Possible Affects Of The Recent Amendments On The Administrative And Judicial Supervision Of The Turkish Competition Authority’s Actions

The Decree Law on the Organization and Duties of the Ministry of European Union and Amendment of Some Laws and Decree Laws (the "Decree Law"), which was published on the Official Gazette dated August 17th 2011, brings about certain questions with respect to the methods of administrative remedies against the acts and actions of the Turkish Competition Authority and the judicial supervision of the said acts and actions.

The following sentence has been added to the first paragraph of Article 19/A of the Law numbered 3046 with Article 45 of the Decree Law:

Through this amendment, the new version of Article 19/A of the Law numbered 3046 is now as below:

The Turkish Competition Authority (the "Authority") is also mentioned among the administrative authorities in the table numbered III, attached to the Law of Public Fiscal Administration and Control numbered 5018.

1. The said amendment does not stipulate an administrative method which is mandatory to be utilized before resorting to administrative judiciary, against the acts and actions of the Authority, which create rights and obligations for third parties and/or an amendment in third parties' legal statuses. Thus it is still possible to resort directly to administrative judiciary against such acts of the Authority and the relevant practice is still valid.
2. The administrative method which is mandatory to be utilized will only be used if the relevant law stipulates a special objection method¹. However, the said amendment does not stipulate any special objection method.
3. It is accepted that the supervision system over the independent administrative authorities (such as the Authority) is separated into three main categories²: (i) administrative supervision, (ii) fiscal supervision and (iii) judicial supervision. Thus the administrative/fiscal supervision of the independent administrative authorities and the judicial supervision thereof are different. Since it is not possible to claim that ministries can have judicial supervision authority, it would not be possible to claim that the said amendment brings any changes on the system of judicial supervision over the acts and actions of the independent administrative authorities either. The amendment has to be evaluated within the scope of the administrative and fiscal supervision of the independent administrative authorities (the aspect of administrative tutelage will be evaluated below). In determining which acts of the Authority are and are not subject to administrative and fiscal supervision, it is accepted to adopt a separation between the Authority's "decisions and acts related to the application of the Law No. 4054 on Protection of Competition" and the "decisions which are adopted regarding its own internal affairs and administration"³. Accordingly, the decisions of the Turkish Competition Board (the "Board") are deemed to be subject to judicial supervision and not administrative/fiscal supervision. On a different note, it is deemed necessary that the Authority and other independent administrative authorities are subject to both administrative and fiscal supervision with respect to their expenses and acts regarding their own internal affairs and administration, such as the purchase/sale/lease of a building, purchase of goods and tools and recruitment⁴.
4. Thus, amendment brought with the Decree Law does not change the system of judicial supervision of the acts of the Authority that create rights and obligations for third parties and/or the mandatory administrative methods that should be resorted against these acts.
5. It is accepted that, aside from judicial supervision, the Authority is not subject to hierarchy or (prior to the new amendment) to an administrative supervision in the nature of an administrative tutelage with respect to its activities⁵. This is a definite fact with respect to hierarchy: the central administration (ministries) should not have "hierarchic powers" over independent administrative authorities (such as the Authority). That is to say, the central administration should not be able to give orders or instructions to independent administrative authorities and should not be able to annul or amend their acts. Independent administrative authorities possess a separate legal entity other than that of the central administration, thus the central administration cannot have a power of hierarchy over these authorities⁶. The new amendment does not bear any effects on this situation. Although different views exist, the same is accepted with respect to the administrative tutelage as well^7,8,9. Thus it is accepted that such relations between independent administrative authorities and the central administration (ministries) could not be interpreted as if the central administration (ministries) has the powers of repeal, amendment or annulment over the decisions of independent administrative authorities¹⁰. It could be claimed that the new amendment grants a certain amount of administrative tutelage to the ministries, to which the said administrative authorities are related, over the said administrative authorities. According to Gözler, "The state has not granted itself with any kind of power of tutelage over the independent administrative authorities up to this point, for the duly performance of the duty vested in the independent administrative authorities. This does not mean that it shall not do so later or that it is deprived of the opportunity to do so, though. There quasi is 'tutelage' between the state and the independent administrative authorities. However, this is an emptied state. Inside is not filled with powers, but it could be filled later." An interpretation that this amendment filled this gap could be valid. However administrative tutelage is a limited and an exceptional power and the whole scope of this power should be explicitly stipulated in the law¹¹. In the present case, the law, instead of bringing such regulation, has adopted a very large scoped and vague wording of "it is authorized to supervise any activity and act". However, even such wording does not seem to create an objection method against the acts of the Authority since the relevant article of the law does not mention an administrative method, and no such interpretation was made with respect to the application of other laws, which adopt similar wordings¹². Furthermore, an interpretation that the power of administrative tutelage constitutes an objection method which is mandatory to be utilized would have no legal or scholarly basis. Even in cases in which the administrative tutelage is explicitly stipulated, this does not bear effects on the judicial supervision. It seems possible to conclude that the ministries were granted with "vague power of tutelage of which the scope is not duly determined". At this point, it should be mentioned that similar provisions of law which contained granting of such vague powers were annulled by the Constitutional Court¹³. In any case, it does not seem possible to claim that the said amendment abolishes the "independence" of the Authority and other independent administrative authorities within the scope of the Decree Law.
6. However, it seems possible to claim that the said amendment results in the creation of an "optional" method against the acts and actions of the Authority. Upon the use of such method, it could be possible that the relevant ministry resorts to judiciary and/or realizes other acts based on the powers it is granted by the law against the act or activity of the Authority. Hence:
   
