Anticompetitive agreements

Assessment framework

What is the general framework for assessing whether an agreement or concerted practice can be considered anticompetitive?

Article 4 of the Turkish Competition Law is akin to and closely modelled on article 101(1) of the TFEU. It prohibits all agreements between undertakings, decisions by associations of undertakings and concerted practices that have (or may have) as their object or effect the prevention, restriction or distortion of competition within a Turkish product or services market or a part thereof. Unlike the TFEU, article 4 does not refer to ‘appreciable effect’ or ‘substantial part of a market’ and thereby excludes any de minimis exception. The enforcement trends and proposed changes to the legislation are, however, increasingly focusing on de minimis defences and exceptions.

Article 4 also prohibits any form of agreement that has the potential to prevent, restrict or distort competition. Again, this is a specific feature of the Turkish cartel regulation system, recognising a broad discretionary power of the Board.

Article 4 brings a non-exhaustive list of restrictive agreements that is, to a large extent, the same as article 101(1) of the TFEU.

Restrictive agreements that do not benefit from the block exemption under the relevant communiqué or an individual exemption issued by the Board are caught by the prohibition in article 4.

A number of horizontal restrictive agreement types, such as price-fixing, market allocation, collective refusals to deal (group boycotts) and bid-rigging, have consistently been deemed to be per se illegal.

The Turkish antitrust regime also condemns concerted practices, and the Authority easily shifts the burden of proof in connection with concerted practice allegations through a mechanism called ‘the presumption of concerted practice’.

Technology licensing agreements

To what extent are technology licensing agreements considered anticompetitive?

The answer to this question depends heavily on whether the technology licensing agreement in question benefits from Communiqué No. 2008/2. Communiqué No. 2008/2 is akin to and closely modelled on Commission Regulation (EC) No. 772/2004 of 27 April 2004 on the application of article 101(3) of the Treaty to categories of technology transfer agreements. Accordingly, factors such as the market shares of the parties (30 per cent for competitors and 40 per cent for non-competitors), contents of the agreement, competition between the parties, etc, would be essential in assessing whether the agreement is anticompetitive. Hardcore restrictions in technology licensing agreements such as price-fixing or maintenance, restriction of output, market or territory sharing are considered anticompetitive. Communiqué No. 2008/2 exempts a broader range of restrictive provisions, if the agreement is between non-competitors.

Co-promotion and co-marketing agreements

To what extent are co-promotion and co-marketing agreements considered anticompetitive?

The answer to this question depends heavily on whether the parties to the co-promotion or co-marketing agreement compete with each other at the manufacturing level. If the answer is negative, the agreement might benefit from the block exemption available under Communiqué No. 2002/2. If the answer is affirmative, any restrictive provisions must fulfil the conditions of individual exemption.

In any event, there have been cases where the Board reviewed and analysed co-promotion and co-marketing agreements. These agreements are considered anticompetitive when and to the extent they:

  • serve as a tool to fix prices or other sales terms (eg, Biovesta/Abdi İbrahim, 27 November 2012, 12-60/1597-581);
  • enable the parties to share customers, markets or territories;
  • enable the parties to control the output or demand; or
  • restrict competition by hindering competitors, forcing competitors out of the market or preventing potential new entries (eg, Eczacıbaşı/Gül, 12 September 2014, 14-32/647-284; Abdi İbrahim, 9 May 2013, 13-27/368-170; Merck Sharp, 18 July 2012, 12-38/1086-345; Abbot/Eczacıbası, 15 March 2007, 07-23/227-75; and Sandoz/Eli Lilly, 2 August 2007, 07-63/776-282).

The guidelines on horizontal cooperation agreements lay down the basics of the competition law analysis of similar co-promotion and co-marketing agreements, including the above-listed principles.

Other agreements

What other forms of agreement with a competitor are likely to be an issue? How can these issues be resolved?

A number of horizontal restrictive agreement types with actual or potential competitors, such as price-fixing, market allocation, output restriction, collective refusals to deal (group boycotts) and bid-rigging, have consistently been deemed to be per se illegal. However, agreements such as licensing, R&D, co-marketing and co-manufacturing can be exempted from the article 4 prohibition under an effects-based test, since they may bring about economic or technological efficiencies. Putting in place appropriate confidentiality conditions and Chinese wall separation mechanisms may assist in preventing coordinated behaviour, reducing the exposure risks of collusion or claims of facilitating collusion between the parties. In any event, this issue warrants a case-by-case analysis.

Issues with vertical agreements

Which aspects of vertical agreements are most likely to raise antitrust concerns?

Provisions that may serve as a direct or indirect tool to orchestrate resale price maintenance, exclusivity clauses, customer or territory allocations or restrictions, non-compete obligations, provisions that facilitate information exchanges and most favoured customer clauses are typical examples of vertical arrangements that are most likely to raise competition law concerns. The analysis should be handled in view of Communiqué No. 2002/2. Under Communiqué No. 2002/2, agreements between two or more undertakings operating at different levels of the production or distribution chain are exempted from the article 4 prohibition, provided that they meet the conditions mentioned in the Communiqué. The Communiqué brings about a 40 per cent market share threshold so vertical agreements of undertakings with market shares that exceed 40 per cent cannot benefit from the block exemption. Such undertakings may apply to the Authority for an individual exemption or carry out a self-assessment to see if the vertical agreement in question meets the conditions of individual exemption.

