What Does “Established In Türkiye” Mean? The TCA’s Latest Decisions Under The Revised Technology Undertakings Rule

What Does “Established in Türkiye” Mean? The TCA’s Latest Decisions Under the Revised Technology Undertakings Rule

On 11 February 2026, the Turkish Competition Authority (“TCA”) amended Communiqué No. 2010/4 through Communiqué No. 2026/2, restricting the special notification rule for technology undertakings to those "established in Türkiye" and introducing a TRY 250 million Turkish turnover threshold for the target. The definition of a technology undertaking itself remained unchanged.

Under the previous framework, the rule captured technology undertakings with a relatively loose territorial nexus to Türkiye, including those merely supplying services to Turkish users without any corporate presence. The shift to an establishment requirement therefore suggested that a stronger connection would be needed, but neither the amending communiqué nor the TCA's accompanying announcement defines what "established in Türkiye" means.

Against this background, this article examines the TCA’s latest decisions of the establishment requirement in its recent Coursera/Udemy and Lone Star/Lonza CHI decisions. Read together, the decisions suggest that a target’s status as a technology undertaking may be determined by reference to its global activities, while the establishment requirement may be supported by a Turkish corporate presence that does not itself perform the qualifying technology activity. The article compares this approach with the TCA’s pre-amendment reasoning in Berkshire/Alleghany and considers the unresolved question of whether activity directed at Türkiye may be sufficient where the target has no subsidiary or other corporate presence in the country.

From the 2022 Nexus Test to the 2026 Establishment Requirement

Türkiye’s special merger control regime for technology undertakings was introduced by Communiqué No. 2022/2¹. The amendment defined technology undertakings as undertakings or related assets operating in the fields of digital platforms, software and gaming software, financial technologies, biotechnology, pharmacology, agricultural chemicals and health technologies. The special regime applied where such an undertaking operated in the Turkish geographical market, conducted research and development activities in Türkiye, or provided services to users located in Türkiye.

The resulting framework was broad in territorial reach. Because the provision did not require the technology undertaking to be incorporated in Türkiye or to maintain any physical presence in the country, supplying products or services to the Turkish market including through cross-border channels or independent distributors could suffice to bring a transaction within the special regime. Equally significant was the absence of a Turkish turnover threshold for the target: acquisitions of technology undertakings with limited or even negligible Turkish turnover could require notification provided that the relevant threshold on the purchaser’s side was met.

The breadth of the former framework was illustrated by a series of TCA decisions. In Cinven/IFGL, the TCA classified the target as a technology undertaking on the basis that it offered life insurance packages through a digital platform to approximately 230 registered users in Türkiye, notwithstanding that the target's core business was insurance and its digital platform activity was negligible in scale². In Sartorius/Sartonet, the TCA treated a Turkish distributor that merely resold health technology products manufactured abroad as a technology undertaking, even though the distributor did not itself develop or manufacture any technology product³.

Communiqué No. 2026/2, which entered into force on 11 February 2026, changed both elements of this framework⁴. It retained the existing definition of a technology undertaking but restricted the special rule to those "established in Türkiye." It also introduced a quantitative filter: in acquisitions of such undertakings, the TRY 1 billion Turkish turnover thresholds ordinarily applicable to the target under Article 7(1) are reduced to TRY 250 million. The general notification thresholds were also increased substantially⁵.

The quantitative filter is relatively straightforward in application. The territorial element, however, raises an interpretive question. Neither the amending communiqué nor the TCA's accompanying announcement offers a definition of "established in Türkiye." It is therefore unclear whether establishment presupposes a Turkish-incorporated entity, branch or comparable registered presence, or whether sustained commercial activity directed at Türkiye without a local corporate vehicle may suffice.

A related question is whether the Turkish establishment must itself carry out activities in one of the listed technology sectors, or whether it is enough that the undertaking operates in a qualifying field globally while maintaining a local presence for other purposes. The TCA's decision in Lone Star/Lonza CHI is significant because it indicates how the authority approaches this distinction.

The Pre-Amendment Baseline: Berkshire and the Separation of the Two Tests

Before the 2026 amendment, the TCA's approach to the territorial limb of the technology undertaking exception was illustrated by its decision in Berkshire/Alleghany⁶. The decision suggested that two distinct questions had to be answered: first, whether the target qualified as a technology undertaking and, second, whether it had the requisite connection with Türkiye. The activities relied upon to satisfy these two tests did not have to coincide.

