Technology Undertaking Exemption Revisited: Recent Amendments Redefine Tech Merger Notifications In Turkey

When the Turkish Competition Authority ("TCA") reformed CommuniquéNo.2010/4 in 2022, it sought to ensure that the rapidly evolving digital economy did not fall outside merger control. The amended rules defined technology undertakings as undertakings active in areas such as digital platforms, software (including gaming software), financial technologies, biotechnology, pharmacology, agricultural chemicals and health technologies. Transactions involving these undertakings were exempt from the standard local turnover threshold: no individual Turkish turnover requirement applied if either the parties' combined Turkish turnover exceeded or the acquirer's worldwide turnover exceeded the threshold. The exemption used to capture technology undertakings operating in the Turkish market, conducting R&D in Turkey or providing services to Turkish users. By removing the local threshold, the regime ensured that acquisitions of low‑turnover but high‑potential digital start‑ups would still be notifiable, aligning Turkish practice with international efforts to catch so‑called "killer acquisitions".

The TCA amended its Communique on Mergers on11February2026 by increasing the thresholds, revising the notification form and revisited the technology undertaking exemption¹. The 2026 reform retains the definition of technology undertakings, but introduces two significant revisions that appear to materially recalibrate the system. First, technology undertakings are now subject to a specific Turkish turnover threshold: the target must meet a minimum threshold of TRY 250 million. Second, the territorial nexus has changed: the special regime applies only to technology undertakings "established in Türkiye". These two modifications (the introduction of a dedicated turnover threshold and the redefinition of the local nexus) are likely to fundamentally reshape the notification landscape for technology transactions. This article examines how these changes are likely to affect merger notifications involving technology undertakings in Türkiye and assesses whether the reform may signal a shift from an expansive, effects-based approach towards a more territorially anchored regime.

2022 Reforms: Technology Undertakings Was Defined For The First Time

The 2022 reform established a brand-new concept: technology undertaking. This reform and definition did not emerge in isolation. At the time, competition authorities worldwide were grappling with a structural challenge: in digital and innovation-driven markets, turnover figures often fail to reflect the strategic or competitive significance of a target. Start-ups with limited current revenues may nevertheless possess valuable data assets, network effects, or innovation pipelines capable of reshaping markets. The TCA expressly justified the introduction of the technology-undertakings regime by referring to this concern, noting that traditional turnover-based thresholds might not adequately capture acquisitions of competitively significant digital undertakings. As we previously observed in our 2022 analysis of the reform², the objective was to prevent structurally important transactions from escaping review merely because the target's financial indicators did not yet mirror its competitive potential. In this sense, the Turkish amendment formed part of a broader international debate on the adequacy of turnover-based jurisdictional thresholds in digital markets.

The notifiability assessment of the technology undertaking has two distinct aspects. First, there is a operational limb: undertakings operating in digital platforms, software (including gaming software), financial technologies, biotechnology, pharmacology, agricultural chemicals and health technologies are classified as technology undertakings.

Second, with respect to the mandatory notification of transactions involving such undertakings irrespective of their turnover (considering the buyer exceeds the threshold), there is a separate local nexus requirement. This local nexus was defined as undertakings operating in the Turkish market, conducting R&D in Turkey or providing services to Turkish users.

2022 Regime in Practice: The Board's Expansive Interpretation of the Territorial Nexus Requirement

In practice, the Board had adopted a markedly expansive approach when determining whether an undertaking operated in Türkiye or supplied services for customers in Türkiye for the purposes of merger control. The Board's case law demonstrates that the decisive element was whether the undertaking's products or services reached the Turkish market in a commercially meaningful way.

In Board's Google/Mandiant³ decision, the target did not have a Turkish subsidiary and maintained only a liaison office without commercial activity. All Turkish sales were conducted through distributors. Despite the absence of direct commercial operations in Türkiye, the Board considered that the undertaking operated in the Turkish market. The existence of a non-commercial representative office combined with distributor sales was deemed sufficient to establish the necessary nexus. Similarly, in Covetrus⁴ and Heska⁵ decisions, the undertakings had no local entity, no branch, no marketing organisation and no direct sales presence in Türkiye. Their activities consisted solely of import sales through independent distributors. Nevertheless, the Board explicitly characterised these import transactions as constituting activity in the Turkish geographic market. The same reasoning can be observed in Apollo Endosurgery⁶ decision, where medical devices were marketed exclusively through an independent distributor, and in Catalent⁷ decision, where products were invoiced to foreign customers but shipped directly into Türkiye. In both instances, the absence of a local corporate structure did not prevent the Board from asserting jurisdiction.

This line of decisions confirm that, under the 2022 reform, the Board effectively relied on a functional and effects-based understanding of territoriality. Supplying goods or services into Türkiye (whether digitally, via importation, or through distribution networks) was sufficient to establish that an undertaking operated in the Turkish market. The concept of "activity in Türkiye" had thus evolved beyond a traditional physical-presence test, in line with the local nexus used to be set as operating in the Turkish market, conducting R&D in Turkey or providing services to Turkish users.