Resale price maintenance

Communiqué No. 2002/2 does not exempt agreements that directly or indirectly restrict the buyer’s ability and freedom to determine its own resale prices (eg, Reckitt Benckiser, 13 June 2013, 13-36/468-204; Anadolu Elektrik, 23 June 2011, 11-39/838-262; Bakara İlaç, 31 March 2010, 10-27/394-147; Benckiser, 3 July 2008, 08-43/591-223; and Frito-Lay, 11 January 2007, 07-01/12-7). However, indications in practice suggest that the Board is increasingly unlikely to adopt a dismissive approach towards resale price maintenance behaviour (Dogati, 22 October 2014, 14-42/764-340).

Exclusivity and restrictions on customers and territories

Provisions that extend beyond what is permissible under an appropriately defined exclusive distribution system, such as restriction of passive sales, cannot benefit from the block exemption and may exclude the vertical agreement from the application of Communiqué No. 2002/2 (eg, Trakya Cam, 2 December 2015, 15-42/704-258; Mey İçki, 12 June 2014, 14-21/410-178; Novartis, 4 July 2012, 12-36/1045-332; Turkcell, 6 June 2011, 11-34/742-230; Unilever, 15 May 2008, 08-33/421-147; Pfizer/Dilek Ecza, 2 August 2007, 07-63/774-281; and Karbogaz, 23 August 2002, 02-49/634-257).

Non-compete obligations

Non-compete obligations for more than five years and non-compete provisions that are designed to remain in effect post-termination cannot benefit from the block exemption (eg, Sanofi Aventis, 2 November 2012, 12-59/1570-571; Boehringer, 27 October 2011, 11-54/1389-497; Yatsan Sünger, 23 September 2010, 10-60/1251-469; Boydak, 2 November 2011, 11-55/1434-509; BP, 23 September 2010, 10-60/1261-473; Industrial Ice-cream, 15 May 2008, 08-33/421-147; and Takeda, 3 April 2014, 14-13/242-107).

Other

Other forms of special clauses such as provisions that facilitate information exchanges and most favoured customer clauses might also raise competition law concerns. Such clauses warrant close consideration and case-by-case analyses.

Patent dispute settlements

To what extent can the settlement of a patent dispute expose the parties concerned to liability for an antitrust violation?

There is no specific statutory provision or case law on this matter.

Joint communications and lobbying

To what extent can joint communications or lobbying actions be anticompetitive?

Article 4 of Law No. 4054 prohibits agreements and concerted practices between companies, and decisions and practices of trade associations that 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. Therefore, joint communications or lobbying actions may raise competition law concerns if they entail exchange of commercially sensitive information by competitors (12 Banks, 8 March 2013, 13-13/198-100; Automotive Sector, 18 April 2011, 11-24/464-139; Association of Manufacturers of Fertilizer, 8 February 2002, 02-07/57-26; Coal Cartel 11 September 2003, 03-60/733-343; and Ceramic Cartel 24 February 2004, 04-16/123-26).

There have been cases where the Board reviewed and analysed joint communications or lobbying actions. These are considered anticompetitive when and to the extent they:

  • serve as a tool to fix prices or other sales terms (eg, Turkish Pharmacists’ Association, 10 July 2007, 07-58/674-233);
  • enable the parties to share customers, markets or territories;
  • enable the parties to control the output or demand; or
  • restrict competition by hindering competitors, forcing competitors out of the market or preventing potential new entries (eg, TEB (Turkish Pharmacists’ Association), 9 July 2010, 10-49/912-321; and TEB (Turkish Pharmacists’ Association), 18 September 2000, 00-35/393-220).

The guidelines on horizontal cooperation lay down the basics of the competition law analysis of joint communications or lobbying actions between competitors, including the above-listed principles.

Public communications

To what extent may public communications constitute an infringement?

The answer to question 20 would apply here as well. A pharmaceutical company or trade association would be subject to antitrust liability to the extent that they violate articles 4 or 6 of Law No. 4054 during public communications by, for instance, price signalling.

Exchange of information

Are anticompetitive exchanges of information more likely to occur in the pharmaceutical sector given the increased transparency imposed by measures such as disclosure of relationships with HCPs, clinical trials, etc?

The pharmaceutical market is indeed considerably more transparent than other markets. Transparent markets are generally considered to be more suitable for anticompetitive exchanges. However, this does not readily apply to the pharmaceutical sector since the industry is highly regulated. Types of strategic information that are highly sought after in other markets simply do not carry the same weight in the pharmaceutical sector because of the regulatory interests. As detailed above, pricing is closely monitored by the authorities and regulated by the law-maker.

Disclosure of relationships regarding clinical trials, etc, would not lessen the competition in the market to the extent that these disclosures do not contain information that would be directly relevant to the competition.