GIDE Competition Newsletter - October

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 October 2023.

Competition Market Overview

Announcements

A. Investigation Announcements:

Recently Initiated Investigations

• An investigation launched against some driving schools for a violation of Article 4 of the Law through price fixing.
• An investigation launched against Erikli Su ve Meşrubat Sanayi ve Ticaret A.Ş. and Pınar Su ve İçecek Sanayi ve Ticaret A.Ş. for a violation of Article 4 of the Law through information exchange.
• An investigation launched against Susa Gıda Maddeleri Pazarlama Ticaret A.Ş. for a violation of Article 4 of the Law through determining the resale prices of its buyers.

Completed Investigations

The Board concluded its investigations against undertakings active in various sectors for violations of Article 4 of the Law by determining the resale price through settlement procedures.

Please see the table below regarding name of the undertaking, the sector of activity and the amount of the administrative fine imposed by the Board within the scope of those investigations.

B. M&A Notifications:

During October, a total of 15 merger and acquisition notifications were made to the Board, the sectoral distribution of these is as follows;

• Banking:

• The acquisition of approximately 100% of the shares in Turkland Bank A.Ş., currently under the joint control of Bankmed SAL and Arab Bank PLC, by Zeren Group Yatırm Holding AŞ.
• Technology:
• Acquisition of 100% of the shares in Compugroup Medical Bilgi Sistemleri Anonim Şirketi by Bupa Turkey Sağlık Hizmetleri Anonim Şirketi.
• Acquisition of control over Zingat Gayrimenkul Bilgi Sistemleri A.Ş. by Glokal Dijital Hizmetler Pazarlama ve Ticaret A.Ş.
• Acquisition by EP Equity Investment S.a r.l. of sole control over the Tech Foundations business line, which was spun-off from Atos SE.
• Glass Packaging:
• Acquisition by Sisecam Investment BV, a wholly-owned subsidiary of Türkiye Şişe ve Cam Fabrikaları A.Ş., of joint control over ICRON Teknoloji Bilişim A.Ş. and ICRON Technologies BV together with Ali Tamer Ünal.
• Energy:
• Acquisition of a participation share and related assets of BP Petrolleri AŞ by THY Opet Aviation Fuels AŞ by exercising the pre-emption right under the Joint Aviation Operation Agreement for the Storage and Refuelling of Aircraft at Turkish Airports covering Antalya, Bodrum Milas Airport and Izmir Adnan Menderes Airports, signed between Shell Company Of Türkiye Limited Head Office London Turkey Branch, THY Opet Aviation Fuels AŞ and BP Petrolleri AŞ.
• Acquisition of Maren Maraş Elektrik Üretim A.Ş. by Batı Kipaş Kağıt San. And Tic. A.Ş.
• Supply of Machinery & Services:
• Acquisition of sole control over Wittur International Holding GmbH by FS KKR Capital Corp.
• Digital Consulting:
• Acquisition of sole control over Braingroup AG by Giesecke+Devrient GmbH through its subsidiary Netcetera Group AG.
• Acquisition of part of the shares in PT Rafflesia Investasi Indonesia from the Indonesia Investment Authority by its wholly owned subsidiary Kurito Investments Holding B.V. and Platinum Compass B 2018 RSC Limited from Indonesia Investment Authority
• Chemical Industry
• Acquisition of the sole control over Kimteks Kimya Tekstil Ürünleri Ticaret A.Ş. and Renkim Dış Ticaret A.Ş. by Ravago S.A. through its subsidiary Ravago Chemicals S.A.

C. Other Announcements

Cooperation and Information Sharing Protocol Signed between the Personal Data Protection Authority and the Competition Authority.

