📅 Turkey’s Technology Ecosystem: 2023 in Review & 2024 Predictions

Turkey’s technology ecosystem faced significant challenges in 2023, including a devastating earthquake in February, national elections in May, and a subsequent shift in economic policy leadership. Compounded by a dire global funding climate, startup investments in Turkey declined to $698 million, a drop from the 2021 peak of $1.8 billion.

JANUARY: 🛒 The amended E-Commerce Law, effective from January 1, led to significant changes for Trendyol. Adjustments included reduced advertising, ceasing payment services, and a future requirement to separate private label operations.

FEBRUARY: 🌍 The devastating Kahramanmaras earthquakes caused significant loss and disrupted the regional economy. Startups with 2022 equity investments faced a new 10% ‘earthquake tax’ in May.

MARCH: 🚘 Turkey imposed a 40% additional tax on Chinese EVs.

APRIL: 📱 The new social media bill brought new obligations for platforms like Facebook, Instagram, TikTok, and Twitter.

MAY: ✉️ President Erdogan’s re-election led to shifts in economic policymaking, including rapid increases in the policy interest rate and removal of capital controls.

JUNE: ✒️Turkey joined the NATO Innovation Fund with a €45 million contribution.

JULY: 🪪An advertisement ban was imposed on Twitter for not appointing a local point of contact.

SEPTEMBER: 💵Alibaba unveiled a $2B investment plan for Turkey. Getir, Turkish quick commerce behemoth, raised $500M at a dramatically lowered $2.5B valuation, leading to exits from Italy, Spain, and Portugal.

OCTOBER: 🪙Digital wallet service providers like Apple Pay became subject to e-money licensing requirements under the new Central Bank regulations on payment services and electronic money, which came into effect after a three-quarter delay. Starlink’s license application in Turkey was unsuccessful.

NOVEMBER: 🔬The Central Bank’s low-credit investment support program targeted high-tech and green-tech investments.

DECEMBER: 🎵 TikTok addressed national security concerns at a parliamentary hearing. The Central Bank published its Digital Turkish Lira Project report.

Looking Ahead to 2024! A stable policy year is anticipated, with local elections in March not expected to cause significant changes.

There are five major bills on the legislative agenda, and we expect at least three of them to be legislated this year:

• An amendment to the Competition Bill (Law №4054), akin to the EU’s Digital Markets Act, introducing specific obligations for major digital platforms like Google, Facebook, Amazon, and Apple.
• A new Cryptocurrency Bill assigning regulatory oversight of crypto exchanges to the Capital Markets Board. We anticipate that exchange and custody operations will require distinct licensing, possibly obtainable by the same entities. Detailed regulation of DeFi is not expected.
• An amendment to the Personal Data Protection Law (KVKK) to ease cross-border data transfers and ensure alignment with the EU’s GDPR standards.
• A new Digital Copyrights Bill requiring digital platforms like Google to pay copyright fees to news outlets, mirroring regulations in Australia and Canada.
• A labor market regulation reform to support the efficient and stable growth of the gig economy. Also, the Ministry of Transport and Infrastructure is expected to soon introduce new regulations for e-commerce and quick commerce couriers, following a similar approach.