Turkish Competition Roundup 2017
APRIL 2018 Istanbul, Turkey
Welcome Message
We are pleased to welcome you to the second edition of the Competition Roundup by MoroÄ&#x;lu Arseven. The publication aims to offer a comprehensive overview of Turkish law during 2017, as well as offer insight on trends and developments during the period. Topics covered include key decisions by the Competition Board, new investigations launched and developments in the practice area. 2017 was a busy period for the Board, seeing the Board publish around 40% more reasoned decisions than 2016. The period also saw the Board make a number of interesting decisions which suggest possible changes in its established approach, or address new legal areas which had previously not been addressed in Turkey. For instance, decisions which recognize for the first time that price parity clauses potentially violate competition laws (page 23), signal a potential shift in the Board’s stance on the admissibility of employee statements (page 29), or signal that information transfers in the insurance market may require individual exemptions (page 39). A further interesting 2017 development was a decision from Turkey’s judiciary that Consumer Courts are the appropriate body to hear cases for private enforcement of competition law violations, in the context of compensation cases against a 2013 bank cartel (page 38). We trust the following information will be useful and informative for the reader. If any aspects are of particular interest or importance, please do not hesitate to contact us to discuss further.
Conents
BACKGROUND
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1
Regulatory Framework ..............................
1
Investigation Process .................................
3
Competition-Sensitive Agreements ...........
4
Top Fines ...................................................
5
2017 BOARD ACTIVITY .................................
7
Key Figures ................................................
7
Notable Decisions ......................................
9
Short Form Decisions ................................
33
Investigations launched .............................
35
DEVELOPMENTS
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37
Changes to Merger Control Regime .........
37
Consumer Court Jurisdiction .....................
38
Exemptions in Insurance Market ..............
39
PRACTICE CONTACTS
.................................
41
Competition and Antitrust Practice ............
41
Key Contact Details ...................................
42
Regulatory Framework
Regulatory Framework Oversight and Enforcement
The Turkish Constitution requires the state to take all necessary measures to provide and promote healthy and orderly transactions for money, credit, capital, goods and services, as well as prevent de facto monopolies and cartels (Article 167). Accordingly, the Turkish Competition Authority (“Authority”) was established in 1997 according to Law No. 4054 on Protection of Competition (“Competition Law”). The Authority is an active, independent, autonomous administrative authority. The Competition Board (“Board”) operates as the Authority’s decision making body, conducting Preliminary Investigations and Full Scope Investigations, imposing administrative monetary fines for violations of the Competition Law. The Board considers issues and allegations regarding: • Restrictive trade and concerted practices (Article 4). • Applications for negative clearance and individual exemptions (Article 5). • Abuses of market dominance (Article 6). • Merger controls (Article 7). Information Gathering Powers The Board holds wide investigative powers to: • Request any information it deems necessary from any public institution, organization, undertaking and association of undertakings. Officials must provide the requested information within the determined period. • Examine the books, paperwork and documents of undertakings and associations of undertakings, plus take copies if needed. • Request written or oral statements about particular issues. • Perform dawn raids.
1
The Authority’s Structure The Competition Authority consist of: • The Authority’s President: Prof. Dr. Ömer Torlak • Two Vice Presidents: - Hakan Hüseyin Ünlü - Kürşat Ünlüsoy • Presidency, comprising the Authority’s President and two Vice Presidents. • The Competition Board, comprising seven members total, including the Authority’s President (table below) • The Main Service Units, which conduct inspections and issue audit reports (reporting to the Authority’s Vice Presidents). The Units comprise: - Five Inspection and Execution Departments. - Decisions Department. - Economic Analysis and Research Department. - Information Management Department. - Strategy Development and Budget Department. - External Relations, Training and Competition Advocacy Department. - Administrative Services Department. • Cartel and Onsite Inspection Support Unit (reporting to Hakan Hüseyin Ünlü).
Regulatory Framework
The Board’s Composition
Role
Current Occupant
Appointment Details
Chairman Vice Chairman Board Member
Prof. Dr. Ömer Torlak Arslan Narın Adem Bircan Şükran Kodalak Mehmet Ayan Pending Appointment Pending Appointment
Appointed by Council of Ministers for six year terms, from among Board Members. Appointed by Council of Ministers for six year terms. A third of Board Members are renewed every two years. There are no limits on Board Members serving multiple terms.
2
Investigation Process
Investigation Process Preliminary and Full Scope
Preliminary Investigation
Consumers and companies have the right to complain to the Board about activities by undertakings which they believe have harmed competitive market structures in any way. The Board can also initiate ex officio investigations based on its own knowledge and observations.
• •
The Board can expressly reject complaints which it does not consider serious. Complaints are deemed to have been rejected if the Board does not respond to the applicant within 60 days.
Full scope Investigation • •
The Board chooses to either initiate a Preliminary Investigation, or can also go directly to a Full Scope Investigation.
•
• In general terms, undertakings in a cartel formation can be completely released from monetary fines (or obtain a discount) by informing the Authority about the cartel’s existence. Up until the Board serves its investigation report, the undertaking which first submitted evidence which will lead the Board to the conclusion that Article 4 has been violated, can apply to be exempt from monetary punishment. Later undertakings can earn discounts of up to 50%, with rates varying depending on the order of their application.
3
A team of case-handers prepares a report within 30 days and presents it to the Board. The Board decides within ten days whether it is necessary to proceed to a Full Scope investigation.
• • • •
•
Initiated either directly, or after a Preliminary Investigation. Parties are notified within 15 days of the investigation beginning and asked to send their first written defense within 30 days. Complainants (if any) will be also notified. The investigation team drafts an investigation report and delivers this to the Board and the parties. The investigation report evaluates all evidence obtained via information requests, as well as on-site inspections. Parties must send their second written defense within 30 days, responding the investigation report. The investigation team issue its supplementary opinion within 15 days of receiving the second written defense. Parties must send their third written defense within 30 days, responding to the investigation team’s supplementary opinion An oral hearing can be held, if the Board deems necessary, or a party requests. The Board must finalize its decision within: - 15 days of the oral hearing. - 30 days of the end of the investigation period (if no oral hearing occurs). Investigations generally last six months, but can be extended for a further six months, if necessary.
Agreements
Competition-Sensitive Agreements Negative Clearances and Exemptions
If an agreement potential causes competition law issues, the parties can ask the Board to review the proposed arrangement, by applying for either a Negative Clearance or Individual Exemption. and/or Individual Exemption. Negative Clearance The Board can grant a negative clearance certificate, which essentially indicates that, based on the available information, an agreement, decision, practice, or merger and acquisition is not contrary to Articles 4, 6 and 7. Individual Exemptions The Board can grant exemptions for interundertaking agreements, concerted practices and undertaking associations from the liabilities in Article 4. Exemptions can be granted for fixed periods, or subject to certain conditions, and/or fulfillment of certain obligations.
Block Exemptions The Authority has issued a range of Communiqués providing exemptions for certain agreements and industries, including: • Certain aspects of vertical agreements. • Motor vehicle sector. • Research and development agreements. • Technology transfer agreements. • Insurance sector. • Specialization agreements. Agreements which meet the conditions for a block exemption are automatically exempted from Article 4. The parties do not need to apply to or notify the Board. The Board has also published guidelines to assist in interpreting and applying block exemptions.
The Board must be satisfied that the circumstances meet all of these criteria: a) Ensure new developments and improvements, or economic or technical development in the production or distribution of goods, or provision of services. b) Benefit consumers. c) Do not eliminate competition in a significant part of the relevant market. d) Do not limit competition more than is necessary to achieve the goals in (a) and (b).
4
Top Fines
Top 15 Investigation Fines Undertakings and Groups of Undertakings 2011 onwards
Undertaking or Group of Undertakings
Bank Cartel (2013) Türkiye Petrol Rafinerileri A.Ş. Auto Manufacturers (2011) Mey İçki San. ve Tic. A.Ş. Turkcell İletişim Hizmetleri A.Ş. Bank Cartel (2011) Aegean Region Cement Producers Consumer Electronics Sellers and Manufacturers (2016) Cement Producers (2012) Mey İçki San. ve Tic. A.Ş. Turkcell İletişim Hizmetleri A.Ş. Türk Telekomünikasyon A.Ş. Türk Eczacıları Birliği İktisadi İşletmesi Frito Lay Gıda San. Tic. A.Ş. TTNET A.Ş.
