Turkey: The Board published its reasoned decision on the preliminary investigation conducted against Yüce Auto Motorlu Taşıtlar Tic. A.Ş. and Doğuş Otomotiv Servis ve Tic. A.Ş

Last Updated: 16 March 2017

The Board published its reasoned decision on the preliminary investigation conducted against Yüce Auto Motorlu Taşıtlar Tic. A.Ş. and Doğuş Otomotiv Servis ve Tic. A.Ş. (16.11.2016, 16-39/649-290)

The Turkish Competition Board (“Board”) recently published its reasoned decision on the preliminary investigation conducted against Yüce Auto Motorlu Taşıtlar Tic. A.Ş. and Doğuş Otomotiv Servis ve Tic. A.Ş., based on the allegations that Yüce Auto Motorlu Taşıtlar Tic. A.Ş. (“Yüce Auto”) that is the distributor of Skoda vehicles, has violated the Block Exemption Communiqué No. 2005/4 for Vertical Agreements and Concerted Practices in the Motor Vehicle Sector (“Communiqué No. 2005/4”)[1] by implementing discriminatory applications amongst its authorized sellers and/or services. In 1999, Yüce Auto and Doğuş Otomotiv Servis ve Tic. A.Ş (“Doğuş Otomotiv”) has initiated a partnership regarding the Skoda brand.

The Board indicated that in line with the previous Competition Board decisions[2] the relevant product market could be defined as “the market for new personal automobiles” and “the market for after sales services with respect to Skoda vehicles”, however did not make a precise relevant product market definition by making reference to the Paragraph 20 of the Competition Authority’s Guidelines on Relevant Market, which states that that the market definition can be left open in cases where the transaction in question does not raise competition law concerns regardless of the market definition.

In its evaluation, the Board firstly determined that the allegations are concerned with the vertical agreements concluded between Yüce Auto and its distributors. The Board indicated that the vertical agreements concluded between undertakings on different levels of supply chain are evaluated in scope of the Article 4 of the Law No. 4054. In addition the Board stated that the Article 5 of Law No. 4054 provides conditions that, if met, may exempt agreements, decisions by associations of undertakings and concerted practices from the prohibition of Article 4 of Law No.4054 and also empowers the Board to issue communiqués that set forth the conditions to grant block exemption to certain types of agreements. The Block Exemption Communiqué No. 2005/4, issued based on this authority, indicates that those vertical agreements concerning the purchase, sale or resale of new motor vehicles, their spare parts or repair and maintenance services, which contain vertical limitations are exempt from the prohibition set forth in the Article 4 of the Law No. 4054, provided that they meet the conditions provided in the Communiqué No. 2005/4. In this respect, the Board assessed the allegations in scope of the case file pursuant to the relevant provisions of the Communiqué No. 2005/4.

The Board indicated that according to the paragraph 51 of the Guidelines on the Explanation of the Block Exemption Communiqué No. 2005/4, if a certain brand’s authorized service network is above the %30 market share threshold, solely the qualitative distribution systems can benefit from the block exemption.[3] In light of the foregoing, the Board determined that it is likely that Skoda’s market share is above the %30 threshold with respect to after sales services and accordingly, Yüce Auto has adopted qualitative distribution system both in the after sales market and sales market.

With regards to the evaluation on whether the notice periods and grounds for termination[4] are applied on the contrary to the relevant provisions of the Communiqué No. 2005/4, the Board indicated that the compliance with the notification termination periods and grounding termination on valid grounds are foreseen as conditions for benefitting from the Communiqué No. 2005/4; however, as stated within the previous Board decisions[5] the breach of such conditions cannot be deemed as an explicit competition law violation that is evaluated within the framework of Article 4 of the Law No. 4054. In this regard, the Board asserted that the allegations that Yüce Auto applies the notice periods in appearance and/or that it applies the notice periods contrary to the purpose of the Communiqué No. 2005/4 brings about private law disputes that are outside the scope of the Competition Authority’s duties and authorities. Therefore, the Board decided that the allegations do not fall within the scope of the Law No. 4054.

