From Traditional MFNs to MFN-Type Arrangements: The Turkish Competition Authority’s Effects-Based Approach

Introduction

Most-favoured-customer/most-favoured-nation clauses (“MFN clauses”) are contractual mechanisms through which a supplier undertakes not to offer the counterparty less favourable terms than those offered to another customer.1 In competition law literature, MFN clauses are generally classified as either narrow or broad, depending on the sales channels covered. A narrow MFN ensures that the terms offered to the contractual counterparty are no less favourable than those offered through the supplier’s own website or physical store, whereas a broad MFN extends this protection to all sales channels.2

MFN clauses may generate both pro and anti-competitive effects. They may protect brand investments, prevent free-riding, incentivise relationship-specific investments, reduce transaction costs and mitigate demand uncertainty. Accordingly, the mere inclusion or implementation of an MFN clause in a vertical agreement is not regarded as a restriction of competition by object. However, MFNs may also create price rigidity, facilitate coordination, raise barriers to entry and foreclose competitors, particularly where the beneficiary has significant market power. This may be especially relevant for new entrants, which often rely on lower prices to attract customers. Nevertheless, such concerns may not materialise where the upstream market is sufficiently competitive and viable alternatives are available.

This approach is reflected in the Turkish Competition Authority’s (“TCA”) recent decisions both under Articles 4 (general prohibited acts) and Article 6 (abuse of dominant position) of Act No. 4054 on the Protection of Competition (“Act No. 4054”). The Vertical Guidelines recognise that MFN clauses may produce different competitive outcomes depending on market structure, the parties’ market positions, the purpose of the clause and its specific characteristics. Agreements containing MFNs may benefit from the block exemption where the beneficiary’s market share does not exceed 30% and the other conditions of Communiqué No. 2002/2 are satisfied. The recent decisions discussed below nevertheless demonstrate that the TCA increasingly focuses on the economic effects of an arrangement rather than its formal contractual characterisation.

TEMU Decision3: An MFN-Type Mechanism Without a Traditional MFN Clause

The TCA’s decision concerning TEMU is particularly significant because it demonstrates that MFN-type concerns may arise even in the absence of a conventional MFN clause. In this case, TEMU applied mechanisms known as “New Product Boost” and “Traffic Boost”, under which sellers’ products could receive reduced traffic and visibility where they did not comply with TEMU’s “recommended base price”. Some sellers reported that their products had consequently become almost invisible on the platform. Although TEMU argued that these mechanisms were not sanctions but opportunities for increased traffic for sellers complying with the recommended price, the TCA found that they effectively operated as a price discipline mechanism, incentivising sellers to comply with the recommended price level.

The TCA nevertheless recognised that the mechanism differed from a traditional MFN. The recommended price was not directly linked to a price charged on a competing platform, reference links were optional, and the price could be determined by considering various factors, including prices of identical or similar products, publicly available market data, product characteristics, quality, logistics, consumer feedback and after-sales support.

Despite these differences, the TCA considered that the mechanism could converge towards an MFN in terms of its effects. Traffic restrictions or boosts could reduce sellers’ incentives to offer lower prices on competing platforms and thereby restrict inter-platform price competition. The mechanism could therefore raise concerns under Article 4 of Act No. 4054.

The TCA ultimately concluded, however, that anti-competitive effects would not arise under the circumstances of the case due to TEMU’s position as the fifth-largest player and the availability of strong alternative platforms. The decision therefore illustrates the distinction between potential competitive concerns and actual competitive harm.

ETS Tur Decision4: Assessment of Narrow and Broad MFNs Collectively

The TCA’s decision concerning ETS Tur provides a more conventional example of MFN clauses. The TCA identified both broad and narrow MFNs in agreements between ETS Tur and hotels. The TCA reiterated that the inclusion and implementation of an MFN clause in a vertical agreement does not constitute a restriction of competition by object. Nevertheless, MFNs may create price rigidity, facilitate coordination, raise barriers to entry and foreclose competitors, with such effects being more likely where the beneficiary possesses market power.

The TCA particularly emphasised that MFNs may restrict hotels’ ability to offer more favourable prices through their own sales channels, thereby limiting price differentiation between channels. This may weaken the competitive pressure exerted by direct sales channels and competing platforms, particularly where the beneficiary has a strong market position.