Total Investigation Fines
Violation
Date
Industry
9,996,403,098 ₺ 412,015,081 ₺ 277,421,483 ₺ 155,782,969 ₺ 91,942,343 ₺ 72,337,035 ₺ 70,915,527 ₺
Article 4 Article 6 Article 4 Article 6 Article 6 Article 4 Article 4
08-Mar-13 17-Jan-14 18-Apr-11 16-Feb-16 06-Jun-11 07-Mar-11 14-Jan-16
54,326,631 ₺
Article 4
07-Nov-16
49,165,021 ₺ 41,512,531 ₺ 39,727,308 ₺ 33,983,792 ₺ 18,062,307 ₺ 17,908,674 ₺ 15,512,258 ₺
Article 4 Article 6 Article 6 Article 6 Article 6 Article 4 Article 16(d)
06-Apr-12 12-Jun-14 19-Dec-13 09-Jun-16 06-Dec-16 29-Aug-13 18-Jul-13
Banking Energy Automotive Food & Bev Telco Banking Cement Consumer Electronics Cement Food & Bev Telco Telco Pharma Food & Bev Telco
Bank Cartel
Fine (millions of Turkish Lira)
Türkiye Petrol Rafinerileri A.Ş.
Auto Manufacturers
Mey İçki San. ve Tic. A.Ş.
Turkcell
The Board’s largest fines from a single investigation in recent times was in 2013 for a Banking Cartel. It issued almost 10 billion Turkish Lira in fines, among 12 banks.
5
Top Fines
Top 30 Fines Individual Undertakings 2011 onwards
Undertaking Türkiye Petrol Rafinerileri A.Ş. Economic unity of Türkiye Garanti Bankası A.Ş., Garanti Ödeme Sistemleri A.Ş. and Garanti Konut Finansmanı A.Ş. Akbank T. A.Ş. Mey İçki San. ve Tic. A.Ş. Yapı ve Kredi Bankası A.Ş. TC Ziraat Bankası A.Ş. Türkiye İş Bankası A.Ş. Turkcell İletişim Hizmetleri A.Ş.
Türkiye Halk Bankası A.Ş. Türkiye Vakıflar Bankası T. A.O. Ford Otomotiv San. AŞ. Finansbank A.Ş. Doğuş Otomotiv Servis ve Tic. A.Ş. TOFAŞ Türk Otomobil Fabrikası A.Ş. Mey İçki San. ve Tic. A.Ş. Turkcell İletişim Hizmetleri A.Ş. Türk Telekomünikasyon A.Ş. MAİS Motorlu Araçlar İmal ve Satış A.Ş. Denizbank A.Ş. Peugeot Otomotiv Pazarlama A.Ş. Türk Eczacıları Birliği İktisadi İşletmesi Frito Lay Gıda San. Tic. A.Ş. Toyota Pazarlama ve Satış AŞ. Hyundai Assan Otomotiv San. ve Tic. A.Ş. As Çimento San. ve Tic. A.Ş. TTNET A.Ş. HSBC Bank A.Ş. Göltaş Göller Bölgesi Çimento San. ve Tic. A.Ş. Akbank T.A.Ş. Yapı ve Kredi Bankası A.Ş.
Investigation
Fine
Turnover %
Date
Industry
Article 6
412,015,081 ₺
1.00%
17-Jan-14
Energy
Article 4 (Bank Cartel 2013)
213,384,545 ₺
1.50%
08-Mar-13
Banking
Article 4 (Bank Cartel 2013) Article 6 Article 4 (Bank Cartel 2013) Article 4 (Bank Cartel 2013) Article 4 (Bank Cartel 2013) Article 6 Article 4 (Bank Cartel 2013) Article 4 (Bank Cartel 2013) Article 4 (Auto Manufacturers 2011) Article 4 (Bank Cartel 2013) Article 4 (Auto Manufacturers 2011) Article 4 (Auto Manufacturers 2011) Article 6 Article 6 Article 6 Article 4 (Auto Manufacturers 2011) Article 4 (Bank Cartel 2013) Article 4 (Auto Manufacturers 2011) Article 6 Article 6 Article 4 (Auto Manufacturers 2011) Article 4 (Auto Manufacturers 2011) Article 4 (Aegean Region Cement Producers) Article 6 Article 4 (Bank Cartel 2013) Article 4 (Aegean Region Cement Producers) Article 4 (Auto Manufacturers 2011) Article 4 (Auto Manufacturers 2011)
172,165,155 ₺
1.50%
08-Mar-13
Banking
155,782,969 ₺
4.21%
16-Feb-17 Food & Bev
149,961,870 ₺
1.50%
08-Mar-13
Banking
148,231,490 ₺
1.00%
08-Mar-13
Banking
146,656,400 ₺
1.00%
08-Mar-13
Banking
91,942,343 ₺
1.13%
06-Jun-11
Teleco
89,691,370 ₺
1.00%
08-Mar-13
Banking
82,172,910 ₺
1.00%
08-Mar-13
Banking
68,844,704 ₺
0.90%
18-Apr-11 Automotive
54,021,410 ₺
1.00%
08-Mar-13
49,785,993 ₺
1.50%
18-Apr-11 Automotive
47,803,884 ₺
0.75%
18-Apr-11 Automotive
41,512,531 ₺ 39,727,308 ₺ 33,983,792 ₺
1.50% 4.50% 0.45%
12-Jun-14 Food & Bev 19-Dec-13 Teleco 09-Jun-16 Teleco
26,638,046 ₺
1.00%
18-Apr-11 Automotive
23,055,396 ₺
0.60%
08-Mar-13
20,328,827 ₺
1.50%
18-Apr-11 Automotive
18,062,307 ₺ 17,908,674 ₺
1.50% 2.25%
06-Dec-16 Pharma 29-Aug-13 Food & Bev
16,841,607 ₺
1.50%
18-Apr-11 Automotive
15,871,642 ₺
1.00%
18-Apr-11 Automotive
15,512,902 ₺
3.00%
14-Jan-16
15,512,258 ₺
0.50%
18-Jul-13
Teleco
14,875,404 ₺
0.60%
08-Mar-13
Banking
14,532,699 ₺
4.50%
14-Jan-16
Cement
14,525,268 ₺
0.40%
07-Mar-11
Banking
14,211,048 ₺
0.40%
07-Mar-11
Banking
Banking
Banking
Cement
6
Key Figures
Key Numbers From the Board In 2017 Based on Decisions Published in 2017
338
43
27
Negative Clearance / Individual Exemptions
Privatization and Other Decisions
104
164
Competition Violations
M&A Transaction Authorizations
Reasoned Decisions
Board Decision: “Full-fledged investigation not necessary�
62
18
Preliminary Investigations
Other Requests
24 Full-Fledged Investigations
One or more dissenting Board member 7
11%
29%
Preliminary Investigations
Full-Fledged Investigations 1
Notable Decisions
2017’s largest fine:
155,782,969 TL Mey İçki San. ve Tic. A.Ş.
2017 fines ranged between
0.1% - 4.2% of undertaking turnovers
Board rejected requests to access investigation files on
Six occasions Although the Board accepted requests to a limited extent in four of these 8
Notable Decisions
TAV Esenboğa
Decision Type: Preliminary investigation
Market: Airport carparking Complainant: Anonymous Assertions: TAV Esenboğa was claimed to hold a dominant position for airport carparking in Ankara, using this to charge excessive prices (Article 6) Board Ruling: Excessive pricing criteria not met, so no further investigation necessary (unanimous)
A complaint alleged that TAV Esenboğa Yatırım Yapım ve İşletme A.Ş. (“TAV Esenboğa”) uses its dominant position in Ankara for airport parking to charge excessive prices and there are no alternative parking spots at the airport area. TAV Esenboğa is an affiliate of TAV Airports Holding A.Ş., which owns multiple airports around Turkey. The Board treats excessive pricing as a special form of abuse of dominance (Article 6), where two conditions: • The enterprise holds a dominant position. • The enterprise’s action have the characteristics of abuse. The Board found that: • TAV Esenboğa’s parking prices are based on the Airport Tender Agreement. • The State Airports Administration (“Administration”) constantly audits TAV Esenboğa. • TAV Esenboğa is entitled to increase or decrease its prices, subject to the Administration’s approval. • Other low-priced parking alternatives have existed near the airport since November 2011.