On 26 October 2023, a cooperation and information sharing protocol was signed between the Authority and the Personal Data Protection Authority. Under this protocol, the two authorities agreed to apply for collaborative work: (i) operate joint studies in rapidly developing areas that are within the jurisdiction of both authorities, (ii) publish reports on the cooperation of the two authorities to raise awareness of users and inform relevant undertakings, (iii) organise joint presentation and discussion programs, (iv) organise trainings where the two authorities share their experience and expertise with each other, (v) consult on common issues in national and/or international events organised and/or attended by the relevant authorities, and supporting these events on issues that fall within the authorities' own areas.

Establishment of the Competition Council of Turkic States

The Competition Council of Turkic States is being established by the members of the Organization of Turkic States, whose member states are Türkiye, Kazakhstan, Uzbekistan, Kyrgyzstan and Azerbaijan.

Summary of Key Decisions

A. Breach of Law Decisions:

Cement Industry Decision [1]

The Board concluded its investigation against nine undertakings [2] operating in the cement sector to determine whether the they violated Article 4 of the Law through information exchange.

Essentially, any information exchange that is determined to have the purpose of restricting competition is deemed to be a concerted practice or agreement restricting competition in terms of its purpose within the scope of Article 4 of the Law. On the other hand, when the issue is examined in terms of effect, it has been stated that information exchanges between competitors should be examined in terms of whether they have a restrictive effect on competition. In this respect, an evaluation has been conducted in line with this investigation by taking into consideration two main criteria: the first is the structure of the market, such as the degree of concentration, transparency, stability, stability, complexity and similarity (symmetry) of undertakings in the market, and the second is the nature of the information shared. In conclusion, no evidence has been found in relation to the violation of the Law by the investigated parties no administrative fine has been imposed.

EAE Elektrik Asansör Decision [3]

The decision is based on allegations that EAE Elektrik Asansör Endüstrisi İnşaat Sanayi ve Ticaret A.Ş. ("EAE") has a dominant position on the busbar systems market. An investigation was initiated to determine whether EAE violated Article 6 of the Law by applying predatory prices in all tenders in which it participated together with the complainant; that it applied high prices to compensate its losses in tenders in which the complainant did not participate; that technical specifications in both private and public tenders were prepared in a way to point to EAE products; and that EAE made misleading and derogatory statements to customers about the complainant's products, causing customers to buy its products instead of the complainant’s.

It has been stated that the allegation whereby EAE caused customers to purchase its products by making misleading and derogatory statements about the complainant's products cannot be evaluated within the scope of the Law and therefore no action can be taken under the Law.

The Board stated that the subject matter of the lawsuit should be handled within the framework of unfair competition regulations regulated under Article 54 et seq. of the Turkish Commercial Code No 6102. Therefore, the Board ruled that no action can be taken against EAE under competition law. In other words, it could be said that, with this decision, the Board has determined the boundary between "unfair competition" and "competition law".

- Settlement Decisions

It is noteworthy that, in the investigations conducted by the Board, competition infringements related to resale price maintenance ("RPM") [4] or restrictions on resale price have increased, as all of these investigations have resulted in settlements. The Board, which has conducted various investigations based on the RPM on a range of markets, such as cosmetics, personal health products and consumer electronics, has generally made the following assessments in its decisions:

It was stated that RPM is an infringement under Article 4 of the Law. Moreover, such agreements and acts are restrictive of competition for a purpose. Therefore, the relevant agreement or act is considered to be an infringement of competition regardless of whether it has an effect on the market or not. It was indicated that, in addition to the direct RPM, an infringement due to RPM may also lead to the same result indirectly through various practices.

