• Introduction

The Turkish Competition Board (“Board”) published its 13.02.2025 dated and 25-06/152-78 numbered reasoned decision, in which it concluded the investigation launched against Frito Lay Gıda Sanayi ve Ticaret A.Ş. (“Frito Lay”) , the producer of well-known snack brands such as Lay’s, Ruffles, Doritos, Fritos, and Cheetos, to determine whether Frito Lay violated Article 4 of Act No. 4054 on the Protection of Competition (“Act No. 4054”) by engaging in practices that hindered the activities of its competitors at retail sales points. As a result of the investigation, the Board concluded that Frito Lay violated Article 4 of Act No. 4054 by restricting competition in the packaged chips market through the implementation of exclusivity practices at traditional retail sales points. Accordingly, the Board imposed an administrative fine of TRY 1,365,467,533.01 on Frito Lay and decided to impose certain behavioral remedies to ensure the establishment of effective competition in the packaged chips market.

  • Analysis of the Decision

The Board examined Frito Lay’s practices under four main categories: (i) practices requiring sales points to work exclusively with Frito Lay, assessed within the scope of exclusivity based conduct, (ii) the digital platform named Dükkan Senin, (iii) the installation of PO1 (integrated) stands in the traditional retail channel and (iv) the digital platform KazandıRio, which was evaluated within the context of predatory pricing.

Firstly, in assessing whether Frito Lay held a dominant position, the Board considered its previous decisions dated 2004 and 2013. In its earlier assessments, the Board consistently found that Frito Lay, which has been the largest player in the market for over 25 years, held or maintained a dominant position. The findings set out in the current decision also reaffirm the Board’s earlier conclusion, indicating that Frito Lay’s dominant position in the market remains unchanged. After confirming Frito Lay’s dominant position, the Board proceeded to assess whether Frito Lay restricted competition by engaging in exclusivity practices. The Board identified extensive evidence indicating that Frito Lay and/or its distributors engaged in de facto exclusivity practices that restricted competitors’ access to traditional retail points. These practices were found to be strategic in nature and directly linked to the knowledge and involvement of Frito Lay’s senior management. The Board concluded that such conduct violated Article 4 of Act No. 4054. Referring also to its 2004 decision, the Board reaffirmed that Frito Lay’s exclusivity system did not meet the conditions for individual exemption under Article 5, as no material change had occurred in the market or in the nature of the conduct.

The second category of conduct examined by the Board concerned the digital platform Dükkan Senin, through which traditional retail sales points could earn reward points based on their sales-related activities. However, the Board found that the platform lacked transparency and was susceptible to manipulation, as internal communications revealed that points were manually allocated to sales points irrespective of actual purchases. This indicated that the system was open to external intervention and could be used to incentivize exclusivity. The Board ultimately concluded that Dükkan Senin functioned as a non-transparent rebate mechanism and constituted an integral part of Frito Lay’s broader exclusivity strategy.

Another area of focus for the Board was the installation of PO1 (integrated) stands in traditional retail outlets. While these stands did not formally impose exclusivity through contractual terms, the Board found that their large and customized design significantly reduced shelf space available to competitors, especially in small retail outlets. Moreover, due to their high cost such stands posed a financial barrier to entry for rival undertakings. Evidence obtained during on-site inspections further revealed that, in some instances the installation of PO1 stands was accompanied by implicit exclusivity requirements, effectively pressuring retailers to remove rival products from their shelves. Accordingly, the Board concluded that the PO1 stand strategy contributed to market foreclosure and formed part of Frito Lay’s broader exclusionary conduct.

Finally, the Board assessed the KazandıRio mobile application, a consumer-facing promotion tool, which offered in-game rewards and data packages in exchange for codes found on products packaging. While concerns were raised regarding potential exclusionary effects, the Board found no evidence of a predatory pricing strategy or market foreclosure intent. Accordingly, it concluded that the KazandıRio application did not constitute a violation of competition law.

In contrast to earlier cases resolved through commitments, the Board rejected Frito Lay’s commitment proposal in this case. Although the alleged infringement did not qualify as a hardcore violation, the Board concluded that, given the extensive and strong evidence of direct exclusivity practices spanning over five years along with the repeated nature of similar allegations against Frito Lay since 2000, a commitment solution would neither be proportionate nor effective in addressing the competition concerns. Consequently, the commitment proposal was rejected.

  • Conclusion

In conclusion, the Board imposed a substantial administrative fine on Frito Lay for violating Article 4 of Law No. 4054 through de facto exclusivity practices in the traditional retail channel. In addition to the monetary sanction, the Board introduced a set of behavioral obligations aimed at restoring effective competition in the market. These obligations include:

  • The termination of all non-standard financial incentives such as additional discounts, concessions, and “Dükkan Senin” reward points provided to retailers outside regular purchasing arrangements,
  • A restriction on employee bonus systems, whereby Frito Lay and/or distributor staff may no longer act based on the presence or visibility of rival products at retail points and may only make recommendations concerning their own products,
  • A limitation on in-store equipment, including a one-stand policy per retail outlet, with only one additional hanger or similar display allowed in a single line,
  • Mandatory shelf allocation for competitors, requiring that at least 30% of horizontal space in each basket of the Frito Lay stand be reserved for rival products, clearly separated and labelled,
  • A fair access requirement, under which rival producers without their own stand can request access to 30% of the Frito Lay stand’s basket space, to be granted within one week,
  • The right for competitors to place visual materials in the designated sections of the Frito Lay stand, provided it does not compromise the overall integrity of the display.

This case echoes previous regulatory actions in the beverage sector. As mentioned above, similar concerns had previously led the Board to accept a set of commitments proposed by Coca-Cola Satış ve Dağıtım A.Ş. (“CCSD”). In its 02.09.2021 dated and 21-41/610-297 numbered decision, the Board concluded that the proposed commitments by CCSD were capable of addressing the identified competition concerns and accordingly terminated the investigation. The commitments included, among others, the separation of contracts across different beverage categories, the elimination of exclusivity clauses for still beverages, and the allocation of 25% of cooler space to competing products. More recently, with the announcement published on 10.06.2025, the Board launched a new investigation against CCSD due to renewed allegations of exclusionary practices and de facto exclusivity at sales points. The Frito Lay decision including the rejection of the commitment proposal followed closely by the launch of a new investigation into CCSD for similar practices, signals the Board’s increasing vigilance and a more proactive stance in addressing vertical restraints in the traditional retail channel. This could suggest a potential shift towards a stricter approach to exclusivity practices going forward.