Turkish Law Blog

Recent Developments Relating Google Android Decision of the Turkish Competition Authority

Hatice Zümbül Hatice Zümbül/ Zümbül Attorneys at Law
19 December, 2019
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Founding Attorney Hatice Zümbül – Legal Intern Mehmet Turgut

I. Introduction

The Turkish Competition Authority (The TCA) carried out an investigation on 09.02.2017 in order to determine whether the contracts issued between Google and producers of the device and the Google Economic Integration’s practices breach the fair competition or not.

At the end of investigation, the TCA had held the final decision regarding whether the economic integration occurred by Google LLC, Google International LLC, and Google Advertising and Marketing Limited Company, mobile operating system and mobile application and the acts about providing services and the contract issued between the economic integration in question and the producer of the devices infringe the law numbered 4054 or not.

II. TCA’s Sanctions

 The Authority decided that;

1. The economic integration created by Google LLC, Google İnternational LLC and Google Advertising and Marketing Limited Company is the domination position in the market of the licensed mobile operating system.

2. The acts taken place in the contract issued between Google economic integration and the producer of devices that the Google search engine is determined as default search engine and the Google search engine is taken place on the main screen, and Google WebView is only chosen as a tool regarding relevant function breach article 6 of the Law numbered 4054. In addition to these behaviors, the articles included the Revenue Sharing Contracts allowing the Google Search engine to be exclusively downloaded in the devices also infringe article 6 of the Law numbered 4054.

3. In this sense, it was held that Google LLC, Google İnternational LLC, and Google Advertising and Marketing Limited Company have been penalized conjointly to pay 93.083.422,00 TL.

4. Even though other responsibilities taken place in the Contracts in relevance with other Google applications do not violate the law, to provide the publicity of the producer of devices and to avoid probability concerns to providing competition, an article indicating clearly that other rival applications can be downloaded in the devices with Google applications shall be put in the contracts.

5. To terminate the infringements, and to provide effective competition in the market, it was decided that;

  • In the contracts which is made by google economic integration with who the producer of the devices willing to use Commercial Android Operating System in the devices which are planned to be sold in Turkey,
  • The articles regarded as a condition of licensing which mandate directly or indirectly that Google Search Engine is mandatory to be seen on the man screen shall be removed from the contracts,
  • The terms regarded as a condition of licensing, which allow  Google Search Engine to be appointed as only search engine in the all wireless access points shall be removed from the contracts and no be added any new terms in the contracts allowing Google search engine to be only appointed all search points which may be revealed after the choice of design,
  • The terms regarded as a condition of licensing indicating directly or indirectly that Google WebView is downloaded as assumed and exclusive application shall be removed from the contracts,
  • Google shall not apply any way which may occur the situation banned by these three obligations,
  • In addition to removing from Revenue Sharing Contracts signed with the producer of devices, the phrase that rivals of Google Search Engine shall not be downloaded in devices and producers of devices shall not use any products of rivals of Google in any search points, shall be removed from any contracts available.

6. The changes in contracts Google must do in accordance with liabilities mentioned above shall be certified to the Turkish Competition Authority within 6 months after the notification of the final decision.

The decision can be appealed to Ankara Administrative Courts within 60 days after the notification of the decision.

III. Google’s Position to the Sanctions

In this sense, under 6. section of this decision, Google must have met the obligations imposed by the TCA within 6 months. However, according to the TCA, Google has failed to fulfil its obligations so that the TCA has taken new action on Google’s practices. It was stated by the TCA that starting from 7 December 2019 Google has been imposed fine at the rate of 5 per ten thousand of its return in 2018 Turkey. It is equal to 1.5 million TL per day.

Upon this penalization, allegedly, Google sent the letter to its business partners. It is mentioned in the letter that Google will stop to license Android phones to use Google applications in Turkey if the situation is not fixed. Google has announced by written notice to GSM(Global System for Mobile Communications) operators as of 12 December, Google may cancel licenses of the devices which has already being sold in Turkey, and will not to give new license to the devices which will be introduced to the Turkish Market after the date in question. It is stated that Google Search, Google Play, YouTube, Gmail, and other Google applications will not be used in Android Phones in Turkey.

In the notification, Google also asked their customers to press on the Minister of Economy and the Head of Turkish Competition Authority through mail/phone by giving their contact information in order to revoke the decision or fix the problem. Otherwise, Google may take a decision to completely pull out of the market. If Google applications are not allowed to be used, GSM firms in Turkey may face important economic loss.

IV. TCA’s Press Release as respond to Google’s Notification

Recently, upon the notification of Google, the TCA published press release concerning this problem with Google.  In the press release, the summary of events and decisions they took was given. The TCA announced that;

The TCA announced that;

  • In this sense, at the end of the investigation, it was found that Google has impeded its rival’s search engine to be used, and has financially supported producers of the mobile device under the condition that Google shall be an only search engine in the mobile devices,
  • In this context, Google was fined in accordance with the Law numbered 4054 and given 6 months to meet the obligations. However, on 6 August 2018 Google has failed to meet its obligations so that dating from 07.11.2019 Google has been daily administrative fined,
  • Google’s practices subjected to the investigation were also investigated in Russia and the European Union (the EU). The investigation carried out by the Federal Antimonopoly Service of the Russian Federation was completed on the ground of Google’s undertaking aimed at termination of the practices in question. Also, The EU commission fined Google 4.34 Billion Euros for abusing fair competition. Moreover, The EU required Google labilities which are wider that the TCA did, and Google satisfied all requirements,

At this point, Google like they did in Other Countries, necessarily fulfills requirements in Turkey.

V. Conclusion

Upon the crisis encountered between the TCA and Google, it is worried that whether Google will obey the obligations or not. In the second scenario, GSM firms in Turkey are anxious to face economic losses. According to the International Independent Computation Company, ‘Statcounter’, Android is powered 8 in 10 phones in Turkey. Therefore, if Google pulls out of the Turkish Market, and not allow its application to be used, it may importantly affect the GSM economy in Turkey. On the other hand, the TCA is not willing to step back because of Google’s approaches in Russia and the EU.

 

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