Turkey: The Turkish Constitutional Court Ruled That The Dawn Raids Of The Turkish Competition Authority Carried Out Without A Court Decision Are A Violation Of The Constitution

Introduction and Ford Turkey's Application

The main legal instrument of the competition authorities in obtaining evidence is on-site inspections. In order to attain evidence regarding the suspected violation or to prevent the destruction of the evidence, said on-site inspections ought to have a nature of a raid, hence the term "dawn raid" is also used for referring such inspections.

As per its application, Ford Türkiye (the "Applicant") sets forth that the right to inviolability of the domicile can only be interfered with a court decision and dawn raids conducted by the Turkish Competition Authority (the "TCA") in its facilities per Article 15 of Act No. 4054 on the Protection of Competition ("Competition Act") (which authorizes the Competition Board (the "Board") to conduct on-the-spot inspections) in accordance with the investigation conducted against the company does not hold adequate legal guarantees¹.

In this regard, among other claims, the Turkish Constitutional Court (the "Court") analysed the constitutionality of the dawn raids conducted by the Turkish Competition Authority pursuant to the procedure foreseen under the Competition Act and concluded that the Article 15 of the Competition Act, and thus, the dawn raid conducted pursuant to the said article violated Applicant's right to inviolability of the domicile which is guaranteed per Article 21 of the Constitution².

Analysis of the Court

Article 15 of the Competition Act defines the limits of the TCA's powers regarding dawn raids. In particular, the Board may perform inspections at companies' facilities in cases it deems necessary. In this respect, the Board does not generally require a court order when conducting a dawn raid.

On the other hand, Article 21 of the Constitution guarantees that the domicile of an individual shall not be violated. Unless there exists a decision duly given by a court on one or several of the grounds of national security, public order, prevention of crime, protection of public health and public morals, or protection of the rights and freedoms of others, or unless there exists a written order of an agency authorized by law in cases where delay is prejudicial, again on these grounds, no domicile may be entered or searched or the property seized therein.

In that sense, as such a determination is crucial for the legitimacy of the Board's authority regarding dawn raids, the Court initially provided that the buildings and facilities of companies can be regarded to be within the scope of inviolability of domicile considering its prior case law³.

Subsequently, the Court stated that, even though Article 21 of the Constitution permits that the domicile of an individual may be entered or searched or the property seized therein per a written order of an agency authorized by law in cases where a delay is prejudicial, Article 15 of the Competition Act gives the Board a broad authority to carry out dawn raids, without any specific limits regarding "cases where a delay is prejudicial"⁴. Besides, the Court further provided that there are no provisions per the said provision where it is ensured that the decision of the Board shall be submitted for the approval of the judge having jurisdiction within twenty-four hours as also guaranteed per Article 21 of the Constitution⁵.

Considering the foregoing, the Court concluded with the majority of the votes that the dawn raid conducted in the facilities of the Applicant is in accordance with Article 15 of the Competition Act, however, violates the right to inviolability of the domicile which is guaranteed per Article 21 of the Constitution⁶. Accordingly, the Court also provided that, considering that the violation of the right to inviolability of the domicile in the current case stems directly from the procedure foreseen under Article 15 of the Competition Act, in order to avoid potential future violations, a copy of the decision shall be sent to the Grand National Assembly of Türkiye, to be considered in the further legislative actions to be taken regarding provision in accordance with the constitutional principles⁷.

What does the European Court of Human Rights say on inviolability of the domicile?

It should be noted that the European Court of Human Rights ("ECtHR") also considers that business premises shall be regarded within the scope of inviolability of the domicile under Article 8 (Right to Respect for Private and Family Life) of the European Convention on Human Rights ("ECHR").

Accordingly, in its Niemietz Judgement⁸ dated 1992, the ECtHR concluded that business premises should also be regarded within the scope of inviolability of the domicile under Article 8 of the ECHR. That conclusion of the ECtHR is based on the facts that (i) it is not possible to make a definitive separation between domiciles and workplaces and (ii) the concept of domicile should be interpreted as to include workplaces, since such an interpretation would also be in line with the main objective of Article 8 of the ECHR, which is to protect individuals from the arbitrary practices of public authorities⁹.