• In the Farmasi decision [5] of 16 February 2023, it was evaluated that Farmasi Enternasyonal Ticaret A.Ş. regularly checks the prices applied by its resellers on internet sales channels, intervenes in the sales prices of resellers whose prices are below the catalogue prices, and imposes various sanctions such as closing the Farmasi entrepreneur page, blocking premiums and issuing warnings to resellers who sell below the catalogue price. In this context, Farmasi requested a settlement and it was decided to terminate the investigation within the framework of the submitted settlement text. As a result, a maximum rate of 25% reduction was applied in the administrative fine and an administrative fine of TRY 19,181,311.27 was imposed.
• In the Kozmoklinik decision [6] of 2 March 2023, it was determined that Kozmoklinik Kozmetik ve Medikal Ürünler Paz. ve Tic. A.Ş. established a pressure and incentive system by deducting a percentage from the year-end premium in case of a deviation in the resale price. It was stated that the relevant action is considered RPM, and therefore it is in violation of Article 4 of the Law. The investigation was concluded through a settlement procedure. As a result, a maximum rate of 25% reduction was applied in the administrative fine and an administrative fine of TRY 202,947.70 was imposed.
• In the Colastin decision [7] of 23 February 2023, it was stated that Colastin Sağlık Ürünleri A.Ş. sent a warning text to resellers via whatsapp indicating that if the resale prices differed from the price lists sent by Colastin, the lawyers of the undertaking would terminate the commercial relationship by using the trademark right, and that the relevant action was within the scope of RPM, and so in violation of Article 4 of the Law. The investigation was terminated with a settlement procedure. As a result, a maximum rate of 25% reduction was applied in the administrative fine and an administrative fine and an administrative fine of TRY 46,574.47 was imposed.
• In the Sunny decision [8] dated 5 January 2023, it was stated that Sunny Elektronik Sanayi ve Ticaret A.Ş. intervened in the resale prices of dealers, electro markets and other resellers, and thereby violated Article 4 of the Law. There are two other issues that need to be mentioned. The first is that Sunny also engaged in an act of restriction on internet sales, which is normally a different violation of Article 4 of the Law not related to RPM. However, it was evaluated that the relevant restriction is a complementary element carried out in order to prevent sales below the determined price and thus to facilitate the RPM. The second issue is that a hub and spoke examination was conducted within the scope of the file, but it was assessed as a RPM on the grounds that it did not meet the standard of proof. The reason for this is that the line between RPM and hub and spoke violations is indeed blurred. As a matter of fact, the investigation was terminated due to a settlement text submitted by Sunny. As a result, a maximum rate of 25% reduction was applied in the administrative fine and an administrative fine and an administrative fine of TRY 3,938,509.41 was imposed.

- Commitment Decisions

• In the Engingrup Decision [9] of 2 March 2023, it was determined that Yöntem Kozmetik A.Ş., M-M Kozmetik Tic. A.Ş., Magna Kozmetik Tic. A.Ş., Engin SDH A.Ş. and Engingrup Proje Yatırım A.Ş. are within the same economic integrity ("ENGİNGRUP") which is assessed as a sole undertaking in that case. During this sole undertaking assessment, issues such as whether the related undertakings are interdependent in terms of control and whether the directors of the undertakings are members of the same family are taken into consideration. As a result of the evaluation, it was stated that the strategic decisions originated from the same intention, and therefore, the undertakings concerned were accepted as a single economic integrity. It was determined that ENGİNGRUP intervened in marketplaces and online channels where re-sellers could sell, and that sales to be made over the internet were subject to authorisation. In this context, it was stated that Article 4 of the Law had been violated by restricting internet sales, but since there is no clear and severe violation, a commitment can be submitted. As a result, the investigation was concluded through a commitment procedure, since the Board assessed that the commitments were capable of eliminating the identified competition law concerns.

- Hub and Spoke Decisions

This month, the Board rendered several decisions regarding agreements or concerted practices referred to as hub and spoke cartels. A hub and spoke cartel, which is one of the atypical cartel types, is a cartel in which the information gathered through a hub undertaking is distributed to the spokes, thereby ensuring cooperation between the undertakings in the downstream or upstream market. In this type of cartel, the exchange of information can take two forms (i) a common provider in the upstream market (hub) can lead downstream retailers (spoke) to reach a common understanding, or (ii) a common retailer in the downstream market (hub) can lead upstream retailers (spoke) to reach a common understanding.

