Competition Newsletter - January 2024

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 December 2023.

Competition Market Overview

Legislation and Announcements

A- Investigation Announcements:

Recently Initiated Investigations

The Board initiated the following investigations:

• At its meeting on 19 October 2023, the Board decided to commence an investigation against 35 undertakings engaged in the business of buying and selling pistachios, in order to determine whether they have violated Article 4 of the Law.
• At its meeting of 23 November 2023, the Board decided to initiate an investigation against Meta Platforms Inc. to examine whether Meta Platforms, Inc. violated Article 6 of the Law by tying the usage of its newly launched application (namely Threads) with its Instagram application, having reviewed the evidence from the preliminary investigation and finding it serious and sufficient.
• At its meeting of 23 November 2023, the Board commenced an investigation against 17 undertakings on Türkiye’s construction chemicals market, to determine whether they have violated Article 4 of the Law by agreeing on price increases and pricing strategies, exchanging competitively sensitive information, colluding in tenders, entering into employee non-solicitation and salary fixing agreements, fixing resale prices, restricting internet sales and/or limiting customers and territories.
• At its meeting on 30 November 2023, the Board decided to initiate an investigation against five undertakings to determine whether they violated Article 4 of the Law by sharing competition-sensitive information with certain undertakings operating private food control laboratories.

Completed Investigations

The Board concluded its investigations against undertakings active in the home appliances sector, in the education and accommodation sectors for violations of Article 4 of the Law by determining the resale price and restricting internet sales.

Please see below the table indicating the relevant undertakings, the associated of violation of the Law and the amount of the administrative fine imposed by the Board within the scope of those investigations.

Additionally, the investigation on whether certain private schools established in Ankara province violated Article 4 of the Law was completed. In this context, the Board decided that there was no violation of Article 4 of the Law and administrative fines were only imposed on two of the private schools that applied for the settlement procedure. This decision is significant as it shows that undertakings applying for the settlement procedure will be given administrative fines even if the Board finds no breach of the Law as a result of the investigation.

On a separate note, the table below shows other investigations which were concluded with settlement and commitment procedures:

B- M&A Notifications:

During December, 15 (fifteen) merger and acquisition notifications were submitted to the Board in total, and the sectoral distribution of these notifications is as follows:

- Remote sensing technologies

• The transaction concerns the acquisition of approximately 1/3 of the share capital of Wesii S.r.l. by Terna Forward S.r.l., which will ultimately have joint control over Wesii S.r.l. together with its existing joint controlling shareholders DxT Commodities S.A. and Mauro Migliazzi.

- Energy & Fuel Industries

• The acquisition of indirect joint control of Adapt2 Solutions, Inc, by funds advised and/or managed by subsidiaries of Blackstone Inc. and Vista Equity Partners Management, LLC, respectively.
• The establishment of a joint control over InterContinental Energy Holdings Group Limited by Clean H2 Infra Fund S.L.P. and Buckland Investment Pte Ltd.
• The acquisition of all the shares in bp Petrolleri A.Ş. and bp Turkey Refining Ltd. Şti. by Petrol Ofisi A.Ş.
• The acquisition of joint control over Simulation Software Holding Company Pty Ltd, by new subsidiaries of Blackstone Inc. and Vista Equity Partners Management, LLC.

- Agriculture and seed industries

• The notification for approval of the transaction of acquisition of all the shares and sole control of Viterra Limited by Bunge Global SA.

- Cement Industry

• The final acquisition of the sole control of OYAK Denizli Çimento Anonim Şirketi (and subsequently OYAK Çimento Fabrikaları A.Ş.) by Taiwan Cement Corporation through a share transfer from Cimpor Global Holdings B.V. to TCC Amsterdam Holdings B.V.

- Electronic money and payment services & Financial Services

• The transaction regarding the merger of Moka Ödeme ve Elektronik Para Kuruluşu A.Ş. and Birleşik Ödeme Hizmetleri ve Elektronik Para A.Ş. under Birleşik Ödeme Hizmetleri ve Elektronik Para A.Ş. through a merger ,and thereafter the acquisition of 50% of the shares in Birleşik Ödeme Hizmetleri ve Elektronik Para A.Ş. by each of Türkiye İş Bankası A.Ş. (and its subsidiaries) and OYAK Portföy Yönetimi AŞ Üçüncü Girişim Sermayesi yatırım Fonu through a share capital increase.
• The acquisition of joint control of Adevinta ASA by certain funds ultimately controlled by Permira Holdings Limited and Blackstone Inc.
• The establishment of joint control over M Plus Croatia d.o.o. by the European Bank for Reconstruction and Development and Meritus ulaganja d.d.

