Category: Turkiye

The GDPR, which canceled previous European data protection regulations, represents the biggest change in those regulations in 20 years. Naturally, this amendment affects the methods of obtaining and processing personal data regardless of the size and structure of the companies doing so. All institutions in the transportation sector, including land, sea, air, and rail operators, agencies, airlines, and municipalities are also subject to the GDPR’s requirements.

Why is personal data being used in the transportation sector?

With the development of the Internet and especially the Internet of Things, the transportation sector has become modernized and “smarter” – and thus increasingly dependent on the personal data of its customers. Smart ticketing systems, marketing strategies, efforts to increase the profitability of companies by making faster and effective workflow planning, and new alternative transportation methods such as Uber and Lyft have significantly increased the use and sharing of personal data among companies, with names, surnames, contact information, addresses, travel habits, destination information, ranges that customers can afford to pay, travel hours, and even medical history being only some of the information which is processed within these “smart” systems.

In the transport sector, personal data is actively used: (i) in the establishment of smart ticketing and check-in systems in areas such as airports to increase efficient passenger flow; (ii) to improve efficiency in city planning systems and to allow for the development of autonomous traffic and transport systems and investment strategies in the field; and (iii) to improve the service sector by sharing data with 3rd party companies and organizations such as agencies and advertising companies.

In this context, the results of the processing of personal data in the transportation sector should be examined in two ways. Greater data allows companies to become more sophisticated, more efficient, and more profitable, while at the same time allowing those who use the transportation system to benefit from the sector in a faster, cheaper, and more personalized way. Companies can track customer transportation habits and locations with the personal data they process and offer them a smarter and more personalized service by highlighting useful content in online ticketing sites and applications.

GDPR compliance process of companies

Companies should act on the following issues to make their framework of compliance compatible with the GDPR: (i) review all contracts which the company has prepared and is a party to, including employee contracts, dealer contracts, and supplier contracts, and evenly distribute the risk within the scope of data security; (ii) prepare or update data and privacy policies and prepare clear consent texts specifying what personal data is being obtained for what purposes and from where, how it will be used, and whom it will be shared with; (iii) establish a data inventory system and determine how to store personal data, including geo-location information; (iv) take appropriate measures to ensure that personal data is stored in an encrypted and anonymous manner in all possible ways; (v) establish a process for use in personal data breaches; and (vi) provide in-house awareness trainings on data security.

Sanctions for non-compliance

Failing to comply with the GDPR will result in direct sanctions in Europe. Companies that do not comply with the law will face a penalty of EUR 20 million or 4% of their global turnover, whichever is higher.

As a demonstration of the seriousness of that threat, British Airways and its parent were fined GBP 183.39 million in 2018 for a data breach of 500,000 passengers. Also in 2018, Uber was fined EUR 400,000 by France due to a data breach that occurred in 2016 and affected 57 million users in total, and 1.6 million French citizens in particular.

Conclusion

With the Internet network covering the whole world and the transportation sector becoming “smarter,” the protection of personal data used in the sector has become a necessity. In order to avoid any sanctions, companies need to obtain and process personal data within a legal framework by enlightening people as transparently as possible about their compliance with the GDPR and taking the measures described above.

Since the successful completion of these compliance processes will increase the confidence and prestige of the company in the eyes of customers and increase their willingness to share their personal data, compliance with the GDPR will result in a much more profitable investment for companies in the long term.

By Nazli Sezer, Executive Partner, and Kaya Kayaoglu, Senior Attorney, Sezer & Utkaner

This Article was originally published in Issue 6.12 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Gide Loyrette Nouel has advised Groupama Holding Filiales et Participations on the sale and transfer of its 10% stake in Turkish insurance company Gunes Sigorta A.S. to TVF Finansal Yatirimlar Anonim Sirketi, a subsidiary of the Turkey Wealth Fund. Baker McKenzie advised TVF on the transaction, which closed on February 14, 2020.

According to Gide, “this transaction falls within the scope of an on-going global restructuring led by TWF aimed at consolidating pension/life and non-life insurance companies owned by Turkish state banks under a single umbrella.”

Gide Loyrette Nouel’s team was led by Partner Arpat Senocak and Associate Mehmet Kosoglu.

Baker McKenzie’s team was led by Partner Caner Elmas and Associate Sila Pinar.

Conflicts in the region and the ongoing political turbulence are increasing concerns in Turkey. “This is not good,” sighs Cerrahoglu Partner Sezin Dundar. “Our clients, especially foreign investment companies are closely monitoring the situation. This could affect the economy in the long run.”