• In the Eczacıbaşı (Fast-moving consumer goods) decision [10] of 9 March 2023, the Board conducted an investigation to determine whether Eczacıbaşı Tüketim Ürünleri Sanayi ve Ticaret A.Ş. violated Article 4 of the Law by becoming a party to an hub and spoke cartel to coordinate the price increases of retailers, and through the RPM. According to statements in the relevant evidence, ECZACIBAŞI mediated the indirect sharing of competitively sensitive information including future prices between A101, CARREFOURSA and MİGROS, and by being a party to a collective-distribution type cartel by ensuring coordination in price increases. The Board determined that ECZACIBAŞI had violated Article 4 of the Law by RPM of the buyers operating in the downstream market. The investigation was concluded through a settlement text submitted by ECZACIBAŞI. As a result, a maximum rate of 25% reduction was applied in the administrative fine. It has been decided to impose an administrative fine of TRY 17,525,798.63 for the violation of the Law through hub and spoke cartel and an administrative fine of TRY 8,762,899.32 for the violation of the Law through RPM.
• Fast-moving consumer goods (FMCG) retailing decision [11]

The investigation was carried out to determine whether fifteen undertakings operating as producers/suppliers and five undertakings operating as retailers in the fast-moving consumer goods sector violated Article 4 of the Law. Within the scope of the concerned investigation, the Board points to a "hub and spoke cartel" that aimed to determine the retail prices of many products. In line with the documents included in the decision, it was confirmed that the hub and spoke cartel closely monitored the retail shelf prices of its products, intervened and raised the sales prices that were not at the desired level, and therefore the hub and spoke cartel re-determined the sales prices of the sellers. It was concluded that there had been a violation of Article 4 of the Law through agreements or concerted practices in the nature of a "hub and spoke cartel" with the retailers party to the investigation. It was also determined that the retailers are jointly and equally liable with the undertakings in question for this violation. In this context, sanctions were imposed under Article 4 of the Law for the undertakings involved in the investigation; however, it was decided not to impose a fine for some undertakings in accordance with the principle of "ne bis in idem," 12 a universal general principle of law known as a prohibition on double punishment. As a result of the assessment made as to whether there is more than one independent conduct prohibited under the relevant articles of the Law as a criterion for the imposition of administrative fines, it was concluded that compliance with the principle of "ne bis in idem" is ensured by preventing a possible duplicate fine that may arise if one conduct constitutes more than one competition violation.

B. M&A DECISIONS

• In its decision of 23 March 2023, the Board approved the acquisition of 100% of the shares in Groupama Investment Bosphorus Holding A.Ş. by AXA Mediterranean Holding S.A.U. [13]
• In its decision of 16 March 2023, the Board approved the acquisition of joint control over Otonet Motorlu Taşıtlar A.Ş. by HEDEF Araç Kiralama ve Servis A.Ş., Önder ERDEM and Ersan ÖZTÜRK. [14]
• In its decision of 2 March 2023, the Board approved the acquisition of joint control over Gürolteks Tekstil Turizm Ticaret A.Ş by Fun&Sun Hotels Otel İşletmeciliği Turizm A.Ş. on the one hand and Taff Investment Turizm A.Ş.on the other. [15]

Technology undertakings

In its decision of 30 March 2023, the Board approved the acquisition of joint control over Meltwater N.V. and its subsidiaries by funds managed by Altor Equity Partners Group and Marlin Equity Partners. Although the turnovers of the parties do not exceed the relevant thresholds, it was assessed that the transaction is subject to authorisation since Meltwater operates in the information technology services market and falls under the definition of a technology undertaking. It was concluded that there was no horizontal overlap and/or vertical relationship between parties' operations in Türkiye. On a global scale, although there is a limited horizontal overlap between the activities of Marlin's portfolio company and Meltwater, over which joint control will be established, this limited overlap will not have any negative impact on the Turkish market. [16]

