On 24 January 2023, the Board released its reasoned decision regarding the acquisition of sole control over Alleghany Corporation by Berkshire Hathaway Inc. In its decision, the Board applied the new merger control regime for technology undertakings and clarified its scope of application. As a reminder, the turnover threshold requirement set out in Communiqué No 2010/4 does not apply in determining whether a transaction is subject to the authorisation of the Board in respect of undertakings operating in "digital platforms, software and gaming software, financial technologies, biotechnology, pharmacology, agricultural chemicals and health technologies."
The main area of activity of the target company – Alleghany Corporation – is reinsurance. More specifically, it manages investments in property and casualty reinsurance and insurance businesses and supports its subsidiaries active in these fields. In addition, Alleghany Corporation produces and sells software for managing reinsurance companies, which is regarded as within the scope of the definition of a technology undertaking. Alleghany Corporation does not have any subsidiaries or affiliated entities in Türkiye, but is active through its subsidiaries in non-life reinsurance and the manufacturing of trailers.
In its decision the Board determined that as Alleghany Corporation is also active in the field of financial technologies, it is exempted from the turnover threshold of TRY 250 million set out in Communiqué No 2010/4. The Board confirmed that a target company does not need to operate in the exempted sectors in Türkiye in order for the sectoral threshold exception to be applied, so long as it generates turnover abroad in those sectors and conducts any activity in Türkiye.
In this context, it was concluded that the turnover threshold requirement set out in Communiqué No 2010/4 will not be sought in determining whether a transaction is subject to the authorisation of the Board in respect of undertakings operating in the exempted fields of activities in any geographical market and carrying out any activity in Türkiye, or has assets related to them.
The Board has authorised Google LLC to acquire the sole control of Mandiant Inc., a cyber-security company that provides corporate cyber security consultancy, especially in connection with incident response.
The Google/Mandiant Decision is an another example of the application of the specific M&A notification rules for technology undertakings. The Board evaluated that the software services provided by Mandiant classifies it as a technology undertaking within the scope of Communiqué No 2010/4 and applied the sectoral threshold exemption for the target company according to the Article 7(2) of Communiqué No 2010/4.
The Board granted approval for Tech Data Türkiye Holding A.Ş. to acquire sole control of Tech Data Bilgisayar Sistemleri A.Ş. ("Tech Data Türkiye") which is currently controlled by Tech Data Turkey Holding A.Ş. and Sanko Holding A.Ş. Tech Data Türkiye provides solutions in the areas of data security, data storage, virtualisation, network solutions and next-generation information technologies to its customers, and Tech Data Türkiye Holding A.Ş. provides cloud, cybersecurity, and big data/ analytics services to its customers. The Board determined that the transaction was subject to approval of the Board, due to the fact that the turnovers of the transaction parties' surpass the thresholds set out in Communique No 2010/4. Of note, even though the Board assessed the field of activities of the undertakings that may be considered falling within the scope of the exemption for the specific merger control regime for "technology undertakings", the Board did not make its assessment on whether the transaction is subject to the approval of the Board on the sectoral threshold exemption of Article 7 of Communiqué 2010/4.
On 30 July 2021, Monsanto Gıda ve Tarım Ticaret Ltd Şti, ("Monsanto"), producer of agricultural seeds, applied to the Board to obtain negative clearance/exemption for the additional protocol to be executed with 11 dealers. The additional protocol included clauses regarding recommendations of resale prices and determining the maximum resale price. The Board refused to grant negative clearance to the additional protocol on the grounds that maximum and recommended sale prices provided by Monsanto may pose competitive risks, as such prices may serve as a reference for resellers while determining their sale prices, so the majority or all of resellers may comply with these prices, leading to emergence of a fixed price and providing such prices may lead resellers and providers to cooperate on the sale prices. However, taking into account Monsanto's market share in the relevant product market and the dealers' ability to set the resale prices freely and independently, the additional protocol was granted exemption under the Block Exemption Communiqué on Vertical Agreements No 2002/2.
In its reasoning, the Board first examined the market shares of Monsanto and its competitors in the relevant market, using the new market share threshold, which entered into force after Monsanto's application and during the Board's review period. The Board determined that Monsanto's market share was below the threshold (i.e. 30%) and thus the Board concluded that the additional protocol contained no restraints that would exclude vertical agreements from the scope of the block exemption. However, the Board underlined that granting an exemption would not relieve Monsanto of its legal responsibility to not turn the recommended and maximum resale price practices into price fixing. The decision is noteworthy due to the market share threshold being amended after Monsanto's application, from 40% to 30%, but was still applied to Monsanto.
Novo Nordisk Decision
The Board granted an exemption to Novo Nordisk Sağlık Ürünleri Ticaret Ltd. Şti., a provider operating in the pharmaceuticals market, for a Single Supplier Framework Agreement concluded with Özsel Ecza Depoları Ticaret ve Pazarlama A.Ş., an operator at the wholesale distribution level, regarding procurements of the State Material Office.
The agreement in question granted Özsel exclusive rights to monitor, participate, and provide products in DMO procurements and tenders made by e-bidding for Novo products. Additionally, the agreement contains a clause prohibiting Özsel from taking part in tenders containing competing products. Meanwhile, the scope of the prohibition's was determined only to DMO tenders for drugs and medical supplies within Türkiye, and those intended for the healthcare market. Consequently, the exclusivity and anti-competition restriction applies only to the DMO tenders related to the products mentioned in the Agreement.