- IT management & Software industry

• A transaction relating to the acquisition of the Application Modernization and Connectivity business of Open Text Corporation by Rocket Software, Inc.
• The acquisition of sole control of Splunk Inc. by Cisco Systems, Inc

- Cosmetics and Cleaning Products Industry

• The acquisition of sole control of Oktrade Kimya Sanayi ve Ticaret A.Ş. by Azelis TR Kimya Endüstrisi Ürünleri İthalat İhracat Ticaret ve Sanayi A.Ş.

- Chemical Industry

• The acquisition of sole control of Cornerstone Chemical Company LLC. through funds and accounts managed by Brigade CapitalManagement, LP

- Mining industry

• The acquisition of a 77% shareholding in the coal business and assets held by Teck Resources Limited by Glencore Plc.

C- Legislation:

New Regulation On Active Cooperation For Detecting Cartels Enters Into Force [1]

"The Regulation on Active Cooperation for Detecting Cartels" (the "New Regulation") entered into force after being published in the Official Gazette on 16 December 2023 and numbered 32401. The former Regulation on Active Cooperation for Detecting Cartels published in the Official Gazette, dated 15 February 2009 and numbered 21142 (the "Former Regulation"), which had been in force for more than 14 years, was abolished.

Summary of Key Decisions

The Board rendered twenty four decisions within December 2023:

• eight decisions regarding breaches of competition law
• eight decisions regarding merger and acquisition notifications
• eight decisions regarding other matters

A- Breach of Law Decisions:

As a result of preliminary investigation 2022-3-040/ÖA initiated by the Board regarding the cosmetics sector, the Board decided to initiate investigations with its decision numbered 22-48/696-M(1-6). The investigations launched within the scope of the same preliminary investigation were concluded as follows:

Further, the Board has rendered its decision regarding Ashley Joy Kozmetik San. ve Tic. A.Ş., 8 which is also active in the cosmetics sector. The Board imposed a fine of TRY 769,578.93 on Ashley Joy Kozmetik San. ve Tic. A.Ş. as a result of the settlement procedure, having found a violation of the Law through the company’s RPM practice.

B- M&A Decisions

- Hard surface materials market

In its decision of 13 April 2023, the Board authorised the transaction whereby Peker Yüzey Tasarımları Sanayi ve Ticaret A.Ş., which had been under the joint control of Hande PEKER KUYUMCU and Magnesia SARL and Lotte Chemical Corporation, came under the sole control of Lotte Chemical Corporation through a share transfer, since the Board concluded that there will not be any significant reduction in effective competition as a result of the transaction subject to the notification. [9]

- Distribution of fuel products market

In its decision of 13 April 2023, the Board authorised the acquisition of the sole control of Aytemiz Akaryakıt Dağıtım AŞ (AYTEMİZ) by the Public Joint Stock Company TATNEFT (TATNEFT), since the transaction subject to authorisation will not significantly reduce the effective competition.[10] Within the scope of the investigation, considering that the amount planned to be supplied from TATNEFT corresponds to a very small portion of Aytemiz's total supply structure, it was assessed that this connection alone would not give rise to significant competition concerns, and considering AYTEMİZ's market share in the fuel products distribution market, it was assessed that it was not possible to restrict the access of competing suppliers to customers.

- Second hand vehicle trade and second hand vehicle trade brokerage services market

In its decision of 5 May 2023, the Board authorised the acquisition of Borusan Araç Pazarlama Tic. Ltd. Şti , which is under the ultimate control of Borusan Holding AŞ, by Borusan Oto Servis ve Tic. A.Ş., which is under the joint control of Borusan Group and GIWA Holding Gmbh& Co. KGaA. Within the scope of the investigation, it was assessed that the transaction subject to the notification would not result in a considerable reduction of effective competition in any market, taking into account that the shares of the parties in the relevant markets are quite low, that there are many competing undertakings in the second-hand vehicle purchase and sale market, and that there are competitors such as Otonet Motorlu Taşıtlar AŞ, sahibinden.com, Müzayede.com in the second-hand vehicle trade brokerage services market.[11]

- Information Technology services market

In its decision of 5 May 2023, the Board authorised the acquisition of the sole control of Cvent Holding Corp., in which Vista Equity Partners Management, LLC is the majority shareholder, by Blackstone Inc. on the grounds that the transaction will not significantly reduce effective competition. Within the scope of the review, it was concluded that the transaction would not lead to any horizontal or vertical overlap between the activities of the transaction parties and although the turnovers of the parties has not exceeded the thresholds set out in the first paragraph of Article 7 of Communiqué No 2010/4, the transaction was deemed subject to authorisation since Cvent Holding Corp. is a technology undertaking.[12]