Based on these findings, the Board decided that neither of the conditions for excessive pricing existed in the case at hand. Accordingly, it unanimously rejected the complaint and declined to investigate the matter further. (decision number 16-22/395-183, dated 29 June 2016; published on the Competition Authority’s website on 13 January 2017)
9
Notable Decisions
Cement Manufacturers in the Eastern Mediterranean
Decision Type: Preliminary Investigation Market: Grey cement in Adana, Mersin, Osmaniye, Hatay, Kilis, Gaziantep and Kahramanmaraş Complainant: Anonymous Assertions: Six cement producers were claimed to be sharing customers and fixing prices for bulk cement Board Ruling: Price movements were likely the result of legitimate factors, so no further investigation necessary (majority)
A complaint alleged that six cement producers in the Eastern Mediterranean region (“Cement Companies”) were sharing customers and fixing prices for bulk cement. The Board considered bulk cement sales for the 2014 to 2016 period in the market, focusing particularly on changes in sales volumes, price movements and other factors affecting cement costs. It considered the undertakings' customer range, particularly focusing on whether customers supplied with cement between January 2014 and May 2016 made purchases from different undertakings. The Board noted: • The amounts and percentages of price increases by separate undertakings in February to April 2016 were not consistent. • Cement prices underwent a slight upward trend in 2014 and 2016 during March and February. However, prices actually decreased in this period in 2015. • Production costs increased in November 2015 to January 2016, with the first price increases following in March 2016. • Demand in February and March 2016 was much higher than in the same period for past years. • In February 2016, demand increased relative to the previous month. Demand also increased again in March 2016.
• •
Demand increase prior to March 2016 (when the alleged violations occurred) were likely to increase prices. Capacity utilization rates were high throughout 2016.
The Board ultimately decided the price movements were likely the result of production cost increases and limited clinker capacities. It concluded that since the Cement Companies have common customers, there was no evidence to support the allegations of customer sharing. Accordingly, the Board rejected the complaint and declined to investigate the matter further. Dissenting Minority Opinion A single dissenting Board member (Fevzi Özkan) argued that almost all of the undertakings increased their prices between February 2016 and April 2016, even if the increases were for different percentages and different quantities. He claimed this is an indicator of concerned practice because it cannot be reasonably explained by other factors.
(decision number 16-33/579-255, dated 13 October 2016; published on the Competition Authority's website on 6 February 2017)
10
Notable Decisions
Chamber of Survey and Cadastre Engineers
Decision Type: Preliminary investigation Market: Survey and cadastre engineering services Complainant: Four individual engineers, operating in Konya Assertions: The Chamber was claimed to be setting quota limitations for engineers for implantation projects Board Ruling: Violation of Article 4, but no further investigation by the Board since the market effects were short and the rule could be relaxed under certain circumstances (majority decision). The Board suggested the Chamber cease its quota limitation practices
11
Notable Decisions
Four individual engineers complained that the Union of Chambers of Turkish Engineers and Architects’ Chamber of Survey and Cadastre Engineers (“Chamber”) has introduced a quota limitation for the number of implantation projects which an individual engineer could undertake. The Chamber is the professional body (with public institution status) for survey and cadastre engineers. Members must operate according to the Chamber’s rules, provided these have some basis in legislation. In September 2016, the Chamber introduced a rule which restricted survey and cadastre engineers to undertaking maximum twenty implantation projects at any time.
However, the Board decided by majority not to initiate a full scope investigation into the matter on the basis that: • The rule aims to prevent problems in the relevant market and ensure operations occur in accordance with the legal framework. • The rule was in force for only a short period. • No sign of market share between members was found. • No distortion of competition was found. • The rule could be relaxed under certain circumstances. The Board ordered the Chamber to cease the project limitation and also indicated that it might take further actions if the Chamber did not cease its quota limitation practices.
Generally, the Board cannot investigate the rules of professional bodies which hold public institution status. However, the Board was able to investigate the project limitation in this context because there was no empowering legislation which gave the Chamber the power to make the rule.
A dissenting opinion argued that a full scope investigation should be initiated into the Chamber on the basis that it was clear the body’s actions violated competition rules.
The Board considered the circumstance and decided the rule qualified as a quota limitation under competition laws and accordingly violated Article 4.
(decision number 17-13/162-70, dated 20 April 2017; published on the Competition Authority’s website on 15 August 2017)
12
Notable Decisions
Siemens Sanayi ve Ticaret A.Ĺž.
Decision Type: Full scope investigation Market: Technical service and spare parts for Siemens brand medical diagnostics and imaging devices (aftersales market) Complainant: SIEMED
.
Assertions: Siemens was claimed to have abused its dominants position via predatory pricing and discriminating between customer groups Board Ruling: Insufficient evidence existed to substantiate the alleged abuse of dominance (Article 6) (unanimous decision)
13
Notable Decisions
SIEMED complained that Siemens Sanayi ve Ticaret A.Ş. (“Siemens”) abused its dominant position in the aftersales market for Siemens brand medical diagnostics and imaging devices by: • Charging different prices to customers with equal status, and • Providing only limited aftersales services to some customers. The Board conducted a preliminary investigation into the complaint in May 2010 and ultimately ruled there was insufficient evidence to show Siemens had breached Article 6 (decision number 10-66/1408-527, dated 21 October 2010). Therefore, the Board decided not to launch a full scope investigation into the allegations. SIEMED appealed the Board’s decision. The 13th Chamber of the Council of State evaluated SIEMED‘s complaint in detail and overturned the Board’s earlier decision not to investigate the matter (decision numbered 2011/317 E., 2015/1454 K, dated 14 April 2015). It ruled that the Board had failed to adequately review the matter and should broaden the scope of its investigation.
The Board defined the secondary market as brandspecific and related to branded equipment in the aftersales market. The Board ruled that Siemens held a dominant position in the brand-specific aftersales market, since this market had a consequential impact on competition in the primary market. The Board found insufficient evidence to prove that Siemens undertook predatory practices by providing only limited aftersales services to some customers. SIEMED also alleged that Siemens applied discriminatory pricing policies, particularly between public and private hospitals. However, the Board’s investigation found that Siemens proposed prices based on a variety of commercial considerations, such as: • Different purchase types (such as open tender procedures in public procurement). • Previous contracts with the customer. • Exchange risks. Therefore, the Board unanimously ruled that Siemens had not abused its dominant position (Article 6).
Accordingly, the Board launch a full scope investigation into SIMED’s complaint in September 2015 A complicated aspect of the Board’s decision was defining the relevant markets. The Board separately defined: • Primary Market: as the market for the sale of medical diagnostics and imaging devices. • Secondary Market: as technical service and spare parts for Siemens brand medical diagnostics and imaging devices.
(decision number 16-34/589-259 dated 24 November 2016, published on the Competition Authority’s website on 20 January 2017)
14
TAV Esenboğa
Luxottica
Decision Type: Full Scope Investigation Market: Sunglasses Complainant: The Cooperative and Confederation of Glasses Manufacturers and Opticians Assertions: Luxottica was claimed to abuse its dominant position by imposing price cut schemes and minimum purchase obligations on customers, as well as other practices Board Ruling: Luxottica’s full line forcing practices abused its dominant market position and violated Article 6 (unanimous) Board Sanction: 1,670,000 ₺ fine, based on 0.75% of Luxottica’s 2015 turnover
315
Notable Decisions
The Cooperative and Confederation of Glasses Manufacturers and Opticians complained that Luxottica had abused its dominant market position via price cut schemes which constituted “full-line forcing”. It also alleged that Luxottica disrupted competition among equal customers by grouping its products and customers into categories, then only providing certain products to certain retailers, as well as requiring minimum order numbers (Article 6).
The Board also found that to purchase from one category of sunglasses, Luxottica would require customers to purchase a certain number of sunglasses from other categories, a practice known as full line forcing. For instance, a customer wishing to purchase Ray Ban sunglasses (Luxottica’s most popular brand), would not be supplied unless it also agreed to purchase sunglasses from Luxottica’s less popular brands.
The Board examined Luxottica’s alleged market dominance. It ruled that Luxottica holds a dominant position in the sunglasses market on the basis that it: • Is the market leader, with a market share far larger than the second market player • Owns and holds licenses for a significant number of luxury sunglass brands.
The Board held that Luxottica had abused its dominant market position via its full line forcing practices. It noted that Luxottica’s supply strategy left retailers with more supply than they needed and exhausted their financial resources.
The Board’s investigation found that Luxottica grouped its customers (retailers) and products into categories, then restricted sales along these lines. For instance, it would not sell certain “high” category sunglasses to customers in “low” categories.
(decision Number 17-08/99-42, dated 23 February 2017; published on the Competition Authority’s website on 11 August 2017)
1 16
Notable Decisions
Decision Type: Full scope investigation
Market: Energy Complainant: Eltesan Mobil Teknoloji Sistemleri San. ve Tic. A.Ş.
Artı Marin Elektrik Dış Ticaret Ltd. Şti.