Besides, in its Colas Est Judgement in particular, ECtHR assessed whether the dawn raid conducted by the French Competition Authority violated the inviolability of domicile under Article 8 of the ECHR and once again emphasised that (i) the buildings of undertakings should also be regarded as domicile, (ii) the powers of the French Competition Authority to conduct dawn raids were very wide and (iii) an effective judicial review to prevent the arbitrary exercise of such powers is essential¹⁰. Since the search (dawn raid) was not preceded by a judge's order and the law enforcement officers did not supervise the dawn raid (lack of prior judicial oversight), the ECtHR concluded that the dawn raid was not to the extent necessary in a democratic society and thus, there had been a violation of Article 8 of the ECHR¹¹.

In a similar vein, the more recent Delta Pekarny Judgement of the ECtHR is also crucial in this sense¹². In the judgement, the powers of the Czech Competition Authority within the framework of dawn raids were evaluated in terms of the inviolability of the domicile pursuant to Article 8 of the ECHR. Accordingly, the ECtHR stated that the Czech Competition Authority's failure to obtain a judge's decision prior to the dawn raid of the undertaking's premises was contrary to Article 8 of the ECHR, as there was no effective subsequent judicial review of the relevant dawn raid¹³.In any case, Article 8 of the ECHR provides that the inviolability of the domicile is not an absolute right and a public authority's disturbance to the inviolability of the domicile would be legitimate in case (i) interference is provisioned by law, (ii) it has a legitimate aim, and (iii) it is of a measure that would be necessary in a democratic society.

Other Determinations of the Court

In addition to the determination of the Court of a violation regarding right to inviolability of the domicile, the Court also unanimously ruled that a period of 9 years, 10 months and 26 days between the date of the initiation of the TCA's preliminary investigation and the date of the finalization of the administrative judicial process was against the right to a fair trial that is guaranteed by Article 36 of the Constitution¹⁴.

Besides, even though the most important aspect of the decision concerns dawn raids, the Court's decision discusses various other topics, such as effect analysis for information exchange allegations¹⁵ and inclusion of export sales into gross sales when calculating administrative fines¹⁶.

Why to wait the Court's Decision? Why not a retrial?

As provided above, it is interpreted from the wording of the decision that, considering that the violation of the right to inviolability of the domicile in the current case stems directly from the procedure foreseen under Article 15 of the Competition Act and thus a retrial per the same legislation would lead to a similar result (in other words, the violation does not stem from the application of the legislation to the specific case but stems directly from the legislation itself), the Court stated that there is no need for a retrial due to absence of legal interest¹⁷.

However, Article 90 (5) of the Constitution provides that in the case of a conflict between international agreements, duly put into effect, concerning fundamental rights and freedoms and the laws due to differences in provisions on the same matter, the provisions of international agreements shall prevail.

Accordingly, it could also be considered that the decisions of the ECtHR on the interpretation of Article 8 (Right to Respect for Private and Family Life) of the ECHR, to which Türkiye is a party (and also, duly put into effect), should have already been binding for the TCA and the Turkish courts for years. Therefore, it could also be argued that a retrial would have led to a different outcome, against the Court's evaluations.

It could even be stated based on this interpretation that the current decision of the Court in fact does not change anything but a reminder to the TCA and the Courts that ECtHR's decisions on the interpretation of the ECHR shall also be binding in any case.

What is next?

It is expected from the Grand National Assembly of Türkiye to work on a new legislative amendment to solve the discrepancy between the Competition Act and the Constitution. For the time being, it could be assumed that any future dawn raid that lacks a prior court's decision would try to endure strong legal challenges before the courts, since the Court clearly found such dawn raids to be in violation of the Constitution.

Footnotes

1. The Court's Decision dated 23.03.2023 with the application number 2019/40991, para. 1.

2. Ibid, para. 66-68.

3. Ibid, para. 54-57.

4. Ibid, para. 64.

5. Ibid, para. 65.

6. Ibid, para. 188.

7. Ibid, para. 185.

8. ECtHR's Niemietz v. Germany Judgment dated 16.12.1992 with the application number 13710/88.

9. Ibid, para. 30-31.

10. ECtHR's Société Colas Est and Others v. France judgement dated 16.04.2002 with the application number 37971/97, para. 40-41.

11. Ibid, para. 48-50.

12. ECtHR's Affaire Delta Pekarny A.S. v. Czech Republic judgement dated 02.10.2014 with the application number 97/11.

13. Ibid, para. 83-94.

14. The Court's Decision dated 23.03.2023 with the application number 2019/40991, para. 176.

15. Ibid, para. 87-88 105-106, 110-112.

16. Ibid, para. 90, 138.

17. Ibid, para. 185.

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