Competition Law Newsletter No 18

This competition law newsletter provides information on the latest developments in relation to the Turkish competition market and the implementation of Law No 4054 on the Protection of Competition (the "Law") in light of recent announcements and publications by the Competition Authority (the "Authority") and decisions of the Competition Board (the "Board") published in September and October 2024.

COMPETITION MARKET OVERVIEW

ANNOUNCEMENTS

Recently Initiated Investigations

- Cosmetics and Pharmaceuticals

o The Board launched an investigation against Forever Living Sağlık ve Güzellik Ürünleri Dağıtım Ltd. Şti., Herbalife International Ürünleri Tic. Ltd. Şirketi and Homm Bitkisel Ürünler Pazarlama A.Ş. to determine whether there has been a violation of Article 4 of the Law.

o The Board launched an investigation against economic integration consisting of Biota Bitkisel İlaç ve Kozmetik Laboratuarları A.Ş., Derma Cos İlaç Medikal ve Kozmetik Sanayii ve İç Ticaret A.Ş. and Derma-Cos Kozmetik Sanayi Ticaret İthalat ve İhracat Ltd. Şti. to determine whether there has been a violation of Article 4 of the Law by fixing the resale prices of their resellers and/or restricting internet sales.

- Media

o The Board initiated an investigation against Mars Entertainment Group A.Ş. and Cj Enm Medya Film Yapım ve Dağıtım A.Ş., which operates in the field of cinema exhibition services market, for a violation of Article 6 of the Law by abusing its dominant position on that market.

o The Board launched an investigation against Med Yapım Televizyon ve Filmcilik A.Ş., Ay Sanat Prodüksiyon ve Yapım A.Ş., MA Distribution Televizyon ve Filmcilik A.Ş., Yek Teknoloji Pazarlama A.Ş. and Key Networks Holding A.Ş., operating in the film and film distribution services market, to examine potential anti-competitive practices on labour markets.

- Other Industries

o An investigation was launched against undertakings operating in the elevator maintenance and repair sector in Türkiye to determine potential violations of Article 4 of the Law.

o The Board launched an investigation against Adidas Spor Malzemeleri Satış ve Pazarlama A.Ş. upon the decision of Ankara 12th Administrative Court to annul the Board's decision to dismiss the complaints and not to open an investigation as a result of the preliminary investigation.

Recently Initiated M&A Notifications

During September-October, the Board received 25 merger and acquisition notifications. The sectoral distribution of these is as follows;

- Investment & Finance

o Acquisition of indirect joint control of Hargreaves Lansdown plc by funds or vehicles controlled by affiliates of Nordic Capital Fund XI, affiliates of CVC Capital Partners plc and Platinum Ivy B 2018 RSC Limited.

o Acquisition of indirect joint control of QMetric Group Holdings Limited and its subsidiaries by Cinven Capital Management General Partner Limited and Platinum Ivy B 2018 RSC Limited.

- IT Management & Software Industry

o Indirect acquisition of sole control over Veriforce LLC by Apax Partners LLP.

o Acquisition of sole control of Featurespace Limited by Visa International Service Association, a wholly owned subsidiary of Visa Inc.

o Transfer of 7.1% of the shares in Teamsec Finansal Yazılım Altyapı ve Danışmanlık Anonim Şirketi to Deniz Portföy Yönetimi A.Ş. - Deniz Ventures Venture Capital Investment Fund through capital increase within the scope of an investment round.

o Acquisition of sole control of RF Ultimate Parent, Inc. by Mastercard International Incorporated.

o Acquisition of 100% of the shares in Seri Bilgi Teknolojileri Destek Hizmetleri ve Ticaret Ltd. Şti. by Destek Bilgisayar ve İletişim Hizmetleri A.Ş.

o Acquisition of joint control of Ins Yazılım Sanayi ve Ticaret A.Ş. by Inavıtas Enerji A.Ş.