Assertions: Artı Marin and Mastervolt were claimed to have taken measures aimed to prevent Eltesan’s parallel imports of Mastervolt products from Europe. Board Ruling: No agreement existed between Artı Marin and Mastervolt which violates Article 4 (unanimous decision)
Mastervolt International Holding BV (“Mastervolt”) is a Netherlands-based producer of energy systems. Artı Marin Elektrik Dış Ticaret Ltd. Şti. (“Artı Marin”) is Mastervolt’s authorized Turkish distributor. Eltesan imports Mastervolt products from authorized distributers in Austria and Germany, where the products are cheaper than Artı Marin’s prices in Turkey. Eltesan complained that Artı Marin and Mastervolt restricted competition by agreeing to prevent Eltesan from buying Mastervolt products in Europe and selling them in Turkey, by asserting to Mastervolt’s European authorized distributors that Eltesan was undertaking parallel imports. The European Union market comprises all of its member states’ individual domestic markets. Therefore, regional legislation aims to prevent parallel imports, to maintain consistent prices for consumers across all domestic markets in the European Union. However, competition regulations may have different results for Turkey, since the country has a single domestic market.
17
The Board found that Mastervolt had advised Artı Marin that it is impossible to prevent all Turkish resellers from selling Mastervolt products and regardless, there had been no significant drop in Eltesan’s sale of Mastervolt products. The Board found that Artı Marin and Mastervolt had reached a consensus to prevent Eltesan’s parallel imports of Mastervolt products. However, it noted that for this consensus to constitute a breach of Article 4, an agreement aiming to restrict competition must exist between Artı Marin and Mastervolt. The Board ruled that Artı Marin had not violated Article 4 since the evidence and available data were insufficient to conclude that: • Artı Marin and Mastervolt have an agreement breaching Article 4, and • The market was affected by this agreement.
(decision number 16-16/278-122, dated 11 May 2016; published on the Competition Authority’s website on 9 January 2017)
Notable Decisions
Turkish Pharmacists' Association
Decision Type: Full Scope Investigation. Market: Procuring pharmaceutical products from abroad
Complainant: İlaç Dağıtım Merkezi Ltd. Şti Assertions: The Association was claimed to abuse its dominant position in procuring pharmaceutical products from abroad via exclusivity provisions Board Ruling: The Turkish Pharmacists' Association violated Article 6 (unanimous decision) Board Sanction: 18,062,307 ₺ fine, based on 1.5% of turnover (includes 0.5% due to prolonged nature of violation)
İlaç Dağıtım Merkezi Ltd. Şti complained that the Turkish Pharmacists' Association (“Association”) and Turkish Pharmacists' Association Commercial Enterprise (“Enterprise”) abused their dominant positions while procuring pharmaceutical products from abroad. The Association owns the Enterprise, so according to competition law, they are deemed to be the same undertaking. The Association was previously the sole entity authorized under the Guideline for Procurement of Pharmaceuticals from Abroad (“Guideline”) to provide pharmaceutical products in Turkey which aren’t licensed or aren’t commercially available. However, amendments to the Guideline in 2014 meant private pharmaceutical warehouses could also supply pharmaceutical products from abroad. The Board found that although warehouses were legally granted authority, in reality the Association’s dominant market position meant these warehouses could not effectively operate in this field. The Board found that due to exclusivity arrangements with the Association, the Social Security Institution would refuse to sign protocols with pharmaceutical warehouses, meaning they could not access the market. The Guideline was subsequently amended again, revoking the authority of private pharmaceutical warehouses and reinstating the Association as the sole supplier.
The Board found that the Enterprise’s agreements with pharmaceutical suppliers contained exclusivity provisions which required the suppliers to engage only with the Enterprise. The exclusive nature of these agreements dramatically decreased opportunities for pharmaceutical warehouses to access the pharmacy market.
The Board decided the Enterprise’s dominant position damaged consumers because it meant they had no method of obtaining products from other sources. It noted that establishing a competitive market for supplying pharmaceutical products from abroad is in the public interest because it would: • Improve the quality of these services. • Provide alternative products to consumers. • Reduce the need for illegal and counterfeit medication. Accordingly, the Board ruled that the Enterprise had abused its dominant position and also decided to send a letter to Ministry of Health and Social Security Institution regarding opening the market up to competition.
(decision number 16-42/699-313, dated 6 December 2016; published on the competition Authority’s website on 8 June 2017)
18
Notable Decisions
Dow Chemical Company Turkey
Decision Type: Full Scope Investigation.
Market: Acrylic ester Complainant: Anonymous Assertions: Dow was claimed to abuse its dominant position by refusing to supply chemicals Board Ruling: Dow does not have a dominant position, so did not violate Article 6 (unanimous decision)
19
A complainant alleged that Dow Türkiye Kimya Sanayi ve Ticaret Ltd. Şti. (“Dow”) had abused its dominant position in the acrylic ester market, which is an essential product for the chemical industry. Dow was claimed to have abused its dominant position by: • Undertaking price discrimination between its affiliates and rivals by selling acrylic ester to its rivals at above market rates. • Restricting procurement of acrylic ester, which caused a barrier to market entry for some companies. • Entering long term and binding agreements which included special offers and discounts with customers which operate in the international market, effectively hindering rivals from entering the Turkish market.
Notable Decisions
The Board stated that for a refusal to supply to constitute a breach of Article 6: • The undertaking must hold a dominant position in the relevant market. • The undertaking must not have an objective justification for the refusal. • The refused products must be crucial for competing in the downstream market. • The refusal is likely to hinder competition in the downstream market. • The refusal is likely to create disadvantages for the consumers. The Board unanimously concluded that Dow had not breached Article 6 on the basis: • Dow's market position was not strong enough to be considered dominant. The Board assessed Dow’s market share and operations based on reports by the Turkish Statistical Institute (TÜİK), as well as e-mails and opinions offered by other undertakings operating in the chemical market.
• • •
•
Dow had objective justifications to refuse supply. Customers can obtain acrylic ester from alternative suppliers; Dow is not the sole supplier of this chemical. Although Dow was involved in operations in the downstream and upstream markets (vertical integration), this was unlikely to hinder competition in the downstream market. The indispensability condition was not met and products could be obtained from other market operators.
(decision number 16-33/586-257, dated 13 October 2016; published on the competition Authority’s website on 20 January 2017)
18 20
Notable Decisions
Booking.com B.V.
Decision Type: Full Scope Investigation Market: Online hotel booking platforms Complainant: Association of Turkish Travel Agencies Assertions: Booking.com’s “Best Price Guarantee“ practice was claimed to restrict competition Board Ruling: Booking.com violated Article 4 by its agreements with accommodation facilities including: • Price and quota parity clauses • Most Favored Customer Clauses
Board Sanction: 2,543,992 ₺ fine
35 21
The Association of Turkish Travel Agencies complained that Booking.com B.V. restricted competition by its agreements with accommodation facilities including price and quota parity provisions, as well as most favored customer clauses (“MFC Clauses”). The MFC Clauses discouraged accommodation facilities from offering lower prices or more rooms on other online booking platforms, or within their internal platforms. The Board ruled that MFC clauses should not be considered as a per se competition law infringement. Rather, all positive and negative aspects of the clauses in question should be evaluated, along with proper analysis of their effects on the relevant market and its actors. The Board noted the effects of Booking.com’s MFC Clauses as outlined in the table on the next page.
1
Notable Decisions
Pro-competitive • • • • •
Promotes commercial investments. Reduces transaction costs. Encourages demand certainty, since buyers do not need to delay purchases while they seek better prices. Encourages efficient production and capacity decisions due to demand certainty. Avoids free-rider problems.
After balancing these factors, the Board ruled that the MFC Clauses in Booking.com’s agreements with accommodation facilities are anticompetitive and breach Article 4. The Board can exempt an agreement, concerted practice, or decision from Article 4 if it: • Ensures new developments and improvements, or economic or technical development in production or distribution of goods, or provision of services, • Benefits consumers • Does not limit competition more than is necessary to achieve the goals above, and • Does not eliminate competition in a significant part of the relevant market. However, in these circumstances, the Board ruled that Booking.com could not benefit from this exemption because its market share exceeded 40% of the online hotel booking platform market (Block Exemption Communique number 2002/2).
Anti-competitive • • • •
Reduces price competition. Ensures price stability. Creates obstacles to market entry by raising competition and entry costs. Causes unwillingness for accommodation which uses the Booking.com platform to offer lower prices to customers.
Dissenting Opinion One Board member (Fevzi Özkan) gave a dissenting opinion saying the fine breaches legal certainty and predictability, because there has been no Board decision before the investigation into Booking.com where the body had ruled that MFC Clauses breached competition law. The dissenting Board member noted that the Italian and German competition authorities which investigated Booking.com’s MFC Clauses had not imposed any sanctions on the company, in similar cases.