The transaction concerned Berkshire Hathaway Inc.’s acquisition of sole control over Alleghany Corporation. In determining whether Alleghany qualified as a technology undertaking, the TCA noted that Alleghany developed software for managing reinsurance companies’ systems and sold these products to third parties through its TIRS and DragonX business units. On that basis, the TCA concluded that Alleghany was active in financial technologies, one of the fields expressly covered by the definition of a technology undertaking.

The classification was therefore based on Alleghany’s activities at the global level. The TCA did not require Alleghany to develop, supply or market the relevant software products in Türkiye. Indeed, the decision indicated that the technology-related activities concerned were conducted outside Türkiye, with DragonX operating only in the United States.

The territorial nexus was assessed separately. The TCA considered the requirement of operating in the Turkish geographic market to be satisfied because Alleghany generated turnover in Türkiye. Significantly, part of that turnover was attributed to R.C. Tway Company, an Alleghany business active in the design, manufacture and servicing of specialised trailers, transportation equipment and mobile business solutions, activities that were not relied upon to classify Alleghany as a technology undertaking. Alleghany also had no subsidiary or affiliated company established in Türkiye.

The decision thus did not require a one-to-one correspondence between the target’s qualifying technology activities and its activities in Türkiye. In substance, the TCA’s analysis treated the two elements independently:

• the target’s status as a technology undertaking was established by reference to qualifying activities conducted anywhere in the world; while
• the target’s Turkish nexus could be established through a separate activity generating turnover in Türkiye, even if that activity did not itself fall within one of the specified technology fields.

Admittedly, the decision did not expressly formulate this as a general two-stage test. Nevertheless, the structure of its reasoning supported a broad interpretation of the former regime: an undertaking could fall within the special notification rule for technology undertakings if it carried out a listed technology activity somewhere in the world and had any meaningful commercial presence in Türkiye. The technology activity itself did not need to be directed at Türkiye, and the Turkish activity did not need to be technological.

This interpretation gave rise to the central question identified under the former framework: should the special notification rule apply where an undertaking conducts its technology activities abroad but is present in Türkiye only through activities that do not qualify as technology activities? Berkshire indicated that it should. In practical terms, the decision expanded the reach of the special rule by allowing the target’s technological character and its connection with Türkiye to be derived from different parts of its business.

The 2026 amendment therefore raised a central question: was the new establishment requirement intended to reverse the Berkshire approach, or merely to require a stronger corporate nexus with Türkiye?

Coursera/Udemy: When Establishment Is Beyond Doubt

In Udemy, the TCA reviewed Coursera, Inc.’s acquisition of sole control over Udemy, Inc. through Chess Merger Sub, Inc. The decision applied the revised technology undertakings rule⁷.

For present purposes, Coursera/Udemy presented no difficulty on this point. Udemy had a subsidiary established in Türkiye and that subsidiary itself carried out activities falling within the definition of a technology undertaking. The target’s technological character and its Turkish establishment therefore pointed in the same direction, leaving no real question as to whether the local presence had to perform the relevant technology activity.

Coursera/Udemy confirms the basic application of the revised rule: a target with a Turkish subsidiary that itself operates in a listed technology field is established in Türkiye. It does not, however, show how the TCA will approach a local entity whose functions are not themselves technological. That is where Lone Star/Lonza CHI becomes significant.

Lone Star/Lonza CHI: The Less Straightforward Case

Unlike Coursera/Udemy, Lone Star/Lonza CHI directly tests whether the Turkish presence must itself carry out the activities that make the target a technology undertaking. It is therefore the more relevant decision for interpreting the new establishment requirement.

The transaction concerned the acquisition by the Lone Star Funds of sole control over Lonza Group AG’s Capsules and Health Ingredients business, referred to in the decision as Lonza CHI. The TCA first determined that the transaction did not exceed either of the generally applicable notification thresholds under Article 7(1) of Communiqué No. 2010/4. Accordingly, the transaction would be notifiable only if Lonza CHI qualified as a technology undertaking established in Türkiye and its Turkish turnover exceeded the reduced TRY 250 million threshold⁸.

In assessing Lonza CHI’s technological character, the TCA referred to two aspects of its activities. Lonza CHI manufactures and supplies empty hard capsules used in the encapsulation of active pharmaceutical ingredients and provides development and manufacturing services to the pharmaceutical and nutraceutical sectors. On this basis, the TCA considered Lonza CHI to be active in pharmacology and therefore to fall within the definition of a technology undertaking.

The more significant part of the decision concerns the connection with Türkiye. Lonza CHI has a wholly owned Turkish subsidiary, Capsugel İlaç ve Sağlık Ürünleri Pazarlama Limited Şirketi (“CAPSUGEL”). According to the decision, Capsugel is primarily engaged in supplying empty hard capsules to the pharmaceutical and food supplement sectors and in the importation, marketing and wholesale of health ingredients⁹.

