Personal Data Protection Due Diligence in Turkish M&A Transactions

Introduction

Personal data protection due diligence has become an essential part of Turkish M&A transactions. In the past, buyers often focused mainly on corporate records, financial statements, tax liabilities, employment disputes, intellectual property, contracts, licenses, litigation, and regulatory permits. Today, however, data protection compliance is a separate and highly important risk area, especially where the target company operates in technology, e-commerce, healthcare, fintech, insurance, logistics, education, digital advertising, SaaS, mobile applications, artificial intelligence, retail, call center services, or any business model based on customer and employee data.

Turkey’s main personal data protection legislation is Law No. 6698 on the Protection of Personal Data, commonly known as KVKK. The law regulates the processing of personal data, imposes obligations on data controllers and processors, grants rights to data subjects, and provides administrative sanctions for non-compliance. KVKK applies to natural persons whose personal data is processed and to natural or legal persons processing personal data fully or partly by automated means, or by non-automated means forming part of a data filing system.

In an M&A transaction, a buyer does not merely acquire shares, assets, contracts, employees, licenses, or customer relationships. It may also inherit historical data protection risks. These risks may include unlawful customer databases, missing privacy notices, defective consent records, unregistered VERBIS obligations, unlawful biometric systems, excessive employee monitoring, old data breaches, weak cybersecurity, non-compliant marketing lists, unlawful cross-border transfers, or vendor contracts with no data protection clauses.

For this reason, personal data protection due diligence should be treated as a core legal workstream in Turkish mergers, acquisitions, asset transfers, share purchases, joint ventures, investment rounds, and corporate restructurings.

Why Data Protection Due Diligence Matters in Turkish M&A

Personal data can be a valuable business asset, but it can also be a liability. A target company may have millions of customers, a valuable CRM database, years of user behavior data, AI training datasets, patient records, payment records, marketing permissions, employee files, call center recordings, or platform analytics. These data may support future revenue, customer retention, product development, and market expansion.

However, if the data was collected or processed unlawfully, its commercial value may be limited or even dangerous. A buyer may discover after closing that the target cannot lawfully use its marketing database, cannot transfer data abroad to the buyer’s group systems, cannot prove explicit consent, has failed to notify past data breaches, or has been processing special categories of personal data without adequate safeguards.

Under KVKK, data controllers must comply with obligations such as informing data subjects, ensuring data security, registering with the Data Controllers’ Registry where required, responding to data subject requests, and notifying the Personal Data Protection Board in case of certain breaches. Administrative fines under Article 18 are updated annually, and the Turkish Personal Data Protection Authority states that these fines are adjusted based on the revaluation rate under Turkish law.

Therefore, in an M&A deal, privacy due diligence is not a secondary checklist item. It directly affects valuation, risk allocation, transaction structure, closing conditions, representations and warranties, indemnities, post-closing integration, and sometimes even the buyer’s decision to proceed.

Key Data Protection Questions in an M&A Transaction

A buyer should begin with several strategic questions. What personal data does the target process? Why does it process that data? What is the legal basis for each processing activity? Has the target informed data subjects properly? Does the target process special categories of personal data? Does it transfer data to third parties or abroad? Has it registered with VERBIS if required? Has it suffered data breaches? Does it have adequate cybersecurity measures? Are vendor contracts compliant? Can the buyer integrate the target’s data into its own systems after closing?

These questions should be answered before signing or, at the latest, before closing. If the target’s data is central to the deal value, the buyer should conduct a deeper review. This is especially true in transactions involving e-commerce companies, health-tech startups, AI platforms, fintech businesses, marketplaces, HR-tech companies, advertising agencies, call centers, SaaS providers, loyalty program operators, clinics, hospitals, insurance intermediaries, and companies with large consumer databases.

Data Mapping and Personal Data Inventory Review

The first step in personal data protection due diligence is data mapping. The buyer should request the target’s personal data processing inventory, data flow maps, privacy policies, internal data protection procedures, retention schedules, data transfer records, and vendor list.

A proper inventory should identify data subject groups, data categories, processing purposes, legal bases, recipients, foreign transfers, storage periods, and technical and organizational security measures. Under the By-Law on Data Controllers Registry, data controllers under registration obligation must prepare a personal data processing inventory, and VERBIS entries are prepared based on that inventory.

If the target does not have a data inventory, this is a significant red flag. Without an inventory, it is difficult to verify privacy notices, consent mechanisms, VERBIS records, retention periods, vendor transfers, data subject request procedures, or cross-border transfer compliance. A missing inventory may also indicate that the target’s data protection compliance program is superficial.

Privacy Notices and Obligation to Inform

A buyer should review whether the target has fulfilled its obligation to inform data subjects. This includes customer privacy notices, employee privacy notices, candidate notices, website privacy policies, cookie notices, CCTV notices, call center notices, patient notices, mobile application privacy notices, and platform user notices.