(decision number 17-01/12-4 dated 5 January 2017, published on the Competition Authority’s website on 26 May 2017)
3622 1
Notable Decisions
Yemeksepeti
Decision Type: Full scope investigation Market: Online food ordering platform services (excluding websites, telephone services, or restaurants’ own websites, which simply offer menus, prices and contact information, or enable customers to make reservations). Complainants: • Bolbol Gıda ve İnternet Hizmetleri A.Ş. • Grand Fast-Food – Hakan İmay • Anonymous party
21 1 23
Assertions: Yemeksepeti abused its dominant market position various non-competitive practices Board Ruling: Yemeksepeti’s Most Favored Customer practices violated Article 6 Board Sanction: 427,977 ₺ fine, plus Yemeksepeti was ordered to terminate all related practices and revise agreements within 120 days
Notable Decisions
The first time the Board recognizes price parity clauses as potentially violating competition laws
Yemeksepeti is an online platform, enabling customers to make takeaway food orders from restaurants. The Board initiated an investigation into Yemeksepeti based on complaints from its competitors. Various allegations were made about Yemeksepeti, such as claims that the company: • Hindered restaurants from offering lower prices. • Gave different exclusive offers to different restaurants. • Threatened restaurants with higher commission rates if they worked with other online platforms. • Threatened restaurants with removal or suspension from the Yemeksepeti platform if they worked with other online platforms. The Board’s decision in this matter is the first time it has recognized the exclusionary effects of Most Favoured Customer Clauses (“MFC Clauses”) in Turkey. MFC Clauses are effectively price protection mechanisms within supply contracts. Their effect is that sellers or suppliers cannot offer lower prices or advantageous conditions to other customers, without also offering the same conditions to the contracting customer. The Board found that Yemeksepeti’s actions fell into four groups, which aimed to respectively: • Stop promotional activities on rival platforms. • Acquire sales and promotions from rival platforms. • Lead restaurants to terminate their relations with rival platforms. • Introduce other favourable conditions to Yemeksepeti. The Board noted two major advantages of being the first actor in this market: • Sunk costs for creating customer loyalty. • The network effect, whereby companies which have a powerful market position become more powerful, while small companies become smaller.
The Board explained that whether a MFC Clause violates Turkish competition law will depend on the relevant market’s features and the provision’s substance. In this case, the Board ruled that: Yemeksepeti holds a dominant position. • It is important for new players in this market to include well-known and preferred restaurant chains on their platforms, in order to expand their respective customer base. • The network effect amplifies the exclusionist effects of MFC Clauses, because for small restaurants being available on the Yemeksepeti platform is beneficial for their advertisement. Therefore, these provisions and the company’s implementation of them were considerably onerous and acted as a disincentive for small restaurants. • The scope of Yemeksepeti's MFC Clauses increased after 2014. • Yemeksepeti’s acts exceeded the substance of the MFC Clauses. For instance, some provisions stated that if a restaurant offered a better deal on their own website, or on a rival platform, the restaurant must also make the offer via the Yemeksepeti platform. However, in practice Yemeksepeti would force restaurants to terminate agreements with rival platforms, or close their own websites.
Consequently, the Board ruled that Yemeksepeti’s MFC practices made it difficult to enter the market and continue to operate, constitution an abuse of dominance. The Board ordered Yemeksepeti to terminate all MFC practices and revise its agreements within 120 days.
(decision number 16-20/347-156, dated 9 June 2016; published on the Competition Authority’s website on 13 January 2017)
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Notable Decisions
Computer and Console Games, Plus Consumer Electronics
Decision Type: Full scope investigation Market: • Computer and Console Games • Consumer Electronics Complainant: Anonymous. Board Sanction: • Computer and Console Games: 23,867,878 in fines against six companies • Consumer Electronics: 30,458,753 in fines against five companies
21 1 7 25
Notable Decisions
The Board a preliminary The first initially time conducted the Board recognizes investigation into six parties in the computer and pricegames parity clauses as the potentially console market. During this, Board also found evidence indicating possible violations in the violating competition laws consumer electronics market, so it extended the investigation on an ex oficio basis to include five further parties (11 total). Therefore, while the two markets are not strictly connected, the investigated parties are. The Board imposed different penalties for different competition violations.
Computer and Console Games An anonymous complaint alleged that seven companies were working together to restrict competition in the computer and console game market. Aral Oyun Konsol ve Aksesuar Ticaret A.Ş. (“Aral”) is the only distributor of computer and console games in Turkey. The other companies are retailers, selling games to consumers. The complaint alleged that Aral has been determining the retail price for selling computer and console games to consumers. The Board’s investigation found that each retailer had separately told Aral that their competitors’ prices were low and requested Aral raise prices for these competitors. The Board found that asking Aral to directly intervene in this way suggested the retailers deemed Aral as being capable of price intervention. The Board found no evidence of indirect communication between the competing retailers. Therefore, it ruled that market communication had not reached the level of horizontal agreement, which would be considered a cartel arrangement.
Company Aral Oyun Konsol ve Aksesuar A.Ş. Doğan Müzik Kitap Mağazacılık Pazarlama A.Ş. Vatan Bilgisayar San. ve Tic. A.Ş. Teknosa İç ve Dış Tic. A.Ş. Kliksa İç ve Dış Tic. A.Ş. Gold Teknoloji Marketleri San. ve Tic. A.Ş.
Bimeks Bilgi İşlem ve Dış Tic. A.Ş.
Rather, the Board approached the circumstances and complaint as a “Hub and Spoke” arrangement. In such violations, the "hub" entity obtains competition sensitive information from a "spoke" entity, then shares it with other spoke entities. In this case, Retailer A (spoke) complains to Supplier B (hub) about Retailer C’s prices (spoke). If Supplier B changes its behavior towards Retailer C, the circumstances could be deemed to be a competition restriction.
For sharing competition sensitive information to be deemed a breach of hub and spoke rules, the party impacted by the shared information must: • Be aware of the communication, and • Know (or foresee that) the price increase originated from its competitors. The Board’s investigation discovered a range of communications between Aral and the seven retailers (from 2011 to 2015), which generally aimed to increase or protect the retail prices of computer and console games. Thus, the Board found evidence of the retailers each entering agreements with Aral, with the intention to increase retail prices and restrict price competition, amounting to a breach of Article 4. Accordingly, the Board unanimously fined the parties as below.
Board’s decision
Fine
Restrictive agreement violated Article 4
863,538 ₺ 2,307,544 ₺ 10,363,565 ₺ 7,651,563 ₺ 1,192,116 ₺ 1,489,549 ₺
Insufficient evidence to show violation of Article 4
Not applicable
26 1
Notable Decisions
Determining resale prices Vestel The Board ruled that the evidence showed Vestel: • Specified the resale price for retailers, such as Teknosa, MS, Bimeks, and Hepsiburada. • Monitored retailers which had discounted prices lower than the specified amounts and issued warnings. • Advised its retailers that: • Resale prices are unchangeable. • Sanctions will apply if retailers continue discounting prices.
Consumer Electronics The Board considered claims about “hub and spoke” violations in the consumer electronics market, via: • Price fixing agreements. • Determining resale prices. Arguments submitted to the Board alleged that LG actively observed the market in a particular province, then charged retailers different prices. The complaint also alleged that LG used phrases with retailers such as such as “recommended sales prices” or “campaign prices” to avoid breaching competition rules.
Price Fixing Agreements The Board found that Teknosa and MS had each asked LG to intervene on their competitors’ prices and LG had acted on these requests. Therefore, the Board ruled that LG was: • Determining prices for its consumer electronics products. • Limiting price competition. The Board noted that if a competitor retailer actually decreased its prices at LG’s request, LG would sometimes subsidize the difference by decreasing its own profit margin.
Accordingly, the Board ruled that LG had agreed with Teknosa and MS to fix retailer prices and therefore all three entities had violated Article 4.
Company LG Electronics Tic. A.Ş. MS İstanbul İç ve Dış Tic. Ltd. Şti. Teknosa İç ve Dış Ticaret A.Ş.
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The Board ruled that these actions were a direct determination of resale prices by a supplier, in violation of Article 4. Philips The Board found no price fixing provisions in the agreements between Philips and its retailers. However, it found that other documents revealed that Philips had been determining prices in practice. The Board found evidence showing Philips had restricted brand competition by taking actions to prevent resale prices being determined under free competition conditions. The price determination meant consumers faced higher prices for Philips branded products, due to the limited competition within the brand. Therefore, the Board decided by majority that Philips had violated Article 4. Accordingly, the Board issued fines by a majority vote to the parties as follows: Company Vestel Ticaret A.Ş. Türk Philips Ticaret A.Ş.
Fine 8,024,370 ₺ 1,255,290 ₺
Two dissenting Board members stated that the Board should approach its consideration of whether a party determined resale prices based on the rule of reason. Therefore, they stated that defenses had not been thoroughly considered.