o Acquisition of the sole control of Softwareone Turkey Bilişim Teknolojileri Ticaret A.Ş. by SoftwareOne AG.

o Acquisition of joint control of Activ Software Holdings, LLC by Warburg Pincus LLC and Vista Equity Partners Management, LLC.

o Acquisition of joint control of Medianova İnternet Hizmetleri ve Ticaret A.Ş. by Turkey Growth Fund IV L.P. IV and Mete Serkan Sevim

- Chemical Industry

o Acquisition of sole control of Ercros, S.A. by Esseco Group Srl, through its wholly-owned subsidiary Esseco Industrial S.p.A., for all the shares of Ercros, S.A.

o Establishment of a joint venture over MBT Teknik Yapı Kimyasalları Sanayi ve Ticaret A.Ş. by Group B Shareholders (through the joint exercise of voting rights) and ii) Master Builders Solutions Holding GmbH.

o Termination of sales of a certain product group sold by Gün-Pa Boyar Madde ve Kimyasal Maddeler Tekstil Sanayi ve Ticaret Ltd. Şti, İlteks Boya ve Kimyevi Maddeler Sanayi ve Ticaret A.Ş., Meysan-Mensucat Yan Sanayi ve Ticaret A.Ş., and the acquisition of all tangible and intangible assets related to sales channels and sales activities to Elite Boya ve Kimyevi Maddeler Dış Ticaret A.Ş.

- Insurance

o Acquisition of sole control over Generali Sigorta A.Ş. by Kiler Holding A.Ş.

o Establishment of a fully functional joint venture between POCA Bilişim Teknolojileri A.Ş. and RCI Banque SA to operate as an insurance agency.

o Acquisition of sole control of NN Hayat ve Emeklilik A.Ş. by Zurich Yaşam ve Emeklilik A.Ş.

- Management Consultancy

o Acquisition of Volt Yönetim Danışmanlığı A.Ş. shares by WEG Holding B.V.

o Acquisition of 50% of the shares in Sistem Global Danışmanlık A.Ş. by Mediterra Capital Management Limited.

- Construction

o Acquisition of Fosroc Turkey's building systems branch of activity by Compagnie de Saint-Gobain S.A.

- Energy

o Acquisition of the entire issued share capital and securities of Pavilion Energy Pte Ltd. by Shell Eastern Trading Ltd.

o Acquisition of İvrindi RES Elektrik Üretim A.Ş. controlled by Pegasus World Energy LLC by Enerjisa Commondities BV.

- Health

o Acquisition of sole control of Baxter International Inc.'s renal care division by Carlyle Group Inc.

- Machine-Learning & Technology

o Acquisition by Experian PLC, through Experian Türkiye, of the financial rights, moral rights and all other intellectual property rights of the Experian Convex machine learning platform.

o Acquisition of sole control of LG Display (China) Co., Ltd. and LG Display Guangzhou Co., Ltd. by TCL China Star Optoelectronics Technology Co., Ltd.

Completed Investigations

Below is a summary of completed investigations that resulted in administrative fines, including the type of violation and the administrative fines imposed:

SUMMARY OF KEY DECISIONS

Meta Platforms Inc. Decision[1]

The Board rendered its decision regarding Meta Platforms Inc. finding that it did not violate Article 6 of the Law by discriminating against some users by applying discriminatory access to the new feature called Channels of the WhatsApp platform. Although the Board did not make determination of a dominant position, it assessed the allegations based on an abuse of dominant position and considered the position of Meta Platforms Inc. and its affiliated undertakings in presumptive markets.

The claim addressed by the Board was that Meta Platforms Inc. had allegedly discriminated against users with equal status in accessing the channels feature made available through the WhatsApp application, thereby abusing its position. For this reason, the Board evaluated the prohibition of discrimination and abuse of dominant position concerning the creation and the listing of Channels. After a thorough examination, the Board concluded that the economic entity of Meta had not abused its dominant position and had not engaged in discriminatory behaviour with the Channels feature offered on WhatsApp. In conclusion, the Board determined that Meta Platforms Inc. had not violated

Article 6 of the Law through discriminatory access practices related to the new Channels feature on the WhatsApp platform.

