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

Hub & spoke and resale price maintenance – two separate offences?

On 4 October 2023, the Turkish Competition Authority published its reasoned decision on 15 undertakings active as suppliers/manufacturers in the fast-moving consumer goods sector.[1] The case concerned whether these retailers were engaged in resale price maintenance and/or acted as a “hub” for retailers to communicate future prices. As the Turkish Competition Board already fined the retailers in a previous decision,[2] which was the predecessor of this decision, the retailers walked away without any additional fines.

A noteworthy point is that the Board insisted on viewing RPM and being a “hub” in hub & spoke agreements as two separate offences and rejected the defence that one fine should be imposed on the undertakings for acting as a hub and engaging in RPM.

Another hub & spoke related decision was a settlement decision published on 19 October 2023. [3] The topic of discussion was the separation between hub & spoke and RPM. The Board states that hub & spoke “cartels” warrant a higher standard of proof than “traditional cartels” and remarks that a concurrence of wills between the “spokes” (retailers in this case) should be established.  Moreover, the Board seems to draw a line between reproaches by buyers to suppliers about the prices of others and situations where the buyers come to a common understanding on prices to be applied with the help of the supplier.

Dual distribution – still vertical but with a touch of horizontal?

On 2 October 2023, the Authority published its commitment decision on Mavili, an undertaking active in fire and gas detection systems.[4] With this decision, the Board terminated the active and passive sale restriction part of the investigation, but the case remains on-going on alleged RPM violations.

The case includes assessments on whether customer or territorial restrictions in a dual-distribution scenario can be viewed as horizontal. The Board stated that Mavili was active on the repair and maintenance market through its subsidiary. On this basis, the Board stated that it suspected a cartel between Mavili and its authorised servicers. However, since the dawn-raids were conducted and no evidence establishing a collusion was found, the Board concluded that there can be no horizontal agreement. With this in mind, the Board stated that customer and territorial restrictions were put in place by Mavili as the supplier, and therefore it is a vertical restraint.

To date, the Board has considered the customer and territorial restraints put in effect during a dual- distribution scenario as vertical restraints.

The Turkish Competition Authority’s last four years and what is to come

On 11 October 2023, the Authority published a statement by its president Birol Küle, in which he discusses the Authority’s recent studies. According to Mr Küle the Authority will continue to scrutinise the digital sector. There is currently legislation pending on digital platforms.

In other developments, Mr Küle stated that the administrative monetary fines increased within the last four years. According to him, a total of EUR 346 million was imposed as fines. Additionally, a total of EUR 27.8 million was imposed as a result of settlements.  It seems that the Authority is gearing towards more activity in all sectors, but with a particular focus on digital markets.

Data protection and competition law – an important alliance between authorities

On 26 October 2023, the Authority announced the signing of a Cooperation and Information Sharing Protocol with the Personal Data Protection Authority. It was stated that the need for inter-authority cooperation is inevitable due to the increasing impact of big data and the digital economy. Accordingly, the authorities are aiming to establish effective competition and increase the control of consumers over their personal data.

Competition law cooperation between Turkic States grows

On 19 October 2023, the Authority announced that the Organization of Turkic States, composed of Turkey, Kazakhstan, Uzbekistan, Kyrgyzstan and Azerbaijan, with Hungary, Turkmenistan, and Northern Cyprus as observers, will collaborate to establish the “Competition Council of Turkic States”. It was announced that the Council members will engage in joint efforts to promote a culture of competition across the region.

[1] The Board’s Retail II decision, dated 15.12.2022 and numbered 22-55/863-357.

[2] The Board’s Retail I decision, dated 28.10.2021 and numbered 21-53/747-360.

[3] The Board’s Sunny decision, dated 05.01.2023 and numbered 23-01/12-7.

[4] The Board’s Mavili decision, dated 30.03.2023 and numbered 23-16/285-99.

* The original version of this article is available here.