The Turkish Government has recently increased taxes, Dundar reports, with the newly-adopted “Law 7194,” introducing a new digital service tax, accommodation tax, and property tax on high-value residences. “This has caused chaos,” she says. As a result of the outcry, she says, “the Government had to amend the law in terms of the property tax on high-value residences.”

Dundar reports that Turkey’s “11th Development Plan,” includes detailed information about the activities planned for 2019-2023. The plan identifies a number of projects, particularly in energy, mining, health, infrastructure, defense, law, and IT, which attract the attention of foreign investors. Blockchain-based digital central bank money will be implemented in line with the 11th Plan as well, facilitating foreign investment in that sector. In addition, she says, the Government plans to launch the “Channel Istanbul Project” — an artificial sea-level waterway connecting the Black Sea to the Sea of Marmara, and thus to the Aegean and Mediterranean seas. Unfortunately, Dundar says, although the project has great economic potential, it has gathered significant criticism from the public due to its perceived environmental hazard, and numerous lawsuits against the project are expected.

Despite significant recent deals, including the acquisition by Chinese investors of a 20% stake in Istanbul’s Yavuz Sultan Selim Bridge from Astaldi S.p.a. and ongoing activity in the real estate market, primarily from European, Middle Eastern, and African investors, Dundar reports that the ongoing recession is effecting the private sector, meaning that most major projects involve the State. Some sectors, she says, like construction, are suffering more than others. On the bright side, she says, the weak Turkish lira has led some foreign investors to resume investments they started years ago, but did not complete.

“In general, the Rule of Law and political stability are now the essential issues that need to be established in order for investors to be able to invest safely and freely in the Turkish market,” Dundar says. She’s optimistic, she says: “I still think though, concerning our population of around 80 million and reserves of natural resources and its dynamism, Turkey introduces a very serious growth potential for the foreign investors.”

Paskoy has advised Novartis on the sale of one of Sandoz Turkey’s manufacturing facilities to Turkish pharmaceutical company Generica Ilac.

The transaction includes the transfer of all associated assets and employees of Sandoz Turkey at the facility in Gebze, Turkey. The deal is expected to close by mid-2020 subject to the approval of regulatory authorities, including Turkey’s Competition Board, the Gebze Plastic Manufacturers Organized Industrial Zone, and the Ministry of Industry and Technology. After closing, Generica Ilac will continue to manufacture and supply certain products to Novartis.

Paksoy’s team included Partner Elvan Aziz, Counsel Nazli Bezirci and Associate Gozde Zorlu.

Paskoy did not reply to our inquiry on the matter.

White & Case has advised Mid Europa Partners on the merger of its portfolio company CMC Iletisim ve Cagri Merkezi Hizmetleri A.S. with Meritus Upravljanje d.o.o., part of M+ Group, in return for a 30% equity stake in the combined group.

M+ Group is a regional business process outsourcing service provider and is a subsidiary of Meritus Ulaganja d.d.

According to White & Case, “CMC is the largest independent outsourced call center and customer management services provider in Turkey, with more than 4,000 employees. Following completion of the transaction, M+ Group is expected to emerge as the leading regional contact center and business process outsourcing services provider in South Eastern Europe.”

White & Case’s team included London-based Partner Ken Barry and Associates Joe Bradley and Oliver Wilson and Istanbul-based Partner Emre Ozsar, Local Partner Ceren Sen, and Lawyers Tolga Tezel, Ege Gulec, and Caglar Senol.

White & Case did not provide additional information about counsel for the M+ Group.

Former Bezen & Partners Partner Ugur Sebzeci has become Chief Legal Officer at Ronesans Holding.

According to Bezen & Partners, Sebzeci has spent the past ten years with the firm, which he joined as a trainee, “advising and assisting Turkish and non-Turkish clients in M&A, corporate, commercial, competition and dispute resolution matters.”

Sebzeci was promoted to Partner at Bezen & Partners in January of last year, along with colleague Can Ozilhan (as reported by CEE Legal Matters on January 14, 2019). Ironically, Ozilhan has also just left the firm, to join the EBRD in London as Counsel.

Speaking of Sebzeci and Ozilhan, Managing Partner Serdar Bezen said: “It has been such a pleasure seeing Ugur and Can grow from interns ten years ago into partners of the firm. Their new roles attest to their extraordinary expertise. We are proud of their successes and we look forward to continuing to work with them at both clients in their new roles.“