Erkunt Traktör Sanayi A.Ş. Decision[2]

As a result of the Board's decision dated 08.09.2022 and numbered 22-41/59-M, concerning the preliminary investigation into the allegations that the undertakings operating in the tractor production and marketing sector violated Article 4 of the Law with various practices, it was decided to open an investigation against Erkunt Traktör Sanayi A.Ş. During the investigation, Erkunt Traktör A.Ş. submitted commitments, and commitment negotiations with the Board started.

In its assessment, the Board evaluated the correspondence obtained as a result of on-site examinations and reached the conclusion that certain restrictions imposed on the passive sales of dealers may be considered as a violation of the Law. Following this evaluation, the Board accepted the commitment text submitted by Erkunt Traktör A.Ş., which proposed changes to the dealership agreements to address these concerns.

Hunca Life Kozmetik Pazarlama Dağıtım Ticaret A.Ş. Decision[3]

The Board evaluated the commitment text submitted by Hunca Life Kozmetik Pazarlama Dağıtım Ticaret A.Ş. in the investigation concerning potential violations of Article 4 of the Law by imposing active and passive sales bans on dealers and restricting internet sales. In its commitment letter, Hunca Life Kozmetik stated that it had terminated the direct sales method and lifted restrictions on retail and internet sales. After evaluating the commitment text, the Board accepted the commitments made by Hunca Life Kozmetik Pazarlama Dağıtım Ticaret A.Ş.

Yumurta Üreticileri Merkez Birliği Decision[4]

The Board decided to open an investigation against Yumurta Üreticileri Merkez Birliği ("YUMBİR"), 12 local unions affiliated to YUMBİR, and the presidents of these unions, based on allegations of violating Article 4 of the Law. The Board imposed administrative fines on some associations of undertakings that are members of YUMBİR for violating Article 4 of the Law due to their actions aimed at determining egg prices and restricting the supply and limiting competition.

The investigation into Verim Gıda Ürn. San. ve Tic. A.Ş., one of the undertakings affiliated to YUMBİR, was concluded with a settlement. However, there were differing justifications from two Board members regarding the calculation of the final administrative fine. The disagreement centred on whether the export revenues from 2021 should have been included in the company's turnover calculation for determining the fine.

Neolife İthalat İhracat A.Ş. Decision[5]

The Board initiated an investigation into Neolife İthalat İhracat A.Ş. (SOVITAL) based on allegations of violating Article 4 of the Law by determining resale prices of buyers and restricting internet sales. The investigation was concluded with a settlement.

During the investigation, it was found that SOVITAL, a party to the investigation, had intervened in the resellers' sales prices and the Board received a settlement request from SOVITAL. As a result of the settlement, the Board decided to impose an administrative fine on Neolife İthalat İhracat A.Ş. for violating Article 4 of the Law.

Storytel Turkey Yayıncılık Hizmetleri A.Ş. Decision[6]

In the investigation initiated against Storytel Turkey Yayıncılık Hizmetleri A.Ş. ("Storytel") for alleged violations of Articles 4 and 6 of the Law, the focus was on Storytel's agreements containing exclusivity clauses and allegedly restricting competition in the audiobook market. Storytel offered commitments to address the concerns raised, which were then revised following the Board's decision dated 26.10.2023 and numbered 23-50/965-M.

The Board evaluated the revised commitments, which included changes to the agreements containing exclusivity clauses. After reviewing these changes, the Board accepted the revised commitments and decided to terminate the investigation with the final commitment text.

Undertakings Operating in the Industrial and Medical Gas Sector Decision[7]

The Board decided not to open an investigation into the allegations that undertakings operating in the industrial and medical gas sector violated Article 4 of the Law with various practices.

