Two-minute Recap of Recent Developments in Turkish Competition Law – June 2023

In June 2023, the Turkish Competition Board (the “Board”) approved seventeen merger and acquisition transactions.

The highlight of Turkish competition law in June was the review and limitation of the Board’s onsite inspection authority from the constitutional perspective.

1. A New Era for the Board’s Onsite Inspections Has Begun

On 20 June, the Turkish Constitutional Court released a decision scrutinising the Board’s decision of 2011 that imposed an administrative fine against the renowned automotive company Ford Otosan. The Board based its decision to impose a fine, inter alia, on the evidence acquired during the dawn raid conducted at Ford Otosan’s premises.

Ford appealed to the Constitutional Court, claiming that the Board’s decision was unconstitutional due to the allegations that the Board’s decision contradicts the Constitution by infringing constitutional guarantees including (i) the inviolability of domicile, (ii) the right to property, (iii) the principle of double jeopardy (i.e., the principle of not being prosecuted twice for the same infringement), and (iv) the right to be tried within a reasonable time.

Below is a summary of the Constitutional Court’s assessments in relation to Ford Otosan’s claims:

i. Onsite inspections by the Board interfere with the inviolability of domicile. As per the Constitution, such interference can only occur with a judicial decision, except in non-delayable cases. Therefore, conducting onsite inspections without a judicial decision is unconstitutional, unless the case is non-delayable.

ii. Regarding the allegations that concern the infringement of the right to property, the penalty imposed on the applicant was based on a clear, specific, and foreseeable law. The interference with the right to property (i.e., the Board’s penalty) also has a legal basis, and the fine imposed is suitable, proportionate, and essential, hence such penalty is not unconstitutional.

iii. The Board’s decisions that indicate the lack of need for launching an investigation may be regarded as “acquittal”. However, such decisions must be made after evaluating the evidence. In this case, as per the Board’s decision on 24 June 2009, the Board decided not to initiate an investigation against the applicant. However, given that the Board’s re-investigation of Ford Otosan is based on new evidence, the re-investigation does not violate the principle of double jeopardy.

iv. The duration between the initiation of the second preliminary investigation and the completion of the administrative judicial process, which took nine years, is unconstitutional, as such duration infringes on the right to be tried within a reasonable time.

As a result of these assessments, the Constitutional Court has ruled that the Board cannot carry out onsite inspections without a judicial decision. The Constitutional Court has also instructed that a copy of the decision be sent to the legislative body, expecting them to make any necessary adjustments in Law No. 4054 on the Protection of Competition accordingly.

2. The Board Launched an Investigation Against Google

On 19 June, Turkish Competition Authority (the “Authority”) announced that the Board has launched a full-fledged investigation against Google after the completion of its preliminary investigation. Accordingly, the Board will scrutinise the allegations related to tying and self-preferencing practices in the context of online display advertising and advertising technology activities.

3. The Oral Defence Stage of the Wide-Reaching No-Poaching Investigation Will Be Held in July

As announced on 15 June, the Board will hold an oral hearing on the investigation concerning the alleged no-poaching agreements between multiple undertakings on 18 and 19 July. Since 2021, the Board has carried out a full-fledged investigation against more than 35 undertakings in order to scrutinise the allegations that these undertakings entered into “gentlemen’s agreements” to avoid competing with each other in the labour market. This investigation is expected to serve as a milestone in Turkish competition law, and its outcome is also expected to shed light on other on-going labour market investigations.

4. The Authority Announces the Oral Defence Dates of Many Investigations

The Authority announced the dates of the oral defences regarding the investigations involving numerous undertakings, which include many well-known companies (e.g., Trendyol, Sahibinden, EssilorLuxottica, Samsung and LG Electronics). A table with the dates, the undertakings concerned, and the allegations to be scrutinised as part of these investigations is given below: