The Turkish Competition Board’s Apple/Pixelmator Decision: A Killer Acquisition?

Apple/Pixelmator Transaction and Relevant Market Assessment

Apple’s plan to acquire sole control of Pixelmator was first announced on November 1, 2024, on Pixelmator’s website[3]. Notification to the TCA followed on November 5. The deal required merger clearance only in Türkiye. In addition, a foreign direct investment filing was made in Lithuania, which was cleared on November 8. Under Article 14 of the Digital Markets Act, Apple, as a gatekeeper, also informed the European Commission about the acquisition[4]. The deal closed globally on February 11, 2025.

Pixelmator, the target, founded in Lithuania in 2009, develops image-editing and design apps for Mac, iPhone, iPad and Vision Pro, distributed via the App Store. Apple, the acquirer, is a global technology giant engaged in the design, production and marketing of smartphones, tablets, personal computers and wearable technology products.

Pursuant to Communiqué No. 2010/4 on Mergers and Acquisitions Calling for the Authorization of the Competition Board, Pixelmator was classified as a “technology undertaking,” meaning the target-side turnover threshold did not apply[5]. Since Apple’s worldwide turnover exceeded the relevant thresholds, the transaction was deemed notifiable and subject to the Board’s approval.

The Board did not make a definitive definition of the relevant product market, as it would not change the outcome. Instead, the transaction was assessed under a hypothetical market for “image-editing and design applications.” Since such apps are equally accessible nationwide and competitive conditions do not differ by region, Türkiye was taken as the relevant geographic market.

Vertical Assessment

The Board considered Apple’s activities in iOS, iPadOS and macOS as the “upstream” market, while Pixelmator operates in the “downstream” image-editing and design applications market. Based on this vertical overlap, the case was reviewed under the Guidelines on the Assessment of Non-Horizontal Mergers and Acquisitions. In digital markets, the upstream/downstream split is not always clear because operating systems act as distribution channels for apps, while apps increase the ecosystem’s appeal. Still, the Board noted that this distinction did not affect the outcome here.

Unilateral Effects: With respect to input foreclosure, the Board found that Pixelmator’s market share and user numbers were low, both in Türkiye and globally, and that strong competitors, especially Adobe, are active in the market. As such, it concluded that Apple would not have commercial incentives to block rival apps’ access to the App Store or impose unfavorable conditions. Apple’s business model (with regard to apps) depends heavily on App Store revenues, so keeping third-party apps on the platform benefits Apple itself. The Board summarized this as: “ability exists, but no incentive”. Apple has strong reasons to keep the App Store wide and attractive, since foreclosure would hurt both app revenues and hardware sales.

The Board also tested another scenario: what if Pixelmator were made the default app on Apple devices, integrated with Apple’s own Photos app, or promoted in the App Store? Could this scenario lead to the exclusion of rival apps? The TCB explained that Apple did not grant Pixelmator any target-specific advantage: both the PhotoKit and Image Playground application programming interfaces (APIs) remain open to third-party developers. Accordingly, the TCB found that rivals’ integration opportunities would not be eliminated post-transaction. Considering Apple’s commercial incentives and Pixelmator’s limited market share, the Board concluded that Apple would not pursue a foreclosure strategy against rival applications following the transaction.

As to customer foreclosure, the Board took into account that Apple is the sole operator of the App Store on iOS and iPadOS. In theory, by acquiring Pixelmator, Apple could restrict rival applications’ access to a significant user base. However, given Pixelmator’s low market share and the presence of numerous alternative apps, the TCB concluded that such a foreclosure effect was unlikely.

The Board’s assessment for macOS differs in certain respects. Unlike iOS and iPadOS, the macOS ecosystem allows third-party app stores and sideloading, which limits Apple’s exclusivity. Accordingly, the customer foreclosure scenario required a standalone assessment for macOS. The Board found that, given Pixelmator’s low market share and the availability of numerous alternative apps, macOS users would continue to have access to competitive choices post-transaction.

Coordinated Effects: In assessing coordinated effects, the Board examined the market structure. The market for image-editing and design applications is fragmented, with numerous active players. This structure makes coordination hard to establish or sustain. Accordingly, the Board concluded that the notified transaction is unlikely to give rise to coordinated effects considering the fragmented market structure and low market share of Pixelmator.

Can the Apple/Pixelmator Transaction Be Considered a “Killer Acquisition”?

In its decision, the Board draws attention to the risks that may arise when nascent or developing undertakings are acquired. Such transactions may harm consumers through higher prices, reduced innovation or higher barriers to entry. Apple’s position among the top acquirers of start-ups between 2020 and 2024 brought Pixelmator into this debate. Given the central role of innovation-driven rivalry in digital markets, the potential consequences of an incumbent acquiring a new and innovative undertaking warrant careful scrutiny.

The decision refers to the notion of killer acquisition and the theory of harm based on potential competition. This concern arises where the acquisition removes the future competitive pressure of an undertaking that has not yet entered the market or has only recently entered. The key distinction is that potential-competition cases address the prevention of future rivalry, whereas killer acquisitions go further by extinguishing the product itself.

In this respect, the Apple/Pixelmator transaction is framed not through a classic horizontal-overlap lens, but against the dynamics of multi-sided markets and innovation-based theories of harm. In digital ecosystems, even seemingly complementary products can exert competitive pressure on the other side of the market. Accordingly, a central question in the decision is how Apple’s acquisition of Pixelmator may affect the direction of innovation over the long term.

