national antitrust board. “The giant global player is investing to penetrate the market,” it said, citing “significantly high” advertising spending. Trendyol “leads the market by far,” it added, without providing figures.
Parliament approved the e-commerce law following the antitrust report. Its measures include:
- Restrictions on the use of customer information by companies with annual sales over 10 billion liras ($382 million)
- Restrictions on advertising spending by those with sales over 30 billion liras
- An annual license fee that rises in proportion to sales
Trendyol, which has about 30 million customers and about 250,000 sellers on its platform, declined to comment on the court ruling when contacted by Bloomberg.
Other Turkish e-commerce players include CicekSepeti, N11, Morhipo and the Nasdaq-listed Hepsiburada. San Jose, California-based eBay Inc. ended its Turkish operations last year, citing “the ongoing competitive dynamics in the market.”
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