In its decision, the Board concluded that, as per the agreement, certain drugs such as Insulatard, Actrapid, Mixtard, Norditropin, Nordiflex, Novoeight, and Novofine benefit from the group exemption as defined in the Vertical Agreements Group Exemption Communiqué 2002/2. However, the Board concluded that certain products (namely Levemir, Novomix, Novorapid, Novoseven, Ryzodeg, and GlucaGen) are not eligible for the group exemption because of the fact that the threshold set by the communiqué are exceeded, but can still benefit from the individual exemption as long as all of the conditions established by Article 5 of the Law are met.
On 17 January 2020, the Board launched a preliminary investigation to determine whether banks and financial institutions operating in Türkiye, as well as their representatives, have violated the Law in respect of their activities related to deposit, credit, foreign exchange, bond, bill, stock, and brokerage services. In its decision dated 26.08.2021, the Board decided not to launch an investigation though this decision is interesting since it is related to the high volume of data obtained by the Board during the course of preliminary inquiry.
During the preliminary inquiry, on 5 February 2020, the Board asked 21 undertakings for Bloomberg and Reuters chat room records of their top 10 traders with the highest transaction volume in Turkish Lira in the United States and the United Kingdom (separately for each country). Five of the undertakings subject to this request (JP MORGAN, CITIBANK, INGBANK, GOLDMAN SACHS and GARANTİ BANKASI) failed to respond to the Board for various reasons, so a second request was sent together with the threat of a fine.
INGBANK, JP MORGAN, and CITIBANK duly provided the information/document upon the Board's request.
A lawsuit filed by INGBANK to cancel the information request was dismissed by Ankara 3rd Administrative Court on 4 March 2021, No 2020-1303, E. 2021-447 K.
However, the same court cancelled the Board’s decision to impose fines on GARANTİ BANKASI, GOLDMAN SACHS, JP MORGAN, and CITIBANK following lawsuits filed by those undertakings.
As a result of these administrative court decisions, CITIBANK and JPMORGAN asked the Board to destroy all highly sensitive and confidential personal data and client/banking secrets obtained within the scope of the information.
In its assessment, the Board concluded that there is no court decision ordering the return or destruction of the data obtained, and the appeal process is pending due to conflicting court decisions. Therefore, the Board ruled that the request for the deletion or return of the obtained data should be denied.
In a dissenting opinion, one Board member argued that the data in question should not be used and/or given to anyone until the appeal process is finalised, or until the final judgement.
The Board imposed an administrative fine on Türkiye Kozmetik Sanayi ve Ticaret A.Ş. for obstructing and hindering an on-site inspection by employees deleting WhatsApp correspondence on their mobile devices after the start of the on-site inspection. One of the significant aspects of the decision concerns the assessment of the usage of WhatsApp's message retraction feature as evidence of hindering/obstruction. The Board noted that a conversation between colleagues, regardless of its brevity, was unlikely to contain critical information relevant to the investigation and that the action of retraction stated in the minutes regarding WhatsApp could not be considered as an act of deleting a digital record. This assessment indicates that the Board evaluated the retraction of the messages in its context and did not immediately classify it as an act of hindering/obstructing of the on-site inspection.
Naos Cosmetics Decision
Within the scope of the preliminary inquiry into allegations that undertakings in the cosmetics and personal care sector had fixed the resale prices of their resellers and restricted online sales, the Board imposed an administrative fine on Naos İstanbul Kozmetik San. ve Tic. Ltd. Şti.("NAOS") for obstructing and hindering the on-site inspection.
During the on-site inspection conducted at the headquarters of NAOS, it was determined that the mobile device used by a NAOS employee, who stated that it was his only phone and did not contain Whatsapp, a contact list, call records or any correspondence. Given the fact that this situation aroused suspicion, a second on-site inspection was carried out at the headquarters of NAOS. During the second on-site inspection, Whatsapp messages exchanged with the NAOS employee who stated that he did not use Whatsapp in the first on-site inspection were detected in the mobile phones of other NAOS employees.
Following the information exchanges with the Information and Communication Technologies Authority regarding the GSM line and IMEI numbers, the Board has detected that the NAOS employee had removed the SIM card from his mobile device with the first IMEI number and put it into an empty mobile device with the second IMEI number.
Recent Developments in European Competition Law
The French Competition Authority has decided to submit an opinion on its own initiative in order to analyse the competitive functioning of the electric vehicle charging infrastructure sector.
The French Competition Authority has launched an investigation to scrutinise the competitive operations of the electric vehicle charging infrastructure industry. This investigation aims to assess the competitive practices and dynamics followed by the stakeholders in this sector. Additionally, the investigation will explore sustanaible development perspectives to address any identified issues. The Authority will engage with the relevant actors in the industry and consult competent authorities to formulate its opinion, which is expected to be released in the first half of 2024 along with recommendations, if necessary.
The Italian Competition Authority adopted a guidance on new "sub-threshold" merger legislation
On 2 January 2023, the Italian Competition Authority issued a notice outlining new provisions for notifying mergers and acquisitions that do not meet the turnover thresholds set out in Italy. Under the new provision, the Italian Competition Authority may request that undertakings concerned by a relevant transaction notify a concentration, when certain conditions are met, such as only one of the two turnover thresholds being exceeded or the total worldwide turnover of all the undertakings concerned exceeding EUR 5 billion. The Italian Competition Authority may request the notification within six months from the completion of the concentration. These new competencies allow the Italian Competition Authority to scrutinise potentially problematic transactions that, under the current system, would not undergo control. The new legislation intends to limit the burden on undertakings facing the self-assessment of potentially reportable concentrations.
OECD Competition Trends 2023 has been published
The OECD recently published a note consisting on "Competition Trends 2023". The note essentially focuses on the main developments in global competition enforcement in 2021, and contributes to continuously improving competition law and policy around the world based on data from 79 OECD and non-OECD countries.