Considering the presence of both broad and narrow MFNs, together with the other allegations examined in the case, the TCA concluded that the clauses should be assessed under Article 4 of Act No. 4054. The decision demonstrates that the distinction between narrow and broad MFNs is relevant but not determinative: the ultimate assessment depends on the effects of the clause on competitive conditions in the relevant market.

Yemeksepeti Decision5: The Foreclosure Risks of Narrow MFNs

The TCA’s decision concerning Yemeksepeti provides a detailed assessment of the competitive effects of narrow MFNs. The TCA characterised the clauses in agreements between Yemeksepeti and restaurants as vertical restraints requiring restaurants to offer on Yemeksepeti the same prices and non-price conditions available through their own channels. Such clauses could reduce restaurants’ incentives to offer more favourable terms through their own channels and thereby limit consumers’ access to lower-priced products and services.

Importantly, the restriction extended beyond prices to menu content, promotions, delivery areas and other terms. The TCA therefore considered that the potential harm could affect not only price competition but also consumer choice and other non-price dimensions of competition.

The TCA further considered that narrow MFNs could hinder restaurants from developing their own sales channels and customer bases, increase their dependence on Yemeksepeti and disadvantage competing platforms by limiting their ability to replicate discounts offered through restaurants’ own channels. Accordingly, narrow MFNs could create barriers to entry and expansion.

The TCA also examined price competition. Restaurants paying commissions to Yemeksepeti would ordinarily have an incentive to offer lower prices through their own channels. Narrow MFNs could prevent restaurants from passing these cost savings on to consumers, thereby reducing price competition and contributing to price rigidity.

Although Yemeksepeti was not considered dominant, the TCA considered its position as market leader, its high brand recognition resulting from its first-mover advantage and the fact that it was not a platform that restaurants could readily dispense with. It also considered that the application of similar conditions by Yemeksepeti, Trendyol Go and Getir Yemek could cumulatively increase the anti-competitive effects.

Consequently, the TCA concluded that the agreements containing MFN clauses could not benefit from the block exemption under Communiqué No. 2002/2 and that the conditions for individual exemption under Article 5 of Act No. 4054 were not satisfied. The TCA therefore did not consider the removal of the narrow MFN commitment appropriate and allowed the commitment to remain in place for an additional two years.

Conclusion and Assessment

The TCA’s recent decisions indicate a nuanced and increasingly effects-based approach to MFN clauses. Rather than treating the formal designation or contractual structure of a mechanism as determinative, the TCA appears to focus on whether the arrangement, in practice, limits the ability or incentives of suppliers to offer more favourable terms through alternative channels. The TCA’s assessment therefore depends on the specific characteristics of the arrangement and, critically, on the competitive conditions in the relevant market.

A common theme across these decisions is therefore the importance attributed to the actual competitive significance of the mechanism. The TCA has recognised that MFNs may weaken price competition, reduce incentives to develop alternative sales channels, increase barriers to entry and expansion, and facilitate coordination. These risks become more pronounced where the beneficiary has substantial market power or where several significant platforms employ similar restrictions. Conversely, as illustrated by TEMU, the existence of a mechanism capable of producing MFN-type effects does not necessarily establish an infringement where the undertaking lacks a sufficiently strong market position and effective alternatives remain available to market participants. The distinction between narrow and broad MFNs consequently remains relevant, but it is not decisive.

Taken together, the recent case law suggests that the TCA is moving towards a substance-over-form approach to MFNs, capable of capturing not only expressly drafted MFN clauses but also contractual or platform mechanisms that may generate comparable competitive effects. For businesses operating digital platforms and other multi-channel markets, this approach underscores the importance of assessing MFN-type arrangements not merely by reference to their contractual wording, but by considering their practical impact on suppliers’ incentives, alternative distribution channels, price and non-price competition, and the availability of viable alternatives. The TCA’s recent decisions thus suggest that the central question is increasingly not whether an arrangement is formally an MFN, but whether and to what extent it constrains competition in the market in which it operates.

• 1WHISH, R. and D. BAILEY (2015), Competition Law, Eighth Edition, Oxford University Press, Oxford, s.668.
• 2TCA Report on E-Marketplace Platforms Sector Analysis (2021), p.210 -213.
• 3TCA Decision dated 26.02.2026 and numbered 26-07/197-71.
• 4TCA Decision dated 08.01.2026 and numbered 26-01/23-14.
• 5TCA Decision dated 27.11.2025 and numbered 25-44/1086-615.