Competition Race in AI Is Heating Up. Sector Inquiry Launched by the Turkish Competition Authority

Today, artificial intelligence is no longer merely a new field of technological development, but a tool that is rewriting the rules of competition, transforming market powers and radically affecting the economic balance. Rapid developments in productive AI, in particular, is creating a new competitive environment shaped around data, computing power and platform ecosystems. In this new environment, how competition is formed, how it is maintained and by whom it is determined are being redefined.

The Competition Board launched a comprehensive sector inquiry into the AI ecosystem in order to evaluate the effects of that transformation on the markets from an integrated perspective and to identify emerging competitive risks in a timely manner.

The AI value chain depends on a multi-layered and strategic structure extending from infrastructure to model building to applications. At the stage of building the main models of this chain, in particular, access to inputs such as data, computing capacity, technical expertise and funding plays a decisive role. Undertakings that can access these resources early and intensively can position themselves at multiple levels of the value chain, creating vertically integrated structures and thus quickly consolidating their market power. This has direct effects on the fundamental dynamics that shape the functioning of competition.

On the other hand, the general-purpose nature of the main models that are at the center of the AI value chain makes the dynamics concerned even more apparent. These models, which are trained on large datasets and which can be integrated into different areas of use, have become not merely technological components, but also critical elements that determine the direction of the ecosystem. In this context, the ability of undertakings that gain an early-mover advantage to further strengthen this superiority entails risks such as heightened barriers to entry, users becoming locked into certain ecosystems, and competitors facing difficulties in accessing essential inputs. Consequently, it is important to conduct an integrated examination into access conditions to essential inputs, relationships within the ecosystem and the effect of control over distribution channels on the market structure.

Integration of AI technologies with the existing products and services of large digital platforms, on the other hand, points to an even more critical issue for competition law. This integration can lay the groundwork for the emergence of conduct such as self-preferencing, exclusion, tying, access restrictions and increasing switching costs, thus affecting not only the current market structure but future competition and innovation dynamics.

Moreover, the merger and acquisition transactions recently reviewed by the Authority indicate that developments in the field of AI are becoming increasingly critical also from the perspective of merger control. In some transactions, AI technology is comprising the relevant market directly, while in others assessments need to take data advantages, complementarity, potential competition and protecting innovation into account.

The sector inquiry launched will analyze how the AI ecosystem is being shaped specifically around the main models, relationships between the different layers of the value chain, access conditions to critical inputs, interactions between large technology undertakings and innovators, and effects of data and computing power on competition.

The inquiry concerned is intended to ensure that structural trends and potential anti-competitive risks emerging in the field of AI are identified at an early stage, and to use the findings to be gathered in guiding the policy-making processes and the intervention tools for maintaining the competitive structure.

The Competition Authority is closely monitoring the transformation in the field of artificial intelligence and carefully scrutinizing the effects of this transformation on Türkiye's economy and the competitive balance.