Fine 6,221,201 ₺ 5,776,015 ₺ 9,181,876 ₺
(decision numbered 16-37/628-279, dated 7 November 2016; published on the Competition Authority’s website on 15 March 2017)
Notable Decisions
4
Notable Decisions
Turkcell
Market: GSM network Issues: Reevaluation of an earlier decision in light of new documents and statements submitted by a witness Board Ruling: New documents and statements have no effect on the decision (majority decision). Criminal complaint filed for making false statement
Mobile phone operator, Turkcell İletişim Hizmetleri A.Ş. (“Turkcell”), was alleged to have abused its dominant market position via actions towards distributers and dealers. MTK is an individual who submitted information against Turkcell to the Board at the preliminary investigation stage. He attended a complainants’ meeting with case-handlers and made statements against Turkcell. The Board ultimately ruled against Turkcell in June 2011, fining the company 91,942,343 ₺ (decision number 11-34/742230). Turkcell appealed the Board’s decision to the Council of State. During these procedures, MTK submitted a petition and a notarized statement confessing to earlier providing misleading information and false statements. He claimed all of his statements and information were untrue and he had been tempted by the complainants’ offers to act against Turkcell (Council of State file number 2011/4540). The Authority’s legal department asked the Board to provide an opinion on whether MTK’s statements would change the merits of the case, as well as an assessment of MTK’s wrongful acts within the Competition Law’s scope.
29
The Board reviewed the investigation report and concluded that it was satisfied that MTK’s misleading statements had not impacted the decision’s outcome. It noted that: • MTK was not one of the complainants in the case. • MTK was a Turkcell dealer, whose statements had only been recorded in one set of meeting minutes. These statements had no prominent effect on the Board’s assessment and determinations in the investigation report. • Neither MTK’s name, nor the company which he acted as an unauthorized signatory for (“Company”), were included in the investigation report. • The Board’s decision had been based on extensive assessment and analysis of information and documents from: • On-site inspection • Interviews with other market actors • Statements by Turkcell’s dealers • Precedents from the EU Commission and US Supreme Court.
1
Notable Decisions
A potential shift in the Board’s stance on the admissibility of employee statements
The Board noted that rules regarding submission of misleading information only apply to undertakings. It ruled that since MTK is a natural person, who does not operate as an economical entity by himself, MTK could not be deemed to be an undertaking and had therefore not breached the relevant provisions of the Competition Law. Liability of Unauthorized Signatories under the Competition Law The Board also considered the relation between MTK and the Company, on the basis that MTK acted as an unauthorized signatory for the Company and submitted misleading information to the Board. The Board held that MTK has no liability under the Competition Law because he could not legitimately represent or bind the Company. However, the Board noted that MTK’s actions could violate the Turkish Criminal Code in terms of giving false statement when preparing official documents, as well as slander. Thus, the Board decided to file a criminal complaint against MTK via the public prosecutor’s office.
The Board’s decision suggests the binding nature of statements by employees of investigated undertakings depends on whether he/she has official capacity to bind the relevant undertaking. This indicates a shift in the Board’s established approach to admissibility of employee statements. If the Board continues to adopt this approach, it could mean employee statements will lose their importance as evidence. The Board could be argued to unnecessarily limiting the scope of its own powers. Dissenting Minority Opinion The decision’s dissenting minority opinions argue that: • The Board is not required to limit information to employees who have the power to officially bind the undertaking. • MTK was de facto representing the Company and an organic link existed. (decision number 16-17/285-128, dated 18 May 2016; published on the Competition Authority’s website on 16 January 2017)
30
Notable Decisions
Türk Philips Ticaret A.Ş.
Decision Type: Full Scope Investigation
Market: Medical devices (sales, maintenance and repair) Complainant: Two confidential complainants Assertions: Türk Philips Ticaret A.Ş. was claimed to undertake price discrimination, offering different prices to customers in an equivalent position (Article 6) Board Ruling: No evidence found to support allegations, so no further Board examination necessary (unanimous)
Türk Philips Ticaret A.Ş. (“Philips”) imports medical imaging and diagnostic devices to Turkey, along with related spare parts. Two complaints (which requested their identity remain confidential) alleged that Philips abused its dominant position through price discrimination between customers. The claimants alleged respectively that Philips offered hospitals different prices for purchasing equipment (around 2.5x higher), as well as purchasing spare parts. The Board noted that for a dominant entity’s pricing practices to be considered a competition law violation, these must have an actual or possible effect on the entity’s competitors. That is, the pricing practices must create an exclusionary effect for competitors in terms of size, continuity and scope. After reviewing 387 of Philips’ price offers to customers, the Board ruled that no further examination was necessary. The Board held that it did not find evidence of the alleged large pricing differences. (decision number 16-33/587-258, dated 13 October 2016; published on the Competition Authority’s website on 20 January 2017)
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Notable Decisions
İzmir Jewellery Chamber
Decision Type: Full Scope Investigation Market: Jewellery Complainant: Anonymous Assertions: The Chamber was claimed to restrict competition by fixing the price of gold and imposing sanctions on chamber members (jewellers) for failing to use this price Board Ruling: The Chamber violated Article 4 (unanimous decision) Board Sanction: 4,750 ₺ fine, based on 2,25 % of turnover (includes 0.5% due to prolonged nature of violation)
A complaint alleged the İzmir Jewellery Chamber (İzmir Kuyumcular Odası; “Chamber”) restricted competition by fixing the price of gold and imposing sanctions on chamber members (jewellers) for failing to use this price. The Chamber has approximately 1,000 members. Its role is to cooperate with jewellers, determine professional principles and standards, as well as resolve industry problems. The Board began investing the Chamber in 2015 and during the investigation it noted: • Since the Chamber elected a new board in 2014, detailed decisions had been made about productbased prices and discount rates, as well as strictly controlled. • Signage announcing recommended gold prices had been erected in all jewellery shops. • Members were regularly audited regarding their compliance with recommended prices. • If a member failed to use the recommended gold price, the Chamber would fine the member five gold coins, or ten coins for repeat offences. • The Chamber prevented wholesalers from entering the retail market, to avoid competition. The Board considered whether the Chamber’s actions indicate an agreement, within the scope of Article 4. Ultimately, it concluded that the Chamber’s recommended prices and audits lead to price fixing within the meaning of Article 4 since the Chamber has been the determinative power.
Employee statements The Board considered whether documents which the Chamber circulated to its members should be considered to be an agreement within the scope of the Competition Law, even though they are unsigned or signed by employees who do not have official representative capacity. The Board stated that written or verbal agreements will be deemed to be an agreement within the scope of competition law if they: Are concluded with the parties’ knowledge. Have restrictive effects on competition. The Board’s approach to employee statements here contradicts its earlier approach in the Turkcell Decision (see page 29), where the Board suggests the binding nature of employee statements depends on whether he/she has the official capacity to bind the company.
(decision number 16-35/603-268, dated 27 October 2016; published on the Competition Authority’s website on 18 January 2017)
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Short Form Decisions
Short Form Decisions Published in 2017
The Board issued a number of administrative fines during 2017, with the reasoning behind these sanctions to be published at a later date. The following is a selection of notable recent decisions.
Abuse of Dominant Market Position Undertakings Ankara Uluslararası Kongre ve Fuar İşletmeciliği Merkezi A.Ş.
Türk Telekomünikasyon A.Ş.
Volkan Yolcu Taşımacılığı Seyahat Nakliyat Tic. A.Ş. (Volkan Yolcu Taşımacılığı) Öz Edirne Birlik Mustafa Altunhan (Öz Edirne Birlik)
7
Allegation
Board Decision
Abuse of dominant position by refusing to deal without legitimate reasons.
• •
Abuse of dominant position by refusing to deal without legitimate reasons.
• •
Abuse of dominant position by • Refusing to deal at the Edirne Bus Terminal without legitimate reasons. • Exclusionary practices.
• •
•
•
• •
Violation of Article 6. Fined 268,043 ₺; 1.5% of gross 2015 income. Long Form Decision published March 2017. Violation of Article 6. Fined 33,983,793 ₺; 0.45% of gross 2015 income. Long Form Decision published January 2017. Violation of Article 6 Volkan Yolcu Taşımacılığı fined 733,246 ₺; 2.25% of gross 2016 income. Öz Edirne Birlik fined 31,986 ₺; 1,5% of gross 2016 income. Long Form Decision published January 2018
Short Form Decisions
Restrictive Trade and Concerted Practices Undertakings
Allegation
3M Sanayi ve Ticaret A.Ş.
• • •
Four undertakings operating in the tourism sector
• •
Board Decision
Resale price maintanance Imposing geographical. restrictions on dealers. Exclusionary practices, such as discriminatory rebates for certain dealers.
• •
Concerted practices. Applying exlusionary practices on competitiors.
