TURKEY: An Introduction to Competition/Antitrust

TURKEY: An Introduction to Competition/Antitrust

The relevant legislation establishing competition law principles in Turkey is Law No. 4054 on Protection of Competition of 13 December 1994 (‘Law No. 4054’). This legislation is reinforced by various regulations, communiqués and guidelines, which are adopted in parallel to secondary legislation of EU competition law. The national competition agency enforcing competition law rules is the Turkish Competition Authority (the ‘Authority’), a legal entity with administrative and financial autonomy.

As for the Turkish Competition Board’s (the ‘Board’) recent decisions where it imposed an administrative monetary fine due to restrictive agreements or concerted practices (Article 4 of Law No. 4054), the Board concluded the full-fledged investigation (18 April 2019, 19-16/229-101) against five undertakings and an association active in cabotage Ro-Ro transportation lines in Turkey. The Board decided that the undertakings (i.e. 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. and İstanbul Deniz Otobüsleri Sanayi ve Ticaret A.Ş.) have violated Article 4 of the Law No. 4054 through collectively determining prices. The Board’s administrative monetary fine to all undertakings was TRY7,404,850.77 (around USD1.3 million and EUR1.2 million), including the reduced fine imposed on the leniency applicant (i.e. Kale Nakliyat) and the fine imposed on İstanbullines for the submission of incomplete information to the Competition Authority.

In terms of vertical restrictions, the Board has recently levied an administrative monetary fine following the investigation launched against Maysan Mando Otomotiv Parçaları San. ve Tic. A.Ş (‘Maysan Mando’) (20 June 2019, 19-22/353-159). Previously, the Board assessed the allegation that Maysan Mando refused to supply products to the complainant, coordinated its activities with the complainant's competitors in order to exclude the complainant from the market and thus, restricted competition. Following the preliminary investigation, the Board decided that there is no need to launch an investigation against Mayson Mando (18 February 2016, 16-05/107-48), which was annulled by the 15th Administrative Court of Ankara (25 October 2017, E. 2016/3742, K. 2017/2794). Further to the annulment, the Board re-evaluated the case by launching a full-fledge investigation and assessed whether Maysan Mando violated Article 4 of Law No. 4054 by determining the resale prices of dampers through the supply agreements with its dealers. The Board determined that the dealership agreements concluded between Maysan Mando and its dealers would not benefit from the block exemption since preventing the distributors from determining their own selling prices is considered a restriction which aims to restrict competition in both direct or indirect manners and any agreement that contains such restrictions cannot benefit from the block exemption set forth under Block Exemption Communiqué No. 2017/3 on Vertical Agreements in the Motor Vehicles Sector. The Board further evaluated that the relevant agreements cannot benefit from individual exemption considering that such conduct does not meet the conditions provided under Article 5 of Law No. 4054. Conclusively, Maysan Mando was imposed an administrative monetary fine equivalent to 0.75% of its annual gross income for violating Article 4 of Law No. 4054 through resale price maintenance.

As to the Board decisions on dominance, the Board concluded the investigation launched against Medsantek Laboratuar Malzemeleri Sanayi ve Ticaret Limited Şirketi (‘Medsantek’) and Genomed Sağlık Hizmetleri Anonim Şirketi (‘Genomed’) based upon a complainant’s (i.e. Intron Sağlık Ürünleri İthalat İhracat Ticaret Limited Şti.) allegation that Medsantek and Genomed violated Article 6 of Law No. 4054 through excluding their competitors from the market for kits used in DNA sequence analysis devices by ceasing to provide authorization certificates which are necessary for the tenders in this industry (28 March 2019, 19-13/182-80). The Board decided that Genomed did not violate Law No. 4054 and should not be subject to any administrative monetary fines since it is found that Genomed did not reject any request for authorization certificates of the undertakings in the relevant market. That said, the Board concluded that Medsantek’s failure to provide the authorization certificate requested by the hospitals for participating in public tenders after selling the DNA sequence analysis devices has a negative effect on the competition in the relevant market. Accordingly, the Board imposed a monetary fine against Medsantek in the amount of TRY504,534.02 due to its findings that Medsantek’s conduct leads to market foreclosure and thus violates Article 6 of Law No. 4054.

In relation to merger control, in June 2019, the Board conditionally approved the transaction regarding the acquisition of sole control by Harris Corporation over L3 Technologies, Inc. (20 June 2019, 19-22/327-145) based on the commitments submitted to the European Commission. The Board held that the commitments have completely eliminated the overlap between the parties and thus, the transaction does not result in the creation or strengthening of a dominant position and does not significantly impede competition. In line with the commitments submitted to the Commission, Harris has submitted that it would divest its businesses for night vision devices and image intensifier tube technologies used in these devices to eliminate the vertical overlap. Additionally, in April 2019, the Board decided to grant conditional clearance to the transaction regarding the acquisition of sole control of Embraco, the compressor manufacturing business of Whirlpool Corporation, by Nidec Corporation (‘Nidec’) following the Phase II review (18 April 2019, 19-16/231-103). The clearance decision was rendered subject to the remedies proposed before the Commission concerning the divestiture of Nidec’s light commercial compressor and household compressor businesses. The Board held that the divestiture would eliminate the horizontal and vertical overlaps between the parties’ activities.