The Board found no direct horizontal overlap between the parties’ activities. Apple’s pre-installed Photos app and Pixelmator’s editing/design tools were not considered substitutes; accordingly, the parties were not viewed as competing in the same market. That said, mindful that market definitions can be misleading in transactions involving nascent undertakings, the Board adopted a cautious approach and also examined a scenario in which Photos and Pixelmator are assumed to operate in the same market. Under that assumption, the Board observed the presence of stronger players from the user’s perspective, such as Adobe and Canva. The TCB further considered that the combined share post-transaction would not exceed the 20% reference threshold in the Guidelines on the Assessment of Horizontal Mergers and Acquisitions; even if that threshold were exceeded, Pixelmator’s pre-transaction share is low, so the transaction would not materially alter competitive dynamics. The Board also noted Apple’s plans to continue developing Pixelmator, to provide the necessary financial and technological resources, and thereby to foster innovation in the market. In this light, Apple’s aim was characterized not as eliminating Pixelmator’s products, but as strengthening its portfolio through complementary technologies.

In conclusion, while not entirely ruling out a possible horizontal overlap, the Board concluded that the notified transaction would not give rise to a significant impediment to effective competition in terms of either unilateral or coordinated effects.

Dissenting Opinion: The Ecosystem Phenomenon and Conglomerate Effects

The dissenting opinion stresses that the preliminary report contained significant shortcomings. In particular, it argues that the assessments of the Board were insufficient with respect to the ecosystem phenomenon and conglomerate effects, and therefore the conclusion reached was not accurate.

It is noted that Apple’s vertically integrated, multi-sided structure (spanning hardware, operating systems, and apps) shapes both user preferences and rivals’ access at the ecosystem level. According to the dissenting opinion, the integration of Pixelmator into this structure should not be viewed merely as a question of an individual app’s market share, but rather as a matter of its complementary contribution to the ecosystem.

In the dissenting opinion, the Board’s review was criticized as being too narrow. It was emphasized that a proper counterfactual analysis should have been conducted under the killer acquisition theory. The dissenting opinion also recalled Apple’s earlier discontinuation of Aperture and questioned whether, in contrast, Pixelmator was acquired as part of a “reverse killer acquisition.” Reference was made to Apple’s previous acquisitions such as Darksky, as well as Pixelmator’s funding situation and Apple’s motives in the transaction, including whether Apple perceived Pixelmator as a threat, or the possible role of venture capital connections. According to the dissenting opinion, all of these factors should have been evaluated together to fully test the killer acquisition theory. The dissenting opinion further criticized the decision for failing to examine in more detail the post-transaction pricing, access conditions, and Pixelmator’s integration within the Apple ecosystem.

Finally, the dissenting opinion stated that analyzing mergers in digital markets solely through horizontal and vertical overlaps is insufficient. It argued that in such markets, the assessment should also consider whether there are vertical overlaps between digital products that rely on each other’s data or need to work together, and whether complementary products with overlapping user bases are being combined. In conclusion, the dissenting opinion underlined that the ecosystem and conglomerate perspectives were not adequately taken into account in the TCB’s decision, and therefore it was not possible to agree with the clearance decision reached without addressing these shortcomings.

Conclusion

The Authority clearly takes a cautious approach in reviewing tech-sector deals. In fact, a dissenting opinion raising killer acquisition concerns was also seen in the Google/Galileo case[6]. When read together, the dissenting opinions in Apple/Pixelmator and Google/Galileo decision sunderline the same message: digital markets need digital-specific criteria. Both point out that market power here is layered and shaped by network effects. And both stress that when it comes to digital concentrations, long-term parameters like innovation and access should carry decisive weight.

[1] Attorney Gülce Korkmaz is the external competition law consultant of Baş | Kaymaz Law Firm. After completing her master’s degree at Bilkent University, she is currently pursuing her doctoral studies in the field of competition law at the Faculty of Law of Lüneburg Leuphana University (Germany) as a PhD researcher with the scholarship of the Joachim Herz Foundation.

[2] For the Board’s reasoned decision on the case, please see here (only available in Turkish).

[3] Please see here for the Pixelmator’s announcement about the deal.

[4] Please see EC’s website for the list of acquisitions realized by the gatekeepers: https://digital-markets-act-cases.ec.europa.eu/acquisitions: “Apple Inc., through a subsidiary, will acquire all of the share capital in and therefore sole control over Pixelmator. Pixelmator develops image editing and design software for Mac, iPhone, iPad, and Vision Pro. Further information about Pixelmator is available at: https://www.pixelmator.com. Apple (together with its group companies) designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related services. Further information about Apple is available at: https://www.apple.com.”

[5] For further information on the exception for technology undertakings under Turkish merger control regime, please see: https://www.baskaymaz.av.tr/merger-control-in-turkiye-5-technology-undertakings-exception/

[6] Please see our information note on Google/Galileo case, entitled “The Turkish Competition Board’s Decision on the Google/Galileo Acquisition: What Doesn’t Kill You Makes You Stronger (Or Does It?)”  https://www.baskaymaz.av.tr/the-turkish-competition-boards-decision-on-the-google-galileo-acquisition-what-doesnt-kill-you-makes-you-stronger-or-does-it/

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