Critically, the Bam Digital⁸ decision brings the interpretation of the local nexus criterion a step further. The TCA held that, although the data centres of the joint venture under review were still under construction in India and no actual or planned operations existed in Türkiye or India, the local nexus requirement was nonetheless deemed satisfied. This approach suggests that potential sales to Türkiye may satisfy the local nexus.

On top of these, there are decisions where the TCA adopted even a broader interpretation of the local nexus requirement in terms of having operations in Türkiye; even in circumstances where the undertaking is incorporated in Türkiye and has operations in the field of technology undertakings globally but does not carry out such activities in Türkiye, the TCA considered the transactions involving these undertakings as transactions that involve technology undertakings. In Berkshire/Alleghany⁹ decision, although the group was globally active in financial technologies, a significant portion of its Turkish turnover derived from non-technology activities. Nonetheless, the Board assessed the transaction within the technology-undertakings framework, focusing on the global technological character of the business rather than on the relative weight of the technology segment in Türkiye. Additionally, in Pharmalex¹⁰ decision, while PharmaLex operates globally across various segments of the life sciences and regulatory services landscape, its activities in Türkiye are limited to pharmacovigilance services, i.e. the monitoring, assessment and reporting of adverse reactions related to marketed medicinal products. Despite this limited operational footprint, the local nexus criterion was deemed to be met. The Board's approach suggests that the mere fact of operating in the Turkish market may satisfy the local nexus requirement, regardless of whether the relevant activities fall within the defined scope of a technology undertaking.

Not only was the territorial nexus interpreted broadly, but the substantive notion of "technology undertaking" was also applied in an expansive manner. In Cinven/International Financial Group¹¹, the target's principal activity concerned life insurance and investment products. However, the existence of a limited digital platform serving approximately 230 Turkish users was considered sufficient to bring the undertaking within the definition of a technology undertaking. This decision illustrates the Board's willingness to treat even marginal digital engagement as satisfying the statutory definition. In Astorg/Corden Pharma¹², the Board clarified that the concept of technology undertaking was not confined to software or platform businesses. The production and supply of active pharmaceutical ingredients were assessed under the "pharmacology" limb of the definition. Likewise, in Apollo Endosurgery and Heska, activities in medical devices and veterinary diagnostics were examined under the health-technologies and biotechnology categories.

Taken together, these decisions demonstrate that the Board interpreted the 2022 regime in a structurally broad manner, both territorially and substantively. Even limited digital presence, indirect distribution, potential sales to Türkiye, or technology-related operations globally combined with any in Türkiye were sufficient to trigger the special regime. This was the prevailing practice until the 2026 amendments.

2026 Reforms: Amended Turnover Thresholds and Technology Undertakings Exception

CommuniquéNo.2026/2, which entered into force on11February2026, represents the most significant overhaul of Turkey's merger control regime since 2022. It raises the general turnover thresholds considerably; transactions are now notifiable if the aggregate Turkish turnover of the parties exceedsTRY3billion (approx. USD 76 million and EUR 67 million) and at least two parties each have Turkish turnover exceedingTRY1billion (approx. USD 25,3 million and EUR 22,4 million), or if one party's Turkish turnover exceedsTRY1billion and another's worldwide turnover exceedsTRY9billion (approx. USD 228 million and EUR 201,3 million). More importantly for technology companies, the special exemption introduced in2022 has been revised in two respects:

• Minimum turnover requirement: The 2026 amendments abolish the blanket exemption and instead apply a TRY250million (approx. USD 6,3 million and EUR 5,6 million) threshold to the target undertaking. In transactions where at least one party is a technology undertaking established in Turkey, the general TRY1billion turnover threshold for target undertakings is replaced by TRY250million.
• Restriction to undertakings established in Turkey: The previous regime captured technology undertakings if they operated in the Turkish market, conducted R&D or served Turkish users. The 2026 Communiqué has left the previous local nexus of operating in the Turkish market, conducting R&D in Turkey or providing services to Turkish users and limited the local nexus by requiring that the technology undertaking be established in Türkiye. The threshold only if it is "established in Türkiye" signs a change in the scope of technology undertaking. Though it is not clear yet how the TCA would interpret "established in Turkey", this suggests that technology undertakings which merely serve Turkish users or conduct R&D in Turkey may no longer fall within the scope of the exception.

Practical Implications of the New "Technology Undertakings Rule"

The new requirement that the undertaking be "established in Türkiye," combined with the reintroduction of a minimum TRY 250 million Turkish turnover threshold for the target, creates a dual filter:

• First, the introduction of a quantitative threshold excludes early-stage or low-turnover technology undertakings that have not yet achieved a material commercial footprint in Türkiye. Under the previous regime, even relatively small digital or pharmaceutical undertakings could trigger notification solely by virtue of their field of activity.