The decision does not indicate that Capsugel manufactures capsules, develops pharmaceutical products, provides development or manufacturing services, or conducts R&D in Türkiye. Although CAPSUGEL’s activities are commercially connected with the pharmaceutical sector, the activities expressly attributed to it are essentially importation, supply, marketing and wholesale functions. Nor did the TCA separately find that CAPSUGEL itself qualified as a technology undertaking operating in pharmacology.

Nevertheless, the TCA concluded that Lonza CHI “operates in the field of pharmacology in Türkiye” and is therefore a technology undertaking subject to the special notification rule. The reasoning does not explain how the TCA moved from the activities of CAPSUGEL to the conclusion that Lonza CHI carries out pharmacology activities in Türkiye. In particular, it does not examine whether the local subsidiary’s distribution-related activities independently fall within the concept of pharmacology or whether the existence of the subsidiary was sufficient, by itself, to establish Lonza CHI in Türkiye.

The structure of the reasoning therefore suggests that the TCA may be treating the two elements separately. Lonza CHI’s status as a technology undertaking appears to have been determined by reference to the activities of the business globally, while its establishment in Türkiye appears to have been inferred from the existence and activities of its wholly owned Turkish subsidiary. On this reading, the Turkish establishment does not itself need to perform the core activities on which the target’s classification as a technology undertaking is based.

Compared with Coursera/Udemy, Lone Star/Lonza CHI extends the analysis. In Coursera/Udemy, the Turkish subsidiary was itself active as a technology undertaking. In Lone Star/Lonza CHI, by contrast, the Turkish subsidiary was described only as carrying out importation, supply, marketing and wholesale functions; it was not found to conduct pharmacology, manufacturing, development or R&D activities. Nevertheless, the TCA treated the target as a technology undertaking established in Türkiye.

The reasoning in Lone Star/Lonza CHI, when considered alongside Berkshire/Alleghany, indicates that the TCA continues to separate the two elements of the test. The target may derive its technological character from qualifying activities conducted elsewhere in the world, while its establishment in Türkiye may be supported by a local corporate presence carrying out non-technology functions. In this respect, the central logic of Berkshire/Alleghany appears to remain applicable under the revised rule, at least where the foreign technology business has a subsidiary in Türkiye.

The two new decisions must nevertheless be read against their facts: both targets had subsidiaries in Türkiye. Neither decision required the TCA to determine whether a foreign technology undertaking with no Turkish subsidiary, branch or comparable corporate presence could still be regarded as established in Türkiye merely because it supplies products or services into the country. The wording used in Lone Star/Lonza CHI may point in that direction, but the factual boundary has not yet been tested.

What the Decisions Answer and What Remains Open

The two decisions answer one important question but leave another unresolved.

The Turkish entity does not appear to need to perform the qualifying technology activity itself. Coursera/Udemy involved no difficulty because the Turkish subsidiary was itself a technology undertaking. Lone Star/Lonza CHI extends the analysis by treating a target as established in Türkiye even though its Turkish subsidiary was described only as importing, supplying, marketing and wholesaling the products generated by the foreign pharmacology business.

The decisions therefore answer the question posed by the 2026 amendment: the new establishment requirement was not intended to reverse the Berkshire approach. Rather, it appears to have strengthened the form of the required nexus by introducing the concept of establishment, requiring at minimum a corporate presence in Türkiye, without displacing Berkshire/Alleghany’s separation of the technology and territorial limbs. The two-stage approach remains intact: the technology undertaking assessment may be based on activities carried out globally, while the Turkish nexus may arise from a separate local presence that is not itself engaged in the listed technology activity.

The remaining question is whether a local corporate presence is indispensable. Suppose that a foreign undertaking carries out pharmacology, software, biotechnology or another qualifying activity outside Türkiye and sells the resulting products or services directly to Turkish customers, or through an independent distributor, without maintaining any subsidiary or branch in Türkiye. Would that market-facing activity alone amount to being “established in Türkiye”?

The language used in Lone Star/Lonza CHI arguably supports an affirmative reading. By stating that LONZA CHI “operates in the field of pharmacology in Türkiye,” the TCA focused on the undertaking’s activity in the Turkish market rather than expressly treating incorporation as a separate legal requirement. This could indicate that sufficiently direct commercial activity in Türkiye is capable of satisfying the establishment condition.

The facts, however, do not permit a definitive conclusion. Both Coursera/Udemy and Lone Star/Lonza CHI involved targets with Turkish subsidiaries, and the TCA therefore did not need to decide whether direct cross-border sales or relationships with independent distributors would be sufficient in the absence of any local corporate vehicle.

