Turkey: The Turkish High State Court Annulled the Turkish Competition Board's Decision on the Export Ban

The Turkish High State Court ("High Court") has recently rendered its decision in which it reviewed the Turkish Competition Board's ("Board") decision^[1] regarding the allegations that Roche had violated Articles 4 and 6 of the Law on the Protection of Competition ("Law No. 4054") by way of engaging in anticompetitive agreements and by its refusal to supply its products to the complainant.

The background of the Board's decision, which has been appealed to the High Court, can be summarized as follows: The complainant, Corena, a pharmaceutical warehouse, alleged that the export ban in the Sales Agreement that was concluded between Roche and various pharmaceutical warehouses for the distribution of Roche products ("Agreement") violated Article 4 of the Law No. 4054. Moreover, the complainant also claimed that Roche had prohibited pharmaceutical warehouses from selling Roche products to Corena.

In its evaluation of the allegation regarding the export ban, the Board stated that the export ban may be evaluated under Article 4 of the Law No. 4054, as the ban would be considered as a resale condition for the goods and services in question. In this regard, the Board determined that it was important to ascertain whether the restriction in question had any effects on the Turkish market within the scope of Law No. 4054. Following its evaluation, the Board concluded that the export ban in the Agreement only concerned the sales of Roche products outside of Turkey, and thus determined that it did not have any effects on the Turkish market. Accordingly, the Board held that the complainant's allegation regarding the export ban requirement in the Agreement fell outside the scope of the Law No. 4054.

As for Corena's other allegation (i.e., that Roche had prevented other pharmaceutical wholesalers from selling Roche products to Corena), the Board stated that there was not sufficient evidence to conclude that Roche had forced the wholesalers not to supply Corena with Roche products. The Board also determined that the complainant had failed to provide adequate information with regards to the potential effects and the magnitude of Roche's alleged conducts. Therefore, the Board held that there wasn't sufficient evidence to substantiate Corena's claims. Moreover, the Board also noted that the complainant's uncooperative approach and its lack of collaboration during the preinvestigation process had raised doubts concerning the merits of its allegations. As a result of the foregoing findings and considerations, the Board decided not to initiate a full-fledged investigation against Roche.

Corena subsequently appealed the Board's decision to the High Court. Following their review of the case, the High Court's investigating judge and the prosecutor concurred in their opinion and decided to reject the complainant's application, as they concluded that the Board's decision did not constitute an infringement of competition law. However, the High Court disagreed with the opinions of the investigating judge and the prosecutor in its evaluation of the complainant's allegations. In fact, the High Court stated that it was evident that Roche's actions (which formed the basis of Corena's allegations) had an effect on the Turkish market. Furthermore, the High Court declared that the evidence put forth by Corena in the annex to its complaint petition had not been sufficiently examined by the Board, and that the Board should have investigated the claims more thoroughly instead of deciding not to launch a full-fledged investigation. Consequently, the High Court annulled the Board's "no-go" decision regarding Corena's allegations. Following the High Court's ruling, the Board has recently announced on its website that it has initiated a full-fledged investigation in this matter against Roche^[2].

Although the High Court did not provide concrete explanations or expound on how export bans would have an effect on the Turkish market, its judgment is nevertheless significant, as it may introduce a new front and open up new investigative paths, thus expanding the Board's established precedents on export bans.