In its decision of 22 December 2022, the Board approved the acquisition of part of the shares in Turan Teknoloji A.Ş., by Birleşik Ödeme Hizmetleri ve Elektronik Para A.Ş. controlled by Ordu Yardımlaşma Kurumu Oyak Genel Müdürlüğü. The Board evaluated that the activities of Turan Teknoloji fall under the definition of technology undertakings as its field of business comprises developing digital finance application for international money transfer. It is assessed that there will be no competitive concerns in the digital wallet services market where the horizontal overlap between the activities of Turan and Birleşik Ödeme and OYAK occurs, and there is no coordination risk in terms of the transaction on the grounds that the markets are fast-growing markets, open to innovation, there are many players in the market, these markets have not yet reached saturation and have not yet reached a high level of concentration, there are strong players in the market, there are new entries to the market and the market is expected to grow. [17]

C. EXEMPTION DECISIONS

Metlife Emeklilik ve Hayat - Denizbank Decision [18]

In its decision of 9 March 2023, the Board granted an individual exemption regarding the amended provisions of the Agency Agreement for Life Insurance executed between Metlife Emeklilik ve Hayat A.Ş. and Denizbank A.Ş. within the framework of Article 5 of the Law, provided that the non-solicitation obligation imposed on the parties after the termination of the agreement is limited to a maximum of five years after the termination of the agreement.

D. OTHER DECISIONS

Farmasi Enternasyonal Decision [19]

In its decision of 26 January 2023, the Board determined that Farmasi Enternasyonal Ticaret A.Ş. had submitted false/misleading documents during the preliminary investigation process and continued the same actions during the investigation process, and that this was considered as providing false/misleading information and documents within the scope of subparagraph (c) of the first paragraph of Article 16 of the Law, and therefore imposed an administrative fine to the relevant undertaking.

GBK Gayrimenkul Decision [20]

In its decision of 16 March 2023, the Board determined that GBK Gayrimenkul İnşaat Araç Kiralama İletişim Prodüksiyon Reklam ve Org. İç ve Dış Tic. Ltd. Şti. had hindered and prevented the on-site inspection and so it imposed an administrative fine of TRY 105,688.00 on the grounds of delayed arrival of the officials to the company and also of the refusal to allow telephone inspections without a court decision.

İpek Gıda Decision [21]

In its decision of 13 April 2023, the Board determined that İpek Gıda Dayanıklı Tüketim Malları Elektronik Eşya Tic. ve San. Ltd. Şti Istanbul Branch had hindered and prevented the on-site inspection and so it imposed an administrative fine due to the fact that one of the employees deleted a Whatsapp conversation on his mobile phone during the on-site inspection.

Çilek Gayrimenkul Decision [22]

In its decision of 16 March 2023, the Board determined that Çilek Gayrimenkul Abdurrahman Altunbay had hindered and prevented the on-site inspection and so it imposed an administrative fine of TRY 105,688.00 pursuant to Article 16 of the Law. During the inspection, the inspection committee gave permission to two of the company representatives to leave the company building due to the fact that a relative had a traffic accident and that there was an urgent situation in terms of life. However, it was understood from the information and documents obtained later that the situation was not sufficiently urgent to interrupt the inspection.

Summary of Important Decisions of the EU Commission

Pharma Companies Decision [23]

The European Commission has fined Alkaloids of Australia, Alkaloids Corporation, Boehringer, Linnea and Transo-Pharm a total of €13.4 million for participating in a cartel concerning an important pharmaceutical ingredient. The Commission's investigation revealed that six companies coordinated and agreed to fix the minimum sales price of SNBB to customers. In addition, the companies exchanged commercially sensitive information. This is the first time that the Commission has sanctioned a cartel in the pharmaceutical sector and in relation to an active pharmaceutical ingredient.

Acquisition of Seagen by Pfizer [24]

The European Commission has unconditionally approved the proposed acquisition of Seagen by Pfizer, under the EU Merger Regulation. The Commission concluded that the transaction would not raise competition concerns in the European Economic Area (‘EEA'). In particular, the Commission focused its investigation on potential competition between the parties' marketed and pipeline products. The parties' activities target different segments of patients and they are not substitutable since they do not have the same mode of action and concern different lines of treatment.