Practical Implications and Outlook: A Narrower Rule, but Not Yet a Narrow Interpretation

The 2026 amendment has narrowed the special notification rule by introducing a TRY 250 million Turkish turnover threshold and replacing the former activity-based nexus with the requirement that the technology undertaking be “established in Türkiye.” The first two decisions under the revised wording nevertheless indicate that establishment should not be equated with the performance of the core technology activity by the target’s Turkish entity. Coursera/Udemy confirms the straightforward case; Lone Star/Lonza CHI shows that importation and sales functions may also be sufficient to support establishment.

For transaction parties, this has several practical consequences:

• The assessment should begin with the target’s global activities. Parties should examine whether any part of the target business operates in one of the broadly defined technology fields, even if those activities are conducted outside Türkiye.
• Any Turkish corporate presence should be examined closely. A subsidiary engaged only in importation, marketing, distribution or wholesale functions may support the conclusion that the target is established in Türkiye, even if that subsidiary does not itself manufacture, develop software, conduct R&D or otherwise perform the qualifying technology activity.
• The central Berkshire logic remains relevant. The technology classification and the Turkish nexus may be derived from different activities: global technology operations may satisfy the first limb, while a non-technology local presence may satisfy the second.
• Cases with no Turkish subsidiary remain uncertain. The wording in Lone Star/Lonza CHI may suggest that activity in Türkiye is sufficient, but neither of the two new decisions establishes that direct sales, remote services or an independent distributor alone meet the establishment condition.
• Potential Turkish notification requirements should be considered at an early stage. Where the target has qualifying global activities and any subsidiary, branch or comparable presence in Türkiye, the parties should assess the special threshold early and reflect a possible filing in the transaction timetable and conditions precedent.

The decisions therefore indicate continuity in the TCA’s analytical method. Coursera/Udemy confirms that establishment is readily satisfied where the Turkish subsidiary is itself a technology undertaking. Lone Star/Lonza CHI extends this by showing that the result is the same where the Turkish subsidiary merely imports and sells the products of a technology business conducted abroad. In both cases, the local activity need not itself fall within a listed technology field.

In that sense, Berkshire/Alleghany remains an important interpretive reference under the revised regime. What the amendment appears to have changed is the form of the Turkish nexus: whereas the former rule expressly captured undertakings merely serving Turkish users, the new decisions have so far involved targets with an actual Turkish subsidiary. Whether the same result would follow if the target had no Turkish subsidiary at all remains the principal unresolved question.

Until the TCA decides a case involving a foreign technology undertaking with Turkish sales but no local corporate presence, transaction parties should treat a Turkish subsidiary, regardless of whether it performs the core technology activity, as a strong indicator that the establishment requirement is met. Future decisions will determine whether commercial activity alone can produce the same result.

Footnotes

^{1 Communiqué No. 2022/2 Amending Communiqué No. 2010/4 Concerning the Mergers and Acquisitions Calling for the Authorisation of the Competition Board, published in the Official Gazette dated 4 March 2022 and numbered 31768, Article 1, available here}

^{2 Turkish Competition Board decision dated 18.05.2022, No. 22-23/372-157 available here.}

^{3 Turkish Competition Board decision dated 25.05.2023, No. 23-24/452-156, available here.}

^{4 Communiqué No. 2026/2 Amending Communiqué No. 2010/4 Concerning the Mergers and Acquisitions Calling for the Authorisation of the Competition Board, published in the Official Gazette dated 11 February 2026 and numbered 33165, available here}

^{5 Under the amended Article 7(1), a transaction is notifiable where: (i) the parties’ aggregate Turkish turnover exceeds TRY 3 billion and the Turkish turnover of at least two parties each exceeds TRY 1 billion; or (ii) in acquisitions, the Turkish turnover of the target exceeds TRY 1 billion and the worldwide turnover of at least one other party exceeds TRY 9 billion.}

^{6 Turkish Competition Authority, Berkshire Hathaway Inc./Alleghany Corporation, Decision No: 22-42/625-261, 15 September 2022, available here.}

^{7 Turkish Competition Authority, Udemy, Inc., Decision No. 26-17/508-182, 7 May 2026, available at https://www.rekabet.gov.tr/tr/SonKurulKarari/093d0563-2871-f111-93ed-0050568549fa.}

^{8  Turkish Competition Authority, Lone Star Funds/Lonza Group AG’s Capsules and Health Ingredients Business, Decision No. 26-21/635-254, 10 June 2026, paras. 1 and 7, available here.}

^{9 Ibid., para. 9.}

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