With crackdown and Twitter and YouTube, is Turkey running the risk of turning off VCs?
Turkey's ban on Twitter is nearly two weeks old now, but it looks like it could be coming to an end very, very soon.
In a unanimously ruling, Turkey’s Constitutional Court declared that blocking Twitter is a violation of individuals’ freedom of speech, according to a report out of the Daily Hürriyet on Wednesday.
Specifically, they said it was a violation of right that are guaranteed by Article 26 of the Constitution, which states that "Everyone has the right to express and disseminate his thoughts and opinion by speech, in writing or in pictures or through other media, individually or collectively."
The Twitter ban came down on March 20th, just hours after Prime Minister Tayyip Erdogan mocked the service, and then said that he would "wipe out" the social network after he was accused of corruption on the service.
The official reason the government gace for the move, though, involved them accusing Twitter of refusing to remove certain links from its site, which have been deemed illegal by the country's courts.
With the ruling, authorities must immediately unblock Twitter in Turkey, Metin Feyzioğlu, the president of Turkey's Bar Associations (TBB), told the Daily Hürriyet. And if they do not, he already planning on taking action.
"If they don't abide by the ruling, we will file a criminal complaint against the TİB by attaching the ruling of the Constitutional Court," he said.
Twitter responded to the court's decision in a tweet, in which it expressed hope that the service would soon be turned back on:
We welcome this Constitutional Court ruling, and hope to have Twitter access restored in Turkey soon. https://t.co/MfynTaB1tk— Policy (@policy) April 2, 2014
There is no word on whether or not the court will take the same position on the Turkish government's banning of YouTube, which occurred a week later.
How badly will these actions hurt Turkey?
Turkey is far from the first government to try to take down social media once it became unfavorable to them. Twitter has been officially banned in China since 2009, and it suffered crackdowns in countries like Iran and Egypt, while they were having their revolutions in 2009 and 2010, respectively.
The question is, though, how much will affect venture capital firms that are looking to invest there, as well as companies that are looking to expand?
According to Neal Hansch, Managing Director of the MEST Incubator, it does put a spotlight on the risks that are involved in putting money into an unpredictable, and possibly unstable, country.
"I think this move generally highlights the inherent, incremental risks in doing business in countries where there’s macro uncertainty around government policies that can be repressive or at the least, erratic and difficult to predict," he told me.
"This risk is similar to those territories where corporate, employment or intellectual property laws less transparent or well defined or where currencies are more tightly controlled and ultimate liquidity (being able to get money back out of the country) could be jeopardized."
Ultimately, though, he does not seem to think that it have too much of an effect on investors because, frankly, they already knew that there could be potential problems.
"It will though dampen investor interest in the region, though I suspect not noticeably from prior levels. Investors already recognize the risk and have adjusted their interest levels (or valuations) accordingly."
The real risk, he said, is in a place like Russia, as it is a country that was thought to be more stable, but has recently been hit with sanctions, and is risking potential war with both the Ukraine and NATO.
"VCs are theoretically experts at judging risks (market, team, product, pricing, etc.), but assessing and dealing with macro geopolitical risks are generally outside our day-to-day power alleys," he said.
"Finding world class teams, attacking or defining huge new markets and proving their ability to execute is a challenging enough business, that adding in these type of overarching, geopolitical risks is usually beyond our appetite. We invest in what we know and can get comfortable with."
(Image source: lindasunporch.blogspot.com)