• Second, the establishment criterion is an explicit shift that technology undertakings which merely serve Turkish users or conduct R&D in Turkey may no longer fall within the scope of the exception. However, there is still the possibility that the TCA may broadly interpret the establishment criterion covering undertakings beyond the ones of having a physical presence in Turkey. On the other hand, if interpreted as requiring a registered entity, branch, or comparable physical presence, this would mean a significant restriction of the scope of technology undertaking.

In this sense, the 2026 amendments may reduce the breadth that had gradually emerged through case law. While the 2022 reform sought to prevent potential killer acquisitions and ensure scrutiny of strategically important technology transactions, the 2026 changes suggest a renewed emphasis on economic materiality and territorial anchoring.

The Communiqué does not define what constitutes "established in Türkiye". It is expected that the term will be interpreted by reference to a physical presence, such as a registered entity, branch or place of business in Turkey. As the previous formulation was interpreted expansively to include undertakings that provided services to Turkish users, the new criterion appears to represent a deliberate choice which allows interpretations that narrows the scope. Whether digital platforms without a Turkish corporate entity but systematically targeting Turkish consumers can be considered "established" remains to be clarified through guidelines and Board decisions. Similarly, whether a formal incorporation would be required, or more functionally, would incorporating sustained economic engagement directed at the Turkish market be sufficient, remains to be seen.

However, when read against prior practice, the reform may signal a shift from an expansive effects-based jurisdictional approach towards a more structurally confined application of the technology-undertakings exception.

Continued Policy Emphasis on High‑Tech Acquisitions

Despite narrowing the exemption, the TCA maintains that technology undertakings still merit special scrutiny. The amended rules ensure that transactions involving technology undertakings with a meaningful commercial presence in Turkey remain subject to merger control, albeit with a lower threshold than other industries. The new regime preserves a lower threshold for technology undertakings compared to the general rules, but the turnover criterion is no longer entirely waived. This means that substantial acquisitions of domestic digital or biotech undertakings will still be reviewed, aligning with the policy goal of preventing anticompetitive consolidation in dynamic markets.

Compliance Tips and Outlook

Companies considering M&A transactions involving technology undertakings should reassess whether the new thresholds apply. Key points include:

• Determine establishment in Turkey: Parties must evaluate whether the target has a corporate presence or other legal establishment in Turkey. Where there is ambiguity, for example, digital platforms serving Turkish users through cross‑border supply, legal advice should be sought until the TCA provides guidance.
• Monitor turnover carefully: For transactions involving a technology undertaking established in Turkey, the target's Turkish turnover must be assessed against the TRY250million threshold. If the target falls below this threshold, no notification is required under the technology regime, though the parties must still consider whether the general thresholds capture the transaction.
• Watch for further guidance: The TCA is expected to issue guidelines or decisions clarifying the meaning of "established in Türkiye" and how the new regime applies to cross‑border technology services. Board decisions and secondary legislation should be monitored in the upcoming days for any updates.

In conclusion, the 2026 amendments re‑calibrate Türkiye's approach to technology mergers by narrowing the exception introduced in 2022. While the threshold and establishment requirement seek to concentrate regulatory oversight on transactions with a stronger domestic nexus, they may also create grey areas for cross‑border digital businesses.

Footnotes

1. Please see: Bora İkiler, Zeynep Şengören Özcan, Cansu Peker,The Turkish Competition Authority revises the merger control thresholds and refines technology-sector notification rules across all industries,11 February 2026,e-Competitions Preview, Art. N° 131707.

2. Zeynep Şengören Özcan, Ramiz Arslan, 2022, "Navigating In Fog: Ambiguous Technology Firm Concept Under The New Turkish Merger Control Regime" https://www.mondaq.com/turkey/corporate-and-company-law/1240354/navigating-in-fog-ambiguous-technology-firm-concept-under-the-new-turkish-merger-control-regime, Date Accessed: 13.02.2026

3. Board Decision dated 09.06.2022 and numbered 22-26/425-174.

4. Board Decision dated 07.07.2022 and numbered 22-32/512-209.

5. Board Decision dated 18.05.2023 and numbered 23-23/428-143.

6. Board Decision dated 16.02.2023 and numbered 23-09/138-40.

7. Board Decision dated 03.05.2024 and numbered 24-21/477-202.

8. Board Decision dated 5.10.2023 and numbered 23-47/885-312.

9. Board Decision dated 15.09.2022 and numbered 22-42/625-261.

10. Board Decision dated 23.11.2022 and numbered 22-52/775-319.

11. Board Decision dated 18.05.2022 and numbered 22-23/372-157.

12. Board Decision dated 02.06.2022 and numbered 22-25/398-164.

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