TURKEY: An Introduction to Competition/Antitrust
Background
Throughout 2023, the Turkish Competition Board (the “Board”) rendered notable precedents, and the Turkish Competition Authority (the “Authority”) worked on various matters such as new sector inquiries, legislative works and co-operation agreements with other authorities.
In 2023, the Authority conducted inquiries across various sectors, with a focus on traditional sectors such as cement, construction chemicals and fast-moving consumer goods (FMCG), as well as three inquiries specifically centred on digital markets. The Board initiated a post-earthquake sector inquiry into cement and construction chemicals to prevent anti-competitive activities and encourage co-operative competition during reconstruction. Currently, ongoing investigations examine the practices of corporations in these sectors.
The FMCG sector inquiry revealed a concentration increase at the retailer level, prompting concerns about potential unfair practices driven by buyer power, and leading to recommendations aligned with European competition law. The Authority’s comprehensive approach to digital markets involved a study, “Reflections of Digital Transformation on Competition Law”, highlighting distinctions from traditional markets and proposing solutions, including data portability, algorithmic transparency and enhanced merger control.
Additionally, a sector inquiry into mobile ecosystems was initiated to unveil potential competitive impacts, while a preliminary report on the online advertising sector highlighted issues such as:
i) data privacy concerns;
ii) conflicts of interest in the ad tech supply chain; and
iii) the role of digital platforms as vital commercial partners for news publishers.
Furthermore, the Authority signed a Co-operation and Information Exchange Protocol with the Turkish Personal Data Protection Authority, intending to:
i) promote competitive practices;
ii) synchronise competition and data protection measures; and
iii) alleviate apprehensions arising from data-driven technologies.
This should bolster consumer control over personal data.
Key Legislative Developments
The Regulation on Active Co-operation for Detecting Cartels (the “Leniency Regulation”) entered into force on 16 December 2023, replacing the former leniency regulation, which had been in force since 15 February 2009. The Leniency Regulation extended full immunity both to cartel parties and to facilitators, including hub-and-spoke cartels. To establish a clear distinction between the leniency programme and the settlement procedure, it introduced a new requirement of a “document that holds value”, obliging applicants to provide documents considered valuable in reinforcing the Authority’s ability to establish the cartel.
Additionally, the Authority is currently considering legislative measures pertaining to digital markets, anticipating the introduction of new obligations for undertakings with significant market power. The proposed amendments are expected to incorporate regulations on gatekeepers, potentially integrating them into Article 6 of Law No 4054 on Protection of Competition (“Law No 4054”) or as a distinct article, though the timeline for adoption remains uncertain.
Key Investigations and Decisions
Throughout the last year, the Authority focused on numerous investigations. Certain notable abuse-of-dominance investigations concentrated on digital markets (ie, Sahibinden Decision (23-39/754-263, 17 August 2023), Trendyol Decision (23-33/633-213, 26 July 2023)).
A significant decision was the Meta Decision (22-48/706-299, 20 October 2022) in which the Board determined that Meta Platforms, Inc abused its dominance by combining data collected from Facebook, Instagram and WhatsApp services, hindering competitors’ activities in the markets for personal social networking and online display advertising services, and creating an entry barrier to these markets. Accordingly, the Board imposed an administrative fine on Meta and obliged Meta to “cease the infringement” within one month from the official service of the reasoned decision.
Another highlight in digital markets concerned the Authority’s investigation into automated pricing mechanisms, on 19 October 2023, focusing on major online retail sales platforms in Turkiye – namely D-Market Elektronik Hizmetler ve Ticaret AŞ, Trendyol and Amazon Turkey Perakende Hizmetleri Limited Şirketi.
Further, in two recent decisions (namely BSH (22-55/864-358, 15 December 2022) and Anavarza (23-13/209-67, 9 March 2023)) the Board adopted a higher standard of proof for resale price maintenance (RPM) violations, departing from its prior trend of categorising all RPM violations as “by object” violations. Notably, in both cases the Board determined that internal communications alone were insufficient to establish an RPM violation beyond reasonable doubt.
Throughout 2023, the Board persistently examined human resources practices, culminating in its final decision (23-34/649-218, 26 July 2023) announced on 2 August 2023. The investigation, stemming from allegations of “gentlemen’s agreements” among certain undertakings to avoid hiring each other’s employees, resulted in administrative fines for 16 undertakings, while 11 undertakings concluded the investigation through settlement.
In 2023, the Authority actively evaluated the recently adopted commitment and settlement applications, and published six commitment-related decisions and 22 settlement-related decisions. In the Obilet Decision (23-27/521-177, 15 June 2023), the Board concluded its investigation against Obilet Bilişim Sistemleri AŞ based on the commitment package, which sought to address concerns related to potential tying practices and to ensure compliance with online advertising and communication bans in contracts between Obilet and competing platforms.
In its Miele Decision (22-51/753-312, 10 November 2022), the Board determined that Miele Elektrikli Aletler Dış Ticaret ve Pazarlama Ltd Şti had interfered with the resale prices of authorised dealers who had purchased products from Miele for resale in physical stores or online platforms, yet granted a 25% reduction in the administrative fine to Miele due to its settlement application.
Moreover, the Board published four leniency-related reasoned decisions in 2023. The Beypazarı Decision (22-23/379-158, 18 May 2022) and Kınık Decision (22-17/283-128, 14 April 2022) marked the first application of both settlement and leniency mechanisms simultaneously. In these cases, the Board determined that Beypazarı and Kınık had exchanged competitively sensitive information, constituting cartel behaviour. Both undertakings applied for settlement and leniency, resulting in a 35% reduction in administrative fines for Kınık and a 30% reduction for Beypazarı under the leniency mechanism. Additionally, a 25% reduction in fines was granted for their settlement, leading to an overall reduction of 60% for Kınık and 55% for Beypazarı.
Regarding merger control assessments and Phase II investigations, in the Migros/Ay-Mar Decision (22-28/449-181, 23 June 2022), the Board scrutinised the acquisition of tenancy rights and fixed assets of Ay-Mar's multiple stores by Migros. Assessing horizontal overlapping markets, changes in market dynamics, competitors’ positions, and market entry opportunities, the Board acknowledged the market’s non-static nature, ongoing growth trends of companies, and potential fluctuations in market shares. Evaluating potential market closure, the Board concluded that the transaction would not impose restrictions on inputs or customers in vertically overlapping markets, thus maintaining effective competition.
During 2023, the Board also actively scrutinised procedural matters. The Board continued to apply the legal principle of ne bis in idem, prohibiting the imposition of duplicative penalties for the same violation (FMCG II Decision, 22-55/863-357, 15 December 2022). Moreover, the Board persisted in penalising companies for providing false or misleading information, and indeed fined companies for each occurrence of providing incorrect or misleading information (Farmasi Decision, 23-06/69-20, 26 October 2023).
Moreover, in 2023 the Board issued 26 reasoned decisions, imposing administrative fines on companies for hindering on-site inspections. On this note, the Turkish Constitutional Court’s decision (Application No 2019/40991, 23 April 2023) on 20 June 2023 marked an important decision that may affect on-site inspection procedures, challenging the regular procedure and allowing case handlers to conduct on-site inspections with a Board-issued certificate of authority as per Law No 4054.
Indeed, the Constitutional Court found that the provision enabling on-site inspections without a court warrant violated Article 21 of the Turkish Constitution, safeguarding domicile immunity. As it stands, the Authority might need to seek a warrant from the Criminal Judgeship of Peace before conducting on-site inspections, a process outlined in the law but previously invoked when faced with uncooperative companies.