Antitrust: restrictive agreements and dominance
Turkish national competition law and all related regulations and applications are equivalent to Articles 101 and 102 of the Treaty on the Functioning of the European Union.
As previously mentioned, restrictive agreements are regulated in Article 4 of the Competition Act, and are described as 'agreements and concerted practices between undertakings, and decisions and practices of associations of undertakings which have as their object or effect or likely effect the prevention, distortion or restriction of competition directly or indirectly in a particular market for goods or services are illegal and prohibited'. It should be noted that this list is not exhaustive.
Such cases are, in particular, as follows:
- fixing the purchase or sale price of goods or services, elements such as cost and profit that dictate the price, and any terms of purchase or sale;
- partitioning markets for goods or services, and sharing or controlling all kinds of market resources or elements;
- controlling the amount of supply or demand in relation to goods or services, or determining them outside the market;
- complicating and restricting the activities of competing undertakings, or excluding undertakings operating in the market by boycotts or other behaviour, or preventing potential new entrants to the market;
- except for exclusive dealing, applying different terms to persons with equal status for equal rights, obligations and acts; and
- contrary to the nature of the agreement or commercial usage, obliging the purchase of other goods or services together with a good or service, tying a good or service demanded by purchasers acting as intermediary undertakings to the condition of displaying another good or service by the purchaser, or putting forward terms as to the resupply of a good or service.
Where the existence of an agreement cannot be proved, where the price changes in the market or the balance of demand and supply, or the operational areas of undertakings, are similar to those in markets where competition is prevented, distorted or restricted, this constitutes a presumption that the undertakings are engaged in concerted practices.
Each of the parties may relieve itself of the responsibility by proving they have not engaged in a concerted practice, provided that this is based on economic and rational facts.
A dominant position is regulated in Article 6 of the Competition Act, and is defined as 'the abuse, by one or more undertakings, of their dominant position in a market for goods or services within the whole or a part of the country on their own or through agreements with others or through concerted practices, is illegal and prohibited'.
Particular cases of abuse include:
- preventing, directly or indirectly, another undertaking from entering into the area of commercial activity, or actions aimed at complicating the activities of competitors in the market;
- directly or indirectly discriminating by offering different terms to purchasers with equal status for the same and equal rights, obligations and acts;
- purchasing another good or service together with a good or service, or tying a good or service demanded by purchasers acting as intermediary undertakings to the condition of displaying another good or service by the purchaser, or imposing limitations with regard to the terms of purchase and sale in the case of resale, such as not selling a purchased good below a particular price;
- actions that aim to distort competitive conditions in another market for goods or services by means of exploiting financial, technological and commercial advantages created by dominance in a particular market; and
- restricting production, marketing or technical development to the prejudice of consumers.
The violations listed in the Competition Act are the most common types of abuse of a dominant position. It must be emphasised that is not necessary for an enterprise to be at fault while abusing a dominant position. Fault, and its extent, will only be taken into consideration while imposing a sanction.
Becoming dominant or reinforcing the dominant position of an entity through association or acquisition is prohibited by the Competition Act if such a situation limits competition to a large extent. Acquisition means gaining control of another establishment by way of agreement by a person or persons in control of a current establishment. The economic effects of acquisitions and associations are subjected to the same scrutiny, as they have the same effects. The Competition Board has the authority to determine, via its communiqués, the types of mergers and acquisitions that must be notified to the Board and for which permission must be obtained. The Competition Authority can invalidate procedures that cause distortion of competition, and can also decide to separate parties if they are not actually associated.