• •
•
• • Öz Maya Sanayi A.Ş
Concerted practices to increase prices in fresh yeast market
• • •
Violation of Article 4. Total combined fines of 2,115,839 ₺; 0.5% of gross 2013 income. Long Form Decision published January 2017.
Violation of Article 4. Three undertakings fined a total of 8,250,558 ₺; 0.35 % of gross 2015 incomes. One undertaking fined 77,411 ₺; 0.2% of gross 2015 income. Long Form Decision published March 2017. Violation of Article 4. Fined 3.836.091 ₺; 1.8 % of gross 2013 income. Long Form Decision published April 2017.
Submitting Misleading Information to the Competition Authority Undertakings Türk Telekomünikasyon A.Ş.
Adiyaman Chamber of Commerce and Industry
Allegation
Board Decision
Brought wrong or misleading documents to an investigation into possible abuse of dominance through tariff pricing and special offers.
• •
Provided wrong or misleading information to an investigation into possible concerted practice through tariff pricing.
• •
•
•
Violation of Article 6. Fined 7,551,954 ₺; 0.01% of gross 2015 income. Long Form Decision published January 2017.
Violation of Article 16. Fined 18,577 ₺, the minimum fine stipulated for 2017 Long Form Decision published July 2017.
34
Investigations
Investigations Launched in 2017
The Board initiated a number of new investigations during 2017. The following is a selection of notable investigations recently launched by the Board.
Undertakings
35
Allegation
Doğan Müzik Kitap Mağazacılık ve Pazarlama A.Ş.
Abuse of dominant position through exclusionary practices (Article 6).
Türk Henkel Kimya Sanayi ve Ticaret A.Ş.
Restrictive trade practices and concerted practices through resale price maintanance (Article 4).
Diye Danışmanlık Eğitim ve Medya Hizmetleri Tic. A.Ş.
Abuse of dominant position through purchasing cartel (Article 6).
Çelebi Bandırma Uluslararası Limanı İşletmeciliği A.Ş.
Abuse of dominant position through excessive pricing to Ro-Ro undertakings.
Karsan Otomotiv Sanayi Mamülleri Pazarlama A.Ş.
Restrictive trade practices and concerted practices by restricting passive sales and resale price maintanance (Article 4).
Six meal ticket companies
Restrictive trade practices and concerted practices by bidrigging, exclusionary practices (Article 4).
19 undertakings operating in the poultry sector and Beyaz Et Sanayicileri ve Damızlıkçıları Birliği Derneği
Restrictive trade practices and concerted practices (Article 4).
Mobile Communication Companies: • Turkcell İletişim Hizmetleri A.Ş. • Vodafone Telekomünikasyon A.Ş. • Avea İletişim Hizmetleri A.Ş.
Abuse of Dominant Position by Exclusionary Practices (Article 6)
Sony Eurasia Pazarlama A.Ş.
Restrictive trade practices and concerted practices by resale price maintanance(Article 4).
Tourism and Insurance Companies: • Türkiye Seyahat Acentaları Birliği • TÜRSAB Seyahat Acentaları Hizmetleri Tic. Ltd. Şti. • Turser-Tursav Sigorta Acenteliği Ltd. Şti. • Gulf Sigorta A.Ş.
Bundling.
Radontek Medikal İthalat İhracat San. ve Tic. Ltd. Şti.
Abuse of dominant position by excessive and discriminatory pricing (Article 6).
İstanbul Elektronik Haberleşme ve Altyapı Hizmetleri San. ve Tic. A.Ş.
Activities related to electronic communication operator infrastructures.
Ro-Ro Companies: • Tramola Gemi İşletmeciliği ve Ticaret A.Ş. • Kale Nakliyat Seyahat ve Turizm A.Ş. • İstanbullines Denizcilik Yatırım A.Ş. • İstanbul Deniz Nakliyat Gıda İnşaat Sanayi Ticaret Ltd. Şti. • Kabotaj Hattı RoRo ve Feribot İşletmecileri Derneği
Restrictive trade practices and concerted practices through price-fixing agreements (Article 4).
Investigations
Undertakings
Allegation7
Seven electricity distribution companies
Abuse of dominant position through discriminatory practices (Article 6). The Board’s traditional approach to electricity distribution companies has been to not initiate full-fledged investigations.
TTNET A.Ş.
Abuse of dominant position through internet and TV packages (Article 6).
16 LPG dealers in the Adiyaman city center
Concerted practice by price agreements (Article 4).
Mercedes-Benz Türk A.Ş.
Abuse of dominant position through rebate schemes for concrete pumps and concrete trucks.
• • •
• •
Abuse of dominant position (Article 6). Restrictive trade practices and concerted practices (Article 4).
Two shipping companies: • Zeyport Zeytinburnu Liman İşletmeleri Sanayi ve Ticaret A.Ş. • S.S. Gemi Tali Acenteleri Deniz Motorlu Taşıyıcıları Kooperatifi
• •
Abuse of dominant position (Article 6). Restrictive trade practices and concerted practices (Article 4).
Three oil companies: • OMV Petrol Ofisi A.Ş • Milan Petrol San. Tic. A.Ş. • TP Petrol Dağıtım A.Ş.
• •
Abuse of dominant position (Article 6). Restrictive trade practices and concerted practices by limiting freedom of contract (Article 4).
Google Inc. Google International LLC Google Reklamcılık ve Pazarlama Ltd. Şti.
Sahibinden Bilgi Teknolojileri Pazarlama ve Ticareti A.Ş.’
Abuse of dominant position by excessive and discriminatory pricing in online real estate sale/leasing (Article 6).
Eight road security companies
Restrictive trade practices and concerted practices by bidrigging and price-fixing (Article 4).
Microsoft Bilgisayar Yazılım Hizmetleri Ltd. Şti.
Abuse of dominant position (Article 6).
Roche Müstahzarları San. A.Ş.
• •
Maysan Mando Otomotiv Parçaları San. ve Tic. A.Ş.
Refusal to supply and exlusionary practices.
Six pharmaceutical companies manufacturing chemotherapy products
Concerted practices through bid-rigging (Article 4).
V.O.S.S. VARİNAK Onkoloji Sistemleri Satış ve Servis A.Ş.
Abuse of dominant position (Article 6). Restrictive trade practices and concerted practices (Article 4).
Abuse of dominant position (Article 6).
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Developments
Changes to the Merger Control Regime
Turkey has changed merger control requirements for mergers and acquisitions. Changes introduce new circumstances when parties can notify the Board after a transaction has realized. Certain transactions within a three-year period will now also be viewed as a single transaction for purposes of turnover threshold calculations. The Communiqué Amending the Communique on the Amendments Made to the Communiqué Concerning the Mergers and Acquisitions Calling for the Authorization of the Competition Board was published in Official Gazette number 29989 on 24 February 2017, entering into force on the same date.
9
Notable changes include: • The Board can now be notified after a transaction is realized in certain circumstances if control of the related undertaking is obtained via security purchases made by different sellers through serial transactions in the stock exchange (Article 10). Accordingly, such post-transaction notification can occur if: • The transaction is notified to the Board without delay; and • Voting rights attached to the securities are not exercised or such rights are exercised according to an exception recognized by the Board in order to ensure the full value of the investments are maintained • Calculation methods for determining each transaction party’s turnovers have changed (Article 8). Accordingly, two or more transactions by the same persons, parties, or undertaking, within the same related product market, within a three-year period will now considered to be a single transaction, in terms of party turnovers under Article 7. • The Board’s obligation to re-establish the thresholds for merger and acquisition transactions every two years has been repealed (Article 7(2)).
Developments
Consumer Courts Have Jurisdiction for Compensation Cases Against Bank Cartel
Turkey’s Court of Cassation ruled that the Consumer Court is the appropriate forum for a lawsuit filed by a consumer against a bank, where the plaintiff sought compensation for damages arising from the bank’s competition law violation. The dispute arose from a consumer credit agreement. Accordingly, the highest body within Turkey’s Court of Cassation held that the Consumer Court should have jurisdiction to hear the case, rather than the Commercial Court. In 2013, the Board ruled that a group of banks formed a cartel for consumer deposit, credit cards and credits services, violating Article 4 of the Competition Law. The Board ruled that the banks must compensate all damages arising from the violations (Article 57, Competition Law). The courts can award compensation for breaches amounting to up to three times the damages incurred, or profits derived by the breaching party (Article 58, Competition Law).
In the case at hand, the plaintiff initiated a case at the Ankara 9th Consumer Court, seeking 3,300 ₺ from a bank which had been included in the Board’s cartel ruling. The claimed amount represented three times the amount for credits, credit cards and services provided by the bank, which would not have been paid if the bank was not involved in competition law violations between 2007 and 2011(i.e. the difference between the actual amount paid by the plaintiff to the bank and the amount required to be paid if the bank was not involved in competition law violations). The Consumer Court ruled that it did not have jurisdiction for the dispute and the matter should be referred to the commercial court of first instances. The plaintiff appealed the Consumer Court’s nonjurisdiction decision.