Under KVKK, data controllers must inform data subjects about the controller’s identity, processing purposes, transfer recipients, method and legal basis of collection, and data subject rights. Failure to fulfill this obligation may trigger administrative fine risk under Article 18.

In M&A due diligence, it is not enough to confirm that the target has a privacy policy on its website. The buyer must check whether the notice accurately reflects actual processing. A privacy notice that says nothing about foreign cloud systems, advertising cookies, call recordings, biometric access systems, AI tools, payment providers, or group company transfers may be insufficient if those activities exist in practice.

Explicit Consent and Marketing Databases

Consent records are often critical in transactions involving customer databases, marketing lists, mobile applications, loyalty programs, advertising platforms, or digital services. The buyer should ask how the target obtained explicit consent, what wording was used, when consent was collected, whether consent was bundled with terms and conditions, whether withdrawal mechanisms exist, and whether consent logs are reliable.

This issue is especially important where the value of the transaction depends on marketing access to customers. If the target cannot prove valid marketing permissions, the buyer may not be able to lawfully use the customer database for promotional campaigns after closing.

The buyer should also distinguish between KVKK explicit consent and commercial electronic message permissions. A customer may have purchased a product, but this does not automatically mean that the company may send promotional SMS, email, or calls. Marketing consent systems, opt-out records, İYS-related records where applicable, CRM permissions, and campaign histories should be reviewed together.

VERBIS Registration Due Diligence

VERBIS is the Data Controllers’ Registry Information System. Under Article 16 of KVKK, natural or legal persons processing personal data must register with the Data Controllers’ Registry before starting data processing unless an exemption applies. Registry applications include information such as controller identity, processing purposes, data subject groups, data categories, recipient groups, data envisaged to be transferred abroad, security measures, and maximum storage periods.

The By-Law states that data controllers not established in Türkiye must register through their representatives before starting data processing, and that registry information must be complete, accurate, up-to-date, and lawful. It also states that registration does not remove other obligations under KVKK.

In M&A due diligence, the buyer should determine whether the target was required to register with VERBIS, whether it registered on time, whether its entries are accurate, and whether its entries match the actual data inventory. Inaccurate VERBIS entries may reveal deeper compliance problems. For example, if the target uses foreign cloud providers but VERBIS does not disclose data envisaged to be transferred abroad, the buyer should investigate further.

Data Security and Cybersecurity Due Diligence

Data security is one of the highest-risk areas in Turkish privacy law. Article 12 of KVKK requires data controllers to take all necessary technical and organizational measures to provide an appropriate level of security, prevent unlawful processing, prevent unlawful access, and ensure protection of personal data. Where personal data is processed by another person on behalf of the controller, the controller is jointly responsible with that person for security measures.

A buyer should request security policies, access control procedures, encryption standards, penetration test reports, vulnerability assessments, incident response plans, employee training records, access logs, backup policies, cloud security documentation, and vendor security assessments.

The depth of review should depend on the target’s risk profile. A hospital, fintech platform, SaaS provider, AI company, e-commerce platform, or call center requires a much more detailed cybersecurity review than a small company processing limited business contact data. If the target processes health data, biometric data, financial information, children’s data, or large-scale customer data, the buyer should consider technical cybersecurity due diligence by specialists.

Data Breach History and Notification Risk

The buyer should ask whether the target has experienced any data breaches, security incidents, ransomware attacks, phishing incidents, unauthorized access, accidental disclosures, cloud misconfigurations, lost devices, employee misuse, or vendor incidents.

Under KVKK Article 12, if processed personal data is obtained by others unlawfully, the data controller must notify the data subject and the Board within the shortest time. The Board’s Decision No. 2019/10 interprets “the shortest time” as requiring notification to the Board without delay and no later than 72 hours after the data controller becomes aware of the breach. The decision also requires controllers to document all personal data breaches, including facts, effects, and measures taken.

In M&A, undisclosed breaches can be highly material. A target may have failed to notify a breach, underreported affected data categories, failed to inform data subjects, or failed to remediate vulnerabilities. Such issues may lead to future investigations, fines, customer claims, contractual disputes, and reputational harm after closing.

Special Categories of Personal Data

The buyer should identify whether the target processes special categories of personal data. These include health data, biometric data, genetic data, criminal conviction and security measure data, union membership data, religious belief data, political opinion data, and other sensitive categories listed under KVKK Article 6.

Special category data increases transaction risk. Examples include patient records in healthcare deals, biometric entry systems in manufacturing acquisitions, employee health files in HR-heavy businesses, criminal record checks in recruitment platforms, genetic data in biotech companies, and health or fitness data in mobile apps.