According to Communiqué No. 2012/3, issued on 3 January 2013, which confirmed amendments to Communiqué No. 2010/4 Concerning the Mergers and Acquisitions Calling for the Authorisation of Competition Authority, in a merger or acquisition transaction as specified under Article 5 of Communiqué No. 2010/4, authorisation of the Competition Board will be required for the relevant transaction to carry legal validity if the total turnover of the transaction parties in Turkey exceeds 100 million Turkish liras, and the turnover of at least two of the transaction parties in Turkey each exceed 30 million Turkish liras. Previously, the authorisation of the Competition Board was also required where an asset or activity subject to acquisition in acquisition transactions, or at least one of the parties to a transaction in merger transactions, had a turnover in Turkey exceeding 30 million Turkish liras, and the other party to the transaction had a global turnover exceeding 500 million Turkish liras. However, this authorisation requirement was abolished by an amendment to Article 5 of Communiqué No. 2010/4 in 2017.i Significant casesExamples of decisions on anticompetitive agreementsNumil/Nestlé/Montero/Kopas/Hipp/Abbott investigation
The above-mentioned enterprises operate in Turkey and import infant formula and follow-on milk. It was alleged that they jointly determined the prices in the market by mutual agreement in breach of Article 4 of the Competition Law. At the on-site investigations carried out at said enterprises no proof could be found to indicate that they were in an anticompetitive collusive relationship, therefore in February 2019 the Turkish Competition Authority found that the concerned undertakings did not breach the Competition Law and determined that there was no need to open a fully fledged investigation into the undertakings.Michelin Lastikleri Ticaret investigation
It was claimed that the resale price and conditions were determined by Michelin, sales restrictions were imposed on the dealers, and that dealers working with competitors were excluded from the market. It was concluded that there was no need to open an investigation against Michelin in respect of the alleged complaints.Examples of decisions on abuse of dominanceMercedes Benz Turk investigation
This was an investigation about the rebate (discount) system on truck sales applied by Mercedes Benz Turk AS. The relevant decision concerned the investigation of abuse of dominance in the concrete pump market in the agreements concluded with concrete pump suppliers and the applied rebate system. It was decided that there was no violation of Article 6 of the Competition Act and no administrative fine was applied.Mey Icki investigation
There was investigation to determine whether Mey İçki obstructed the operations of competing undertakings by putting pressure on raki points of sale by means of concessions and certain practices, and violated the Competition Act by abusing its dominant position.
It was decided that Mey İçki, which holds a dominant position in the raki market, had violated Article 6 of the Competition Act by engaging in the following practices:
- it provided discounts and other financial advantages to the on- and off-premises points of sale depending on the points of sales' realisation of the raki purchase targets, set at more than 80 per cent of the total raki purchases of the point of sale within a certain period;
- it provided periodic purchase targets for points of sale without purchasing agreements with Mey İçki and provided discounts and other financial advantages depending on whether these targets were achieved; and
- it provided discounts and financial advantages to points of sales in return for having shelf and visibility arrangements in the traditional channel points of sale to the advantage of Mey İçki.
Therefore an administrative fine was imposed on the undertaking under Article 16 of the Competition Act.Examples of decisions on exemption and negative clearanceCard Storage Service of BKM exemption examination
The examination to deal with the individual exemption request application of the Bankalararası Kart Merkezi AŞ (Interbank Card Centre – BKM) for the card storage service it provides. The card storage service comprising the subject matter of the notification is a service provided to those undertakings that receive repeated payments to ensure that payment can be made without requiring said undertakings to store the information for the card to be used for payment, by having another organisation (BKM, in this instance) store the relevant information for them. Within the framework of the notified BKM card storage service, member businesses were not put under any restrictive obligation such as non-compete, exclusivity, etc. The business was able to work with any organisation offering a member business agreement. BKM did not intervene in the commercial relationship between the undertakings in question (such as contract negotiations, virtual point of sale usage conditions, commission negotiations, etc.) In this respect, it was evaluated that the notified service fulfilled the requirement of Article 5(d) of the Competition Act, which prohibits placing undue restrictions on competition. As a conclusion, it was decided that despite its restrictive effects on competition, the card data storage service to be provided by BKM had positive aspects due to technical developments and consumers benefits it would cause, and therefore could benefit from individual exemption under Article 5 of the Competition Act. However, since the relevant market was an emerging one, the exemption in question would expire one year after the date of the decision herein.Booking.com administrative fine
At the end of this investigation, Booking.com and its Turkey office (Booking.com Destek Hizmetleri Ltd Şti) were found to have violated Articles 4 and 6 of the Competition Act, and the Competition Authority issued an administrative fine amounting to 2,543,922.85 Turkish liras in accordance with the Regulation on Fines to Apply in Cases of Agreements, Concerted Practices and Decisions Limiting Competition, and Abuse of Dominant Position.