This Competition Law Newsletter provides information on the latest developments in relation to the Turkish competition market and the implementation of the 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").
Competition Market Overview
The Board rendered 157 decisions between 25 May and 25 August 2022. The distribution of these decisions was as follows:
- 90 decisions regarding merger and acquisition notifications;
- 29 decisions regarding breaches of competition law;
- 10 decisions regarding negative clearance and exemption applications; and
- 28 decisions regarding other issues.
All of the breaches of competition law were investigation decisions. The companies involved in these were mainly active in agriculture, online car sales and the textile sector. As a result of the Board's decisions, administrative fines corresponding to a total of TRY 13,576,154 (approximately EUR 744,420,96) were imposed on the companies that were found to be in breach of the Law.
Legislation and Announcements
Increase in the turnover thresholds regarding the pre-notification requirement for acquisitions by way of privatisations
According to the latest amendment, 1 the existing turnover threshold for an undertaking subject to privatisation was increased from TRY 30 million (approximately EUR 1.6 million) to TRY 250 million (approximately EUR 13.7 million).
Accordingly, in an acquisition via a privatisation within the scope of Communiqué No 2013/1, if the turnover of the undertaking or unit intended for the production of goods or services to be privatised exceeds 250 million Turkish liras, then a pre-notification must be filed with the Authority before the public announcement of tender specifications. Such a pre-notification is requested in order to reveal the opinion of the Board on the effects of the relevant privatisation on the market from a competition law perspective, as well as the Board's consideration of any potential problems that may arise within the framework of Article 7 of Law No 4054. The opinion of the Board will serve as the basis for preparing the tender specifications.
This amendment was a follow-up to the change in the turnover threshold for mergers and acquisitions subject to the approval of the Board (see our previous Client Alert). However, it is unclear whether the same amendment was necessary for privatisations. In 11 out of the 38 privatisation decisions since 2015, the Board decided that the transactions were not subject to pre-notification because the TRY 30 million threshold was not exceeded. With numbers like these, the new amendment will likely lead to an increase in the number of such out-of-scope decisions, as opposed to M&A transactions.
Expansion on the scope of "turnover" definition
Before the recent amendment, annual gross income (turnover) was defined as the income corresponding to net sales within a company’s uniform chart of accounts. If it is not possible to calculate that amount, the income that is nearest to the net sales in that year should be determined by the Board. Following the amendment, 2 the definition of annual gross income has been expanded to include other accounting items, e.g. ordinary revenues and profit from the other activities item, in addition to the net sales item. Accordingly, if it is detected that an undertaking has recognised any income from its main activities under an accounting item such as ordinary revenues and profit from other activities that is not taken into account whilst calculating the net sales, then the amounts in question will also be included in the calculation of the company’s gross income.
The Board has continued its series of investigations in various sectors as follows:
- Technology markets/shops: Media Markt Turkey Ticaret Limited Şirketi, Teknosa İç ve Dış Tic. A.Ş., Vatan Bilgisayar San. ve Tic. A.Ş. and Sunny Elektronik San. ve Tic. A.Ş. on 18 May 2022. 3 The companies will be subject to an investigation in relation to an alleged exchange of competition sensitive information, banning internet sales of the sellers and/or deciding the resale price, acting as intermediary for the indirect exchange of information. This investigation is expected to shed light on the recent discussions on vertical restrictions applied to online sellers. Due to accelerated developments on the online sales market (e.g. the expansion of Getir, Trendyol's listing on Nasdaq etc.), further investigations by the Board in this regard are expected to be launched in the near future.
- IT systems: as a result of the investigation launched on 16 June 2022 against Obilet Bilişim Sistemleri A.Ş., it was found that the company was restricting competition by determining excessive ticket sale commission rates and excluding its competitors from the market.
- Food: Tadım Gıda Maddeleri San. Ve Tic. A.Ş was the subject of an investigation launched on 12 August 2021 in relation to its alleged abuse of a dominant position on the relevant market, with exclusionary practices and interfering with the prices of dealers. During the investigation process, Tadım Gıda Maddeleri San. ve Tic. Inc. filed an application to initiate the commitment process to address the competitive concerns and a comprehensive commitment package was presented. The Board decided to conclude the investigation by making the relevant commitment package binding, considering that the commitments in question are proportionate to the competition problems, suitable for eliminating these problems, can be fulfilled in a short time and can be implemented effectively.
- Domestic appliances: Electrolux Dayanıklı Tüketim Mamülleri Sanayi ve Ticaret A.Ş.,Çetinler Dayanıklı Tüketim Malları,Uğur Soğutma Makinaları Sanayi ve Ticaret A.Ş, Miele Elektrikli Aletler Dış Ticaret ve Pazarlama Ltd. Şti. were subject to investigations launched on 30 June 2022.
- E-platforms: (i) Also on 30 June 2022, another investigation was launched against Sahibinden Bilgi Teknolojileri Paz. Ve Tic. AŞ, a company active in the sales/leasing of real estate and vehicles. The company is being investigated in relation to its alleged abuse of a dominant position by over-pricing, (ii) D Elektronik Şans Oyunları ve Yayıncılık A.Ş. (Nesine.com) was subject to an investigation launched on 7 July 2022 in relation to alleged vertical agreements that include exclusivity and (iii) an investigation was launched against car sales companies Arabam Com Internet ve Bilgi Hizmetleri A.Ş., Vava Cars Turkey Otomativ A.Ş., Araba Sepeti Otomotiv Bilişim Danışmanlık Hizmetleri Sanayi ve Ticaret A.Ş. and Letgo Mobil İnternet Servisleri ve Ticaret A.Ş on 21 July 2022
- Mobility App/Scooter: On 10 August 2022, an investigation was launched against the technology company Martı İleri Anonim Şirketi due to the abuse of its dominant position on the relevant market. The investigation was concluded on 8 September 2022 without any penalty being imposed, thanks to commitments filed by the company.
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