As a justification, although the undertakings operating in the industrial and medical gas sector increased the USD price of argon by 100%, it was determined that there were regional and global factors that may affect the cost of gases in the price movements of these undertakings and that the fluctuations in the electricity-foreign exchange rate that caused these increases. Therefore, since these increases were shaped as a result of factors affected by inflation and market economy, the Board decided that the findings regarding the price increase and the exchange of information between undertakings did not have the purpose and effect of preventing competition.

Altıparmak Gıda San. ve Tic. A.Ş. (Balparmak) Decision[8]

The Board decided to open an investigation against Altıparmak Gıda San. ve Tic. A.Ş. (“Balparmak”) for a violation of Article 4 of the Law by exchanging competitively sensitive information with its competitor Sezen Gıda Mad. Tarım ve Hayvancılık Ürün. Tic. ve San. Ltd. Şti.(“Anavarza”).

The investigation was prompted by evidence obtained during on-site inspections, specifically emails between the two companies discussing "price transition”. The emails between Balparmak and Anavarza were found to contain competitively sensitive information, specifically related to pricing strategies. This type of information exchange can reduce uncertainty about competitors' future behaviour, potentially leading to coordinated practices. The Board concluded that the exchange of such information could lead to anti-competitive effects in the packaged honey market. By sharing pricing information, the companies could align their pricing strategies, reducing competition and potentially leading to higher prices for consumers.

Duracell Satış ve Dağıtım Ltd. Şti. Decision[9]

The Board initiated an investigation with the allegation that Duracell Satış ve Dağıtım Ltd. Şti.(“Duracell”) had violated Article 4 of the Law by determining the resale prices and restricting the territories and customers of buyers.

The Board decided that Duracell had violated Article 4 of the Law on the grounds of setting resale prices and restricting the regions and customers to which the buyers would sell. The settlement text submitted by

Duracell to the Authority was evaluated by the Board and as a result of the settlement, the Board applied a 25% discount on the administrative fine and decided to conclude the investigation.

Establishment of joint venture by TotalEnergies Marketing Services and The Hydrogen Company and acquisition of InterContinental Energy Holdings Group Limited by Clean H2 Infra Fund S.L.P. and Buckland Investment Pte. Ltd. 10

A fully functional joint venture was established by TotalEnergies Marketing Services and The Hydrogen Company. There is a vertical relationship between Air Liquide, which is a party to the joint venture and produces hydrogen, and the activities of the joint venture. The aim of the joint venture is to create a retail hydrogen network that will be used to distribute hydrogen.

However, since the lower and upper market shares of the parties to the joint venture are different, the Board authorised the transaction by taking into account the competitive structure of the market, the existence of strong competitors in the market and the market knowledge of the customers.

In addition, Clean H2 Infra Fund S.L.P. (HY24 INVESTOR) and Buckland Investment Pte. Ltd. acquired joint control of InterContinental Energy Holdings Group Limited (ICE) and a joint venture was established. One of the parties to the joint venture, HY24 INVESTOR, is an investment fund developing hydrogen technologies for advanced infrastructure assets. ICE, which will establish joint control, is a company operating in the field of wind farm projects, autovoltaic power plant projects, technologies based on hydrogen production.

Since it is understood that there is no horizontal and/or vertical overlap between the activities of the parties in Türkiye and that there is no affected market as a result of the transaction, the approval has been granted.

Acquisition of Gimv NV by WorxInvest NV[11]

The Board authorised the acquisition of a certain percentage of shares and sole control of Gimv NV by WorxInvest NV. The Board decided to authorise the transaction since there is no horizontal or vertical overlap in the activities of the parties in Türkiye and no significant lessening of effective competition as a result of the transaction. For this reason, the Board authorised the transaction by taking into consideration the competitive structure of the market, the presence of strong competitors in the market.

