Definition

The Law on the Protection of Competition No. 4054 ("Competition Law") is silent on the definition of abuse. It only contains a non-exhaustive list of specific forms of abuse in cases where the company is found to be dominant (Article 6). The Guidelines on Evaluation of Abusive Exclusionary Conducts by Dominant Undertakings ("Guidelines") enacted by the Turkish Competition Board ("Board") provides a definition as follows:

Abuse of a dominant position comprises the practices which the dominant company conducts by the advantage its market power brings about and consequently result in consumer welfare decrease, directly or indirectly.

Consequently, the determining factor in assessing whether a practice amounts to an abuse is the effect on the market, regardless of the type of the conduct at hand.

Forms of Abuse

The non-exhaustive list of specific forms of abuse stated under Article 6 of the Competition Law is as follows:

  1. Practices which directly or indirectly prevents another company from entering into the market or obstructs the existing competitors' activities in the market;
  2. Applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage,
  3. Selling a good/service on the condition of purchasing another good/service, or on the condition that the intermediary purchasers to display another good/service, or on the conditions of resale conditions maintenance,
  4. Practices which the dominant company aims distorting competitive conditions in a different market by using its financial, technological and/or commercial advantages in the market where it is dominant,
  5. Limiting output, markets or technical development to the prejudice of consumers.

Per the Guidelines there are specific forms of abuse; namely, discriminatory, exploitative and exclusionary. Exclusionary conducts comprise (i) refusal to supply, (ii) predatory pricing, (iii) margin squeeze, (iv) exclusive dealing/single branding1, (v) rebates and (vi) tying/bundling.

Sanctions

In case a dominant company or a trade association are found to have abused their dominant position, it will be subject to fines of up to 10% of its Turkish turnover generated in the financial year preceding the date of the fining decision (if this is not calculable, the turnover generated in the financial year nearest to the date of the fining decision will be taken into account).

Employees or members of the executive bodies who had a determining effect on the creation of the violation are also fined up to 5% of the fine imposed on the company or trade association.

The Board determines the rate of the administrative monetary fines on the basis of the methods stated in Article 17 of the Minor Offenses Law and the Regulation on Fines to Apply in Cases of Agreements, Concerted Practices and Decisions Limiting Competition, and Abuse of Dominant Position ("Fine Regulation").

Recent Notable Cases

In Unilever II (18.03.2021, 21-15/190-80), the Board decided that Unilever Turkey violated Articles 4 and 6 of Competition Law and imposed administrative fines separately for (i) abuse of dominant position through implementing anti-competitive discount systems in the ice cream market, and (ii) implementing a non-compete clause in its agreements with Getir, a mobile application for grocery delivery services. In terms of the violation under Article 6 of Competition Law, the Board stated that it evaluated the discount systems in 2016, 2017, 2018 and 2019. It also added that the investigated undertaking did not submit any information that the discount systems have been amended. Accordingly, the Board stated that the discounts have been implemented for a period longer than five years as of the date of the oral hearing on the investigation, and increased the base fine by one fold. As to the violation of non-compete obligation, the Board has taken into account the period between the (i) signing date of the contract with Getir and (ii) the date of the Additional Protocol terminating the non-compete condition, when assessing the duration. In this respect, the Board imposed an administrative monetary fine amounting to 480,217,217.26 Turkish Lira in total.

In Mey İçki II (11.03.2021, 21-13/173-74), the Board decided that Mey İçki San. ve Tic A.S. is in dominant position in the raki market and abused its dominant position by way of complicating the activities of the competitor through preventing the sales of competitor products in the sales points by applying certain discounts to the sales points and imposing conditions in their agreements which may affect the visibility of the competitor products in the sales points. However, the Board accepted the undertaking's defense based on the application of the ne bis in idem principle and decided not to impose a further administrative monetary fine under article 16 of Law No. 4054 due to the fact that it has already imposed a fine on the same undertaking for the same violation in its decision dated 12.06.2014 and numbered 14-21/410-178.

In Ortadoğu Antalya Liman İşletmeleri (3.03.2022, 22-11/169-68), the Board decided that Ortadoğu Antalya Liman İşletmeleri A.Ş. is in a dominant position in the market for container stuffing services and the practices of Ortadoğu Antalya Liman İşletmeleri A.Ş. led to the hindrance of the activities of its competitors within that market.

In Enerjisa (08.08.2018, 18-27/461-224), the Board assessed whether Enerjisa and its subsidiaries, which operate in the electricity sector in Turkey, abused its dominant position through various practices such as concluding illegal bilateral agreements with consumers, preventing consumers from switching to the independent supply companies and impeding market transparency through incorrect meter readings in order to mislead the consumers who are already eligible to supply from independent supply companies. Further to its evaluation, the Board found that Enerjisa abused its dominant position in the market for retail sale of electricity to industrial group through various practices impeding and foreclosing free competition in the market and thus, the Board decided to impose an administrative monetary fine amounting to approximately 143 million Turkish Lira.

In Radontek (11.10.2018, 18-38/617-298), further to an investigation launched against Radontek, a distributor of cancer diagnosis and treatment devices, the Board found that Radontek abused its dominant position in the aftermarket and spare parts by implementing excessive and discriminatory pricing on the tenders organized by hospitals. In this respect, the Board imposed an administrative monetary fine amounting to 248,548.62 Turkish Lira.

Footnote:

1. Exclusive dealing, non-compete provisions and single branding generally fall under the scope of Article 4 of Competition Law (Prohibited agreements, decisions and concerted practices); however, they can also come into play within the context of Article 6.