- Hydrogen-based engineering sector

In its decision of 23 March 2023, the Board authorised the establishment of a fully functional joint venture under the Joint Venture Agreement between The Hydrogen Company SA, a wholly-owned subsidiary of L'Air Liquide SA, and Aéroports de Paris International S.A., a wholly-owned subsidiary of Aeroports De Paris SA, since the activities of the parties to the transaction subject to the notification do not overlap horizontally or vertically in Türkiye and that the transaction subject to the notification will not significantly reduce effective competition in any goods and services market in the whole or part of the country, in particular by creating a dominant position or strengthening a dominant position.[13]

C- Other Decisions

CITIBANK Decision [14]

To summarise the case, the Board first requested certain information and documents from Citibank as part of a preliminary investigation. After the preliminary investigation concluded that there was no need for an investigation, Citibank requested the destruction of the documents received by the Board on the grounds that the documents are highly sensitive, confidential and even constitute trade secrets, and that a failure to destroy them might expose the company to various legal and criminal sanctions in foreign countries. The Board rejected this request, stating that the time limit for appealing the decision on the preliminary investigation (judicial review) has not expired yet. Citibank appealed the Board's rejection decision to the administrative court and the court of first instance upheld Citibank's claims. This decision was later appealed by the Board to the Court of Appeal and was subsequently reversed in favour of the Board. Citibank then appealed the reversal decision to the Council of State and the case is still pending before the Council of State.

As a result of this, Citibank asked the Board to change its decision to refuse destruction pursuant to Article 11 of the Administrative Procedure Law. Citibank also stated that the court of first instance had found it right and that the time to appeal the preliminary investigation had expired. The Board responded that, although the time for appealing the preliminary investigation had expired, the Court of Appeal had found them to be in the right, and that the legislation does not provide regulation for the destruction of documents received by the Board. Therefore the Board decided to reject the request for the removal, revocation, amendment or new action to be taken pursuant to Article 11 of the Administrative Procedure Law.

Summary of Important Decisions of the EU Commission

Merger of Novozymes and Christian Hansen [15]

The European Commission ("Commission") has approved, under the EU Merger Regulation, the proposed merger between Novozymes A/S (‘Novozymes') and Christian Hansen A/S (‘Chr. Hansen'). The approval is conditional upon full compliance with the commitments offered by the parties. To address the Commission's competition concerns, the parties offered to divest: (i) Chr. Hansen's project to enter the market for the manufacture of lactase; (ii) Chr. Hansen's lactase distribution business; and (iii) Novozymes' lactase production facility. These commitments fully address the competition concerns identified by the Commission, by paving the way for the creation of a divested business with the necessary production assets and research and development capabilities to grow as a viable competitive producer of lactase on a lasting basis. Following the positive feedback received in the context of the commitments' market test, the Commission concluded that the transaction, as modified by the commitments, would no longer raise competition concerns.

Lantmännen Ethanol Benchmark Cartel Decision [16]

The Commission has fined Lantmännen ek för and its subsidiary Lantmännen Biorefineries AB around EUR 47.7 million for participating in a cartel concerning the wholesale price formation mechanism for ethanol in Europe. This decision follows the adoption of a settlement decision against Abengoa in 2021 and the closure of proceedings against Alcogroup in 2023. The Commission's investigation revealed that Lantmännen, together with two other companies: (i) coordinated its trading conduct on a regular basis before, during and after the MOC Window, (ii) agreed to limit the supply of physical ethanol in the Rotterdam area that could end up in the MOC Window, and (iii) exchanged commercially sensitive information in order to implement the coordinated behaviour.

1 For further details please see our client alert.

2 For summary of decision please see our newsletter.

3 Decision of the Board dated 23.02.2023 and numbered 23-10/175-43

4 Decision of the Board dated 02.03.2023 and numbered 23-12/187-63

5 Decision of the Board dated 23.03.2023 and numbered 23-10/154-48

6 Decision of the Board dated 12.01.2023 and numbered 23-03/29-12

7 Decision of the Board dated 09.03.2023 and numbered 23-13/214-70

8 Decision of the Board dated 03.08.2023 and numbered 23-36-676-231

9 Decision of the Board dated 13.04.2023 and numbered 23-18/330-112.

10 Decision of the Board dated 13.04.2023 and numbered 23-18/341-113.