Acquisition of Ekol Lojistik A.Ş. by DFDS A/S [12]

The Board approved the acquisition of the branch of activity of Ekol Lojistik A.Ş. covering international transportation activities by road and the undertakings named EUTS SRL, EUTS GmbH and EUTS BV by DFDS A/S. The Board decided to allow the transaction with commitment of DFDS/AS. These commitments include that DFDS's Ro-Ro business unit in Turkey will have a separate legal entity, that the term of the commitments will be three years from the closing date of the transaction and may be extended if desired, and that DFDS's reservation and embarkation procedures that existed prior to the transaction will continue for all customers without any change after the transaction. There is some vertical overlap in their Ro-Ro transportation in Türkiye and because there is no important decline of effective competition with the transaction, the Board authorised the acquisition of Ekol Lojistik A.Ş. by DFDS/ AS.

GLOBAL ANTI-TRUST LAW UPDATES

Acquisition of PPF Telecom Group B.V by Emirates Telecommunications Group Company PJSC[13]

The European Commission (the "Commission") has approved the acquisition of PPF Telecom Group B.V. (“PPF”) by Emirates Telecommunications Group Company PJSC under the Foreign Subsidies Regulation (“FSR”) subject to relevant conditions, excluding its activities in the Czech Republic. In order to address the Commission's concerns, a number of conditions were imposed to be fulfilled by Emirates Telecommunications Group Company PJSC. These conditions include a commitment that the by-laws of Emirates Telecommunications Group Company PJSC should not deviate from ordinary UAE insolvency law and thus the unlimited State guarantee should be abolished, a prohibition on any financing from Emirates Telecommunications Group Company PJSC to PPF Telecom Group B.V.'s activities in the EU internal market. In addition, the Commission set another conditions as a commitment for this transactions. They have agreed that the commitments will be valid for a period of 10 years and may be extended by the Commission for a further five years or, if agreed by Emirates Telecommunications Group Company PJSC and the Commission, for a further extension. The Commission therefore approved the transaction on the condition that the transaction would no longer raise competition concerns and that the commitments would be fully complied with.

Booking.com Decision[14]

In its ruling on Booking.com, the Court of Justice of the European Union recognized that Booking.com's failure to apply an equal pricing policy to hotels in Europe and contractual provisions preventing hotels from selling on other platforms at lower prices were unlawful. In this decision, which was evaluated within the framework of the European Union Anti-trust policies, it stated that Booking.com's contracts with hotels and the “best price” provision in these contracts reduced competition among hotel booking sites and the competitive market.

The Court of Justice of the European Union found that the “equal price policy” applied by Booking.com was not proportionate and expedient in relation to the wide range of accommodation and price comparison facilities that the portal aims to offer to consumers.

1 Decision of the Board dated 18.01.2024 and numbered 24-05/80-32.

2 Decision of the Board dated 26.10.2023 and numbered 23-50/962-347.

3 Decision of the Board dated 21.12.2023 and numbered 23-60/1175-421.

4 Decision of the Board dated 26.10.2023 and numbered 23-50/980-357 and Decision of the Board dated 22.09.2022 and numbered 22-43/629-262.

5 Decision of the Board dated 11.01.2024 and numbered 24-03/28-10.

6 Decision of the Board dated 30.11.2023 and numbered 23-55/1076-380.

7 Decision of the Board dated 30.11.2023 and numbered 23-55/1091-385.

8 Decision of the Board dated 29.02.2024 and numbered 24-11/193-77.

9 Decision of the Board dated 08.02.2024 and numbered 2 24-07/117-49.

10 Decision of the Board dated 11.01.2024 and numbered 24-03/52-15.

11 Decision of the Board dated 21.02.2024 and numbered 24-09/154-64.

12 Decision of the Board dated 26.07.2023 and numbered 23-34/643-216.

13 Case dated 24 September 2024 numbered FS.100011.

14 Case dated 19 September 2024 numbered C.264/23.