The buyer should review legal bases, explicit consent records where relevant, access controls, encryption, retention periods, transfer practices, vendor contracts, and breach history for sensitive data. If the target processes special categories unlawfully, the buyer may need remediation before closing or a specific indemnity in the transaction documents.

Cross-Border Data Transfer Review

Cross-border data transfers are often one of the most important issues in Turkish M&A transactions, especially where the buyer is foreign or part of an international group. After closing, the buyer may want to integrate the target into global HR systems, CRM platforms, ERP systems, cloud infrastructure, cybersecurity tools, reporting systems, or group-wide analytics platforms.

KVKK Article 9 was amended in 2024. Under the amended regime, personal data may be transferred abroad if one of the processing conditions under Articles 5 or 6 exists and there is an adequacy decision. If no adequacy decision exists, transfers may be possible through appropriate safeguards such as standard contracts, binding corporate rules, or written commitments approved by the Board. Article 9/5 also requires standard contracts to be notified to the Authority within five business days after signature.

In due diligence, the buyer should identify all existing foreign transfers. These may include cloud hosting, foreign SaaS tools, parent company systems, CRM platforms, email marketing providers, payment systems, analytics tools, AI providers, HR platforms, customer support systems, and foreign technical support access. If the target relies on foreign vendors without a valid transfer mechanism, the buyer may need to implement standard contracts or other safeguards before integration.

Vendor Contracts and Data Processing Agreements

Many privacy risks arise from vendors. A target may use payroll providers, cloud providers, marketing agencies, call centers, cargo companies, software vendors, payment providers, AI tools, analytics providers, cybersecurity firms, and outsourced developers.

The buyer should review whether vendor contracts contain data protection clauses. Key clauses include processing instructions, confidentiality, security measures, sub-processor restrictions, breach notification, deletion or return obligations, audit rights, cross-border transfer rules, and liability allocation.

This review is particularly important because Article 12 creates joint responsibility where personal data is processed by another person on behalf of the controller. If the target has weak vendor contracts, the buyer may inherit exposure for vendor-related incidents.

Employee Data and HR Due Diligence

Every M&A transaction involves employee data. The buyer should review employee privacy notices, personnel files, payroll processing, occupational health and safety records, workplace camera systems, biometric access systems, disciplinary records, employee monitoring tools, recruitment data, and candidate databases.

Employee data is sensitive in practice even where it is not legally classified as special category data. The buyer should determine whether the target relies excessively on employee consent, whether employees were properly informed, whether monitoring is proportionate, whether health data is restricted, and whether HR data is transferred abroad to group systems.

If the transaction involves a foreign buyer, post-closing HR integration may require cross-border transfer mechanisms. The buyer should plan this before closing rather than discovering after closing that employee data cannot lawfully be transferred to the group’s global HR platform.

Customer, Platform, and Product Data

If the target operates a digital platform, the buyer should examine customer data flows closely. This includes account data, order history, payment-related data, support tickets, user-generated content, ratings, complaints, logs, cookies, SDKs, analytics, advertising data, and profiling systems.

The buyer should determine whether the target can lawfully continue processing this data after the transaction. In a share deal, the controller may remain the same legal entity, but new ownership may still create new data flows, new transfer recipients, or new processing purposes. In an asset deal, the transfer of customer databases may be more sensitive because personal data may move to a new controller. The structure of the deal therefore matters.

If customer data is a core asset, the buyer should require detailed warranties about the lawful collection, use, transfer, and retention of that data.

AI, Analytics, and Data Monetization Risks

Technology targets increasingly use AI, machine learning, profiling, recommendation systems, customer scoring, fraud detection, or data monetization models. The buyer should determine whether personal data is used for training models, improving algorithms, creating profiles, or selling insights.

If the target has used customer or user data for AI training without a clear legal basis or proper notice, the buyer may face future claims or regulatory scrutiny. If the target’s AI dataset contains special categories of data, children’s data, scraped personal data, or unlawfully retained historical data, the risk is higher.

The buyer should ask whether datasets are anonymized, pseudonymized, or identifiable; whether data subjects were informed; whether consent was obtained where necessary; whether data is transferred to foreign AI providers; and whether deletion requests can be honored.

Asset Deals vs Share Deals: Data Protection Differences

Data protection due diligence must consider transaction structure. In a share purchase, the target company remains the same legal entity, but control changes. The target’s historical liabilities remain in the company unless contractually allocated. The buyer should therefore focus on inherited compliance risk and post-closing remediation.

In an asset deal, personal data may be transferred from the seller to the buyer as part of the business transfer. This may constitute a data transfer requiring legal basis, privacy notice review, and possibly data subject communication depending on the structure. Customer databases, employee records, vendor contacts, and user accounts cannot be treated like ordinary physical assets. The buyer should assess whether the transfer is lawful, necessary, proportionate, and disclosed.