The Board then evaluated the allegations that the distributors were not treated equally by Yüce Auto. With regards to the allegation that in scope of the Investment Construction Business Plan application, additional periods were granted towards some of the distributors while some of the distributors’ projects were not evaluated or delayed, the Board found that the relevant matter requires technical assessment and evaluation. Therefore the Board decided that the allegation falls outside the scope of the Law No. 4054. With regards to the allegation that the Octavia model was not sent to the distributors in equal amounts, the Board found that the difference between the vehicle numbers designated to the distributors is derived from the sales and projections conducted by the distributors and therefore the allegations do not reflect the reality. With regards to the allegation that different rebate rates applied amongst the distributors and some distributors are allowed to sell below the recommended prices, the Board found that Yüce Auto does not interfere with the prices and rebate rates applied by the distributors. The Board indicated that different types of rebates are valid concurrently and applied provided that the required conditions are met. In addition, the Board stated that Yüce Auto applies a recommended price system, however the distributors are free to apply prices below or above the relevant prices and therefore, the distributors are free to compete with one another by decreasing prices. Therefore, the Board did not find any violation in terms of Law No. 4054 with respect to the relevant allegation. With respect to the allegation that the fleet sales requests are referred to certain distributors instead of being met by the distributor who receives the customer, the Board found that demands directly received by the distributors are not referred to certain other distributors by Yüce Auto.

With regards to the allegation that Yüce Auto forces the distributors to use Shell and Castrol motor oils the Board found no evidence indicating that Yüce Auto engaged in such applications. The Board also stated that the rest of the claims asserted against Yüce Auto do not fall within the scope of the Law No. 4054.

In light of the foregoing, the Board refrained from initiating a full-fledged investigation.


[1] The New Block Exemption Communiqué No. 2017/3 for the Vertical Agreements in the Motor Vehicle Sector in Turkey (“Communiqué No. 2017/3”) has been published in the Official Gazette dated 24 February 2017. In this regard, the Communiqué No. 2017/3 revoked the Block Exemption Communiqué No. 2005/4 for Vertical Agreements and Concerted Practices in the Motor Vehicle Sector (“Communiqué No. 2005/4”). At the time of this decision (16.11.2016, 16-39/649-290), Communiqué No. 2005/4 was in effect.

[2] The Competition Board’s decision dated 24.10.2013 and numbered 13-59/833-355

[3] According to the Guidelines on the Explanation of the Block Exemption Communiqué No. 2017/3 for the Vertical Agreements in the Motor Vehicle, the general conditions for vertical agreements to benefit from the block exemption are (i) the market shares of the parties must not exceed the specified threshold in the relevant market and (ii) the parties’ must comply with the termination notice periods for the vertical agreement which are regulated under Communiqué No. 2017/3. To that end, paragraph 18 of the Guidelines states that in cases where the parties’ market share are below the 30% threshold and the exclusive distribution system, a quantitative distribution system or a qualitative distribution system is applied, the relevant vertical agreement is deemed to meet the first condition set forth in Communiqué No. 2017/3. Moreover the vertical agreements where the parties’ market shares are above 30% can benefit from the block exemption granted by Communiqué No. 2017/3, provided that a qualitative distribution system is applied.

[4] The provisions included within the Communiqué No. 2005/4 related to the termination-notice periods (six-month-notice period for the agreements that are made for at least five years; at least two-year-notice period for the agreements with an indefinite period) as the second condition for an agreement to benefit from block exemption have been preserved in Communiqué No. 2017/3. However, a detailed, reasoned and written termination notice suppliers is no longer provided as a condition in order for an agreement to benefit from the block exemption.

[5] The Competition Board’s decision dated 08.01.2009 and numbered 09-01/8-7 and the decision dated 10.04.2008 and numbered 08-28/325-108.

This document is not intended to create an attorney-client relationship. You should not act or rely on any information in this document without first seeking legal advice. This material is intended for general information purposes only and does not constitute legal advice. If you have any specific questions on any legal matter, you should consult a professional legal services provider.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Contact the Author?
Click here to email the Author
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Other Turkey Advice Centres
Tax
Intellectual Property
Privacy and Data Protection
More Advice Centers
Significant Recent Cases
Turkish Competition Board case summaries.
Useful Resources
A collection of articles, essays and reports written by our experts.
On the occasion of the 20th anniversary of competition law practice in Turkey, we have written and published an academic publication we hope will be valuable to the global discussion and study of competition law issues. The book is comprised of 12 academic articles and is a collaborative effort of lawyers specialising in competition law at ELIG Gürkaynak, including junior associates and novices in the field, in addition to Gönenç Gürkaynak’s own extensive contribution to each and every article.
The most recent developments within our firm and practice areas.
Upcoming Events
Information on upcoming or recent events and conferences hosted by ELIG Gürkaynak Attorneys-at-Law.
ELIG Gürkaynak has hosted a Turkish competition law webinar in collaboration with Lexology. During the webinar, head of our competition law and regulatory practice, Mr. Gönenç Gürkaynak, introduces remedies and Phase II reviews under the Turkish merger control regime.
Tools
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions