• Introduction

The Turkish Competition Board (“Board”) recently published its reasoned decision, in which it concluded the investigation launched against Arı İnovasyon ve Bilim Eğitim Hizmetleri A.Ş. (“Doğa Koleji”) to determine whether Doğa Koleji violated Art. 4 of Act No. 4054 on the Protection of Competition (“Act No. 4054”) through determining catering fees with other private schools operating in Kocaeli and restricting competition in labour markets. As a result of the investigation, the Board imposed an administrative monetary fine of TRY 591,347.22 on Doğa Koleji, while other 18 private schools applied to the settlement procedure and were fined for engaging in anti-competitive conduct in the labour market.

  • Board’s Assessment on the Private Education Sector

The Board first examined the laws and legislation applicable to private schools to gain a better understanding of the regulatory framework in the private education sector. The Board noted that the maximum rates of increase in tuition fees for transition between classes were determined in the Regulation of the Ministry of National Education and therefore, the private schools could not determine the increase rates above a certain rate predetermined by the Ministry of National Education. Furthermore, the Board determined the relevant product and geographic markets. In terms of the relevant product market, the Board stated that the relevant market could be defined by covering both education and non-educational services, such as “private school management services market” and “labour market concerning education services” but ultimately left the definition of relevant product market open. In terms of relevant geographic market, while the Board assessed that the market could be defined as Kocaeli, considering that the private schools subject to investigation were operating in this city, the Board also left the definition of relevant geographic market open as it would not alter the outcome of the investigation.

  • Assessment on Documents Obtained During the On-Site Inspection

Following its general remarks on labour markets, the Board examined the documents obtained during the on-site inspections. The findings collected during the on-site inspections were mainly obtained from the correspondence in a WhatsApp group titled “Kocaeli Private School Founders”, which contained representatives of various private schools.

In terms of catering fees, while the Board determined that an agreement was made between undertakings to determine these fees, Doğa Koleji was not part of that agreement. In this respect, the Board examined the potential violations under no-poaching and wage-fixing agreements. Considering that the investigation was terminated for 18 other undertakings as a result of the settlement procedure, the only remaining undertaking subject to investigation was Doğa Koleji.

As a result of the Board’s examinations, the messages in the relevant WhatsApp group revealed that, when certain employees applied for jobs at other private schools, school administrators agreed to prevent such employee transfers. Based on this correspondence, the Board concluded that one of the purposes behind the establishment of this WhatsApp group was to prevent employee transfer between private schools. Moreover, school administrators also discussed whether to make an increase in teachers’ wages as well as their wage rates. While the Board did not refer to any correspondence belonging to Doğa Koleji setting out that Doğa Koleji intentionally was part of a no-poaching and/or wage-fixing agreement, as Doğa Koleji was a member of the WhatsApp group in which the undertakings agreed to prevent employee transfer and determine wages, the Board concluded that Doğa Koleji was also part of these agreements. In this respect, the Board dismissed the arguments of Doğa Koleji, stating that there was no finding including even the undertaking’s trade name among the documents obtained during the on-site inspections. Thus, the Board found it sufficient that Doğa Koleji’s representatives were members of the WhatsApp group. Moreover, the Board reiterated that participants in an environment where anti-competitive agreements are discussed bear responsibility unless they explicitly and openly oppose the topics and outcomes of such meetings. Furthermore, the Board emphasized that undertakings must declare their unwillingness to receive competitively sensitive information and state their objections in situations where such information is exchanged, as this transparency would safeguard competition. Accordingly, in the case at hand, as Doğa Koleji did not oppose the topics or the outcomes in the WhatsApp group or explicitly state its unwillingness to other group members, the Board disregarded the arguments defending non-violation of Art.4 of Act No. 4054.

  • Conclusion

Based on the findings and assessments, the Board determined that while Doğa Koleji did not violate Art.4 of Act No.4054 with regards to catering fees, it violated the same article through no-poaching and wage-fixing agreements in labour markets. Therefore, the Board imposed an administrative fine of TRY 591,347.22 on Doğa Koleji.

The Board’s decision is of importance as it highlights that even being a member of a WhatsApp group could lead to a violation of Act No. 4054 unless the unwillingness to the conducted acts is not explicitly stated in relevant correspondence.