In both structures, the buyer should consider whether new processing purposes will arise after closing. If the buyer intends to use the target’s data for new marketing, analytics, group reporting, AI training, or international integration, additional compliance steps may be necessary.

Red Flags in Turkish Privacy Due Diligence

Common red flags include:

No personal data inventory.

No VERBIS registration despite apparent obligation.

VERBIS entries inconsistent with actual data flows.

Generic or missing privacy notices.

No evidence of explicit consent for marketing or sensitive processing.

Large marketing databases with unclear source.

Use of foreign cloud systems without Article 9 transfer documentation.

No data processing agreements with key vendors.

Past data breaches with no Board notification.

No breach response plan.

Biometric systems used for ordinary attendance tracking.

Excessive employee monitoring.

Health or biometric data stored without adequate safeguards.

No retention and deletion policy.

Inactive customer or candidate data stored indefinitely.

Use of AI tools with customer or employee data without notice.

No data subject request procedure.

Each of these findings should be evaluated for financial, operational, regulatory, and reputational impact.

Transaction Document Protections

Findings from privacy due diligence should be reflected in transaction documents. A buyer may seek representations and warranties stating that the target has complied with KVKK, provided privacy notices, obtained required consents, registered with VERBIS where required, maintained security measures, responded to data subject requests, notified data breaches where required, and lawfully transferred data domestically and abroad.

The buyer may also request specific indemnities for identified risks, such as an undisclosed data breach, unlawful marketing database, missing VERBIS registration, unlawful biometric processing, or non-compliant cross-border transfer structure.

Other protections may include pre-closing covenants, closing conditions, remediation obligations, escrow arrangements, purchase price adjustments, disclosure schedules, and post-closing cooperation duties. If privacy risk is material, the buyer may require remediation before closing.

Post-Closing Integration

Due diligence does not end at closing. After closing, the buyer should implement a data protection integration plan. This may include updating privacy notices, reviewing VERBIS entries, implementing standard contracts for foreign transfers, revising vendor agreements, improving security controls, deleting obsolete data, training employees, reviewing marketing permissions, and aligning data retention policies.

If the buyer integrates the target into group systems, it should assess whether new recipients, new purposes, new vendors, or new countries are involved. If so, privacy notices, transfer mechanisms, and internal records may need updating.

The first 100 days after closing are critical. Many buyers discover privacy issues only when they begin system integration. A better approach is to identify these issues during due diligence and prepare a post-closing remediation roadmap before signing.

Practical Due Diligence Checklist

A strong personal data protection due diligence review in Turkish M&A should include:

1. Personal data processing inventory.
2. Data flow maps.
3. VERBIS registration and entries.
4. Privacy notices for customers, employees, candidates, website users, patients, and platform users.
5. Explicit consent records.
6. Marketing permission records.
7. Cookie and tracking technology review.
8. Domestic and international data transfer records.
9. Article 9 transfer mechanisms.
10. Vendor contracts and data processing agreements.
11. Cybersecurity policies and technical measures.
12. Data breach history and notifications.
13. Data subject request records.
14. Retention and deletion policies.
15. Special category data processing.
16. Employee monitoring and biometric systems.
17. AI, analytics, and profiling practices.
18. Customer database lawfulness.
19. Post-closing integration requirements.
20. SPA warranties, indemnities, and covenants.

Conclusion

Personal data protection due diligence in Turkish M&A transactions is now a critical legal and commercial requirement. A target company’s customer database, employee records, platform data, health data, biometric systems, AI datasets, marketing permissions, and cloud infrastructure may create significant value, but they may also carry serious regulatory and financial risk.

KVKK imposes obligations regarding privacy notices, lawful processing, data security, VERBIS registration, breach notification, retention, data subject rights, and cross-border transfers. Non-compliance may lead to administrative fines, Board investigations, corrective orders, compensation claims, criminal law implications in serious cases, contractual disputes, and reputational harm. Administrative fines under Article 18 are updated annually, and KVKK expressly provides fine categories for failures relating to information duties, data security, Board decisions, registry obligations, and Article 9/5 standard contract notification duties.

For buyers, the safest approach is to treat privacy due diligence as a separate M&A workstream. The review should cover data inventories, VERBIS, privacy notices, consent records, marketing permissions, data transfers, vendor contracts, data breaches, cybersecurity, retention, special categories of data, and post-closing integration. For sellers, preparing these documents before a sale process can reduce transaction delays, improve buyer confidence, and protect valuation.

In modern Turkish M&A practice, personal data protection is no longer a back-office compliance issue. It is part of deal value, risk allocation, corporate governance, and transaction strategy. A well-executed KVKK due diligence process helps buyers identify hidden liabilities, negotiate stronger protections, and integrate the target lawfully after closing.