The Board published its reasoned decision on the preliminary investigation conducted against Islab Tıbbi Malzeme Sağlık Hiz. San. Ve Tic. A.Ş. (13.10.2016, 16-33/573-249)
The Turkish Competition Board (“Board”) recently published its reasoned decision on the preliminary investigation conducted against Islab Tıbbi Malzeme Sağlık Hiz. San. Ve Tic. A.Ş. (“Islab”), based on the allegations that Islab has abused its dominant position by refusing to supply the gel system that is used for the brucella agglutination test, to 4K Medical Sağlık Hiz. Ltd. Şti (“4K Medical”). Islab is established for the purposes of the manufacture of technological medical kits and relevant devices; while 4K Medical provides technical services, medical devices and consumables to approximately 50 hospitals located in the Eastern Anatolia Region.
In its assessment, the Board firstly found that the allegations subject to the case at hand are concerned with a unilateral conduct deemed as refusal to supply within the framework of Article 6 of Law No. 4054 on the Protection of Competition (“Law No. 4054”). In this respect, the Board stated that there are two conditions required to be cumulatively met in order to determine that there is a violation under Article 6 of the Law No. 4054; that are: the relevant undertaking must be in a dominant position and the relevant undertaking’s conduct must constitute an abuse of dominance. Before determining whether Islab is in a dominant position within the relevant market, the Board firstly decided to assess whether Islab’s conduct subject to the allegations constitute an abuse of dominance.
The Board stated that under the Guidelines on the Assessment of Abusive Conduct by Undertakings with Dominant Position, when assessing the claims of refusal to supply, the Board looks for the presence of all of the following three conditions in order to find a violation within this framework, (i) the refusal to should relate to a product or service that is indispensable to be able to compete in a downstream market, (ii) the refusal should be likely to lead to the elimination of effective competition in the downstream market, (iii) the refusal should be likely to lead to consumer harm. Before making an assessment on the foregoing conditions, the Board stated that the competition law is mainly focused on conducts involving refusal to supply, where the undertaking that is refused from access to a certain input is the competitor of the undertaking that is in a dominant position. The Board further stated that the anticompetitive effects that might arise in the foregoing instance may not arise in cases where the undertaking refused from access to a certain input is a merely reseller or distributor of the undertaking that is in a dominant position, since there won’t be any substantial competition between the two undertakings.
As a result of its assessment, the Board asserted that the gel system subject to the allegations cannot be deemed as indispensable to be able to compete in a downstream market from 4K Medical’s perspective; since 4K Medical is merely reselling the relevant product without providing any added value and operates with a significantly wide range of product portfolio. Additionally, the Board also found that there are objective justifications for Islab’s refusal to supply, since there is legal a requirement, conditioning registration to National Data Bank and becoming an authorized distributor prior to making any bids in tenders regarding Islab’s products.
In light of the above, the Board therefore, did not initiate a full-fledged investigation.
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