Acquisition of eTraveli by Booking [25]

The European Commission has prohibited, under the EU Merger Regulation, the proposed acquisition of Flugo Group Holdings AB (‘eTraveli') by Booking Holdings (‘Booking'). The acquisition would have allowed Booking to strengthen its dominant position on the market for hotel online travel agencies (‘OTAs') in the European Economic Area (‘EEA'). Booking did not offer remedies that were sufficient to address these concerns.

Acquisition of Thales' ground transportation business by Hitachi Rail [26]

The European Commission has approved, under the EU Merger Regulation, the proposed acquisition of Thales' ground transportation business (‘GTS') by Hitachi Rail. The approval is conditional on full compliance with commitments offered by Hitachi Rail. To address the Commission's preliminary competition concerns, Hitachi Rail offered to divest its mainline signalling platforms in France and Germany for interlockings, overlay and resignalling projects. These commitments fully address the competition concerns identified by the Commission.

1. Decision of the Board dated 23.11.2022 and numbered 22-52/787-323.

2. The companies under investigation are as follows: As Çimento Sanayi ve Ticaret A.Ş., Baştaş Başkent Sanayi ve Ticaret A.Ş., Çimsa Çimento Sanayi ve Ticaret A.Ş., Göltaş Göller Bölgesi Çimento Sanayi Ticaret A.Ş., Konya Çimento Sanayi A.Ş., Küpeliler Endüstri A.Ş., Limak Çimento A.Ş., OYAK Çimento A.Ş. and Votorantim Çimento Sanayi ve Ticaret A.Ş.

3. Decision of the Board dated 12.01.2023 and numbered 23-03/39-16.

4. For our relevant article about RPM, see: https://www.mondaq.com/turkey/antitrust-eu-competition-/1358862/turkish-competition-boards-favourite-breach-resale-pricemaintenance

5. Decision of the Board dated 16.02.2023 and numbered 23-09/143-42.

6. Decision of the Board dated 02.03.2023 and numbered 23-12/185-61.

7. Decision of the Board dated 23.02.2023 and numbered 23-10/166-52.

8. Decision of the Board dated 05.01.2023 and numbered 23-01/12-7.

9. Decision of the Board dated 02.03.2023 and numbered 23-12/186-62.

10. Decision of the Board dated 09.03.2023 and numbered 23-13/212-68.

11. Decision of the Board dated 15.12.2022 and numbered 2255/863-357.

12. For our article about ne bis in idem principle, see: https://www.mondaq.com/turkey/antitrust-eu-competition-/1238164/the-principle-of-ne-bis-in-idem-its-implementation-in-a-recentdecision-of-the-turkish-competition-board

13. Decision of the Board dated 23.03.2023 and numbered 23-15/258-88.

14. Decision of the Board dated 16.03.2022 and numbered 23-14/233-76.

15. Decision of the Board dated 02.03.2023 and numbered 23-12/192-65.

16. Decision of the Board dated 30.03.2023 and numbered 23-16/276-95

17. Decision of the Board dated 29.12.2022 and numbered 22-57/900-370.

18. Decision of the Board dated 09.03.2023 and numbered 23-13/216-71.

19. Decision of the Board dated 26.01.2023 and numbered 23-06/69-20.

20. Decision of the Board dated 16.03.2023 and numbered 23-14/245-81.

21. Decision of the Board dated 13.04.2023 and numbered 23-18/325-110.

22. Decision of the Board dated 16.03.2023 and numbered 23-14/243-79.

23. Case dated 19.10.2023 numbered AT.40636

24. Case dated 19.10.2023 numbered M.11177

25. Case dated 25.09.2023 numbered M.10615

26. Case dated 30.10.2023 numbered M.10507