At the end of appeal process, the 13th Civil Chamber of the Court of Cassation ruled that the contractual relationship between the plaintiff and the bank falls within the scope of Consumer Protection Law number 6502 (“Consumer Law”) because the dispute arises from consumer credit agreements between the parties. Accordingly, it overturned the Consumer Court’s non-jurisdiction decision and sent the dispute back to the Consumer Court for reconsideration. In reaching its decision, the higher court emphasized: • “Consumer” is defined as being a real or legal person, acting without commercial or professional purpose (Article 3, Consumer Law) • “Consumer transaction” is defined as all types of agreements and legal transactions between real or legal persons acting with commercial or professional purposes in the goods and service market (Article 3, Consumer Law) • Consumer courts have jurisdiction to adjudicate all disputes arising out of execution of the Consumer Law (Article 73, Consumer Law) • Even if a legal transaction is stipulated in the Consumer Law, related disputes are not always required be heard by consumer courts • For a legal transaction to fall within the scope of the Consumer Law, one of the parties must fit the definition of “consumer”.
13th Civil Chamber of Turkish Court of Cassation decision number 2016/12718 E. and 2016/18811 K., dated 19 October 2016.
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Developments
Competition Board Signals Information Transfers in the Insurance Market May Require Individual Exemptions
The Board published a decision about a negative clearance/individual exemption application for an agreement between two competing insurance companies which decision signals that co-insurance and re-insurance agreements between competitors should be considered competition law sensitive. As a result, related information transfers, which are common in the insurance market, may require a reevaluation from a competition law perspective.
The Agreement The agreement in question outlines co-operation between Aksigorta A.Ş. (“Aksigorta”) and Acıbadem Sağlık ve Hayat Sigorta A.Ş. (“Acıbadem”), regarding co-insurance, re-insurance and operational services. Notably, it involves agreement that Acıbadem would: Provide services to Aksigorta in operational matters related to existing health products. • Develop a new product to be sold and delivered to customers under the Aksigorta brand. • Provide services to develop a health insurance product, which Aksigorta would sell. • Co-insure and re-insure Aksigorta’s health insurance products. The specific agreement provisions are not included in the Board’s decision. However, the decision reveals that the agreement contains restrictive provisions regarding: • Transfer of confidential and technical information, trade secrets, as well as customer and market information between the parties. • Determining price, profit margin and re-insurance commission. • Making Aksigorta entering similar collaborations with other parties difficult.
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Developments
The parties also entered a Confidentiality Agreement, committing to transfer technical information and trade secrets to each other, as well as all kinds of customer and market information. The Board’s Decision
The Board commented that co-insurance relationships fall within the scope of a group exemption. However, re-insurance relationships are not within the group exemption’s scope. Therefore, an individual exemption was required in these circumstances.
In principle, it is important for the Board to evaluate competition restriction provisions in agreements concluded between undertakings which compete and operate in the same market.
The Board ultimately granted an individual exemption for the agreement. In the process, it noted that competitor undertakings should continue to compete after concluding such an agreement.
The Board noted that Aksigorta and Acibadem are engaged in competing activities for insurance services. It conducted a negative clearance and individual exemption examination for the agreement.
The Board’s comments during evaluation of the agreements offer insight into how it views the competition law aspects of these arrangements:
In general terms, a negative clearance application involves parties seeking the Board to make a determination that their agreement does not breach competition laws. If the Board declines a negative clearance application, the parties must obtain an individual exemption, or ensure the agreement falls into one of the group exemptions which apply to certain types of agreements. The Board declined the negative clearance application due to the confidentiality agreement, which involves sharing technical information between the parties. The Board considers this to be a restrictive practice. Accordingly, the parties were required to obtain an individual or group exemption in order for the agreement to proceed.
“Taking into consideration the following facts; – ACIBADEM and AKSIGORTA continue to sell their products as two competitors, – ACIBADEM continue to create its own products independently, – Parties has no right to interfere each other in relation to operation, – ACIBADEM is serving Aksigorta only in relation to products, It has been observed that the agreement does not contain any action disturbing/restricting the competition more than what is necessary.”
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Our Competition and Antitrust Practice
Turkish competition laws prohibit anti-competitive agreements and abuses of dominance. As with many other jurisdictions, Turkey also has competition laws requiring merger control reviews. Moroğlu Arseven thoroughly understands the requirements and enforcement approaches of both the Turkish Competition Authority and its global counterparts. Following all recent developments in competition law allows us to build up a strong understanding and experience level, which in turn enables us to effectively and efficiently guide clients in a business-minded manner during matters involving complex competition law issues.
Advisory Services We offer a full range of competition law advisory services to support our clients’ international and domestic operations in horizontal and/or vertical relations, pricing issues, parallel trade, standard-setting activities, as well as licensing and other competition-sensitive arrangements. We have wide experience revising day-to-day contracts and business practices in terms of Turkish competition laws and best practices. We regularly support clients with reviewing, planning and executing regulatory filings for the necessary exemptions and clearances applicable to restrictive agreements and practices.
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Merger Control Moroğlu Arseven has significant experience in Turkish merger control issues. Our end-to-end services stretch from initial notifiability analyses, through to counseling during all steps of complex merger control reviews conducted by the Turkish Competition Authority. We have extensively counseled clients in mergers, acquisitions and joint ventures, obtaining approvals by handling the review process for such notifications with the view to mitigating the risk of delay which exists during review by the Competition Board. Moroğlu Arseven collaborates with many international law firms for the Turkish merger control aspects of foreign-to-foreign transactions.
Compliance Programs & Training Seminars Establishing and maintaining efective competition law compliance programs create efficiencies by adopting preventive measures, as well as raising competition law awareness for executives and our clients’ employees. Moroğlu Arseven pinpoints its clients’ specific expectations, designing compliance programs in line with such expectations and market-specific dynamics. Our indepth understanding of competition legislation enables our clients to mitigate or avoid related risks.
Moroğlu Arseven has a solid background in organizing workshops and trainings for domestic and international clients, as well as their representatives and employees. These workshops support risk and cost reductions by providing an in-depth grasp of how competition laws impact daily operations, including specific risk areas. We also assist clients to establish antitrust and competition compliance programs.
Investigations Our firm provides clients with full support during all phases (both written and oral) of competition law investigations. Moroğlu Arseven has represented defendants and complainants in a broad range of industries before the Turkish Competition Board, involving complex competition law issues. Our experience includes cartels, restrictive horizontal and/or vertical arrangements, concerted practices and abuses of dominance. We are also familiar with handling leniency application procedures before the Competition Board.
Litigation We represent our clients before the administrative judicial bodies during challenges to the Competition Board’s decision. We also represent clients in civil actions for damages.
Key Contacts Competition Law
Dr. E. Seyfi MoroÄ&#x;lu, LL.M. Partner
E. Benan Arseven Partner
E : esmoroglu@morogluarseven.com D : +90 212 377 47 30
E : barseven@morogluarseven.com D : +90 212 377 47 40
Burcu Tuzcu Ersin, LL.M. Partner E : btuzcu@morogluarseven.com D : +90 212 377 47 50
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Moroğlu Arseven is a full-service law firm with broadly demonstrated expertise and experience in all aspects of business law. Established in 2000, the firm combines a new generation of experienced international business lawyers and acclaimed of counsels who have academic, judicial and practical experience in private law. Its dynamic and dedicated team is able to analyse the legal framework and provide flexible solutions for clients doing business in Turkey. The firm serves local clients in international markets and international clients in Turkey. The firm represents and serves a diverse clientele, in a wide range of industries. These include manufacturing, retail, energy, banking and financial markets, construction and real estate, pharmaceuticals, life sciences, information technologies, telecoms, media, entertainment and sports. In-depth sector knowledge ensures seamless service across practice areas, enabling the firm to meet all of a client’s legal needs in Turkey.
A : Abdi İpekci Caddesi 19-1 Nişantaşı 34367, Istanbul, Turkey T : +90 212 377 47 00 F : +90 212 377 47 99 www.morogluarseven.com
Moroğlu Arseven is an Istanbul-based full service law firm, registered in Turkey and licensed to practice Turkish law by the Istanbul Bar. Association.This document is prepared by Moroğlu Arseven for general information purposes only. It is prepared in accordance with the Attorneyship Law numbered 1136, regulations based on such law and the professional rules of the Union of the Turkish Bar Associations. In particular, the regulations prohibiting advertisement by attorneys at law. The content may not be re-produced or adapted without prior written approval from Moroğlu Arseven. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on as legal or other advice.