   
   1. The Law No. 4054 on Protection of Competition already specifically stipulates that the Authority is related to the Ministry of Industry and Commerce (the Authority was later related to the Ministry of Customs and Commerce in July 2011).
   2. It is discussed that the said relationship between the Authority and the ministry to which it is "related", grants the said ministries with such powers as to resort to administrative judiciary for the non-compliant acts of the authorities or to force the Court of Accounts and the State Supervision Institute to carry on fiscal supervision¹⁴.
   3. This situation should not be interpreted as though the ministry, to which the Authority is related, is vested in with the Authority to directly initiate a lawsuit in case a non-compliance with law, which could constitute a crime, is detected, or other similar authorities¹⁵. Ministries are authorized and obliged to refer the non-compliances with law which they detect or doubt to the authorized legal and/or administrative authorities.
      
      
7. The amendment does not bear any relevance to the option of resorting to superior authorities within the scope of Article 11 of the Administrative Judiciary Procedural Law Numbered 2577. The relevant provision refers to a superior authority which is placed in a hierarchic system and the right provided within the relevant provision may only be used before a superior authority which is placed in a hierarchic system¹⁶. There does not exist a hierarchic relationship between the Authority and the ministry it is related with. Please note that as per the decision of the Council of State Board of Administrative Judiciary Chambers, numbered 2006/2169 E. and 2010/562 K. the right to resort to the Turkish Competition Board against the decisions of the Turkish Competition Board is reserved.
8. Finally, even if the Council of State were to interpret and specify the said amendment as an administrative method which is "mandatory to be utilized" and if the administrative judiciary were resorted to without utilizing this method, the court, upon its first examination on the file would refer the file to the relevant ministry as per Article 15/e of the Administrative Judiciary Procedural Law. Administrative judiciary refers the case files to the relevant administrative organs because of "abuse of administrative organ" in case a lawsuit is initiated before resorting to administrative methods. The date on which the administrative judiciary is resorted is accepted as the date on which administrative organ is resorted to¹⁷. Thus, even if the de-facto scope of the amendment is taken into consideration, the amendment does not seem possible or likely to cause a loss of rights.

Footnotes

1. İbrahim Topuz – Kadir Özkaya, Administrative Judiciary Procedural Law with Explanations and Precedents, Ankara, 2002, p. 279.

2. Dilek Memişoğlu, p. 11. It is furthermore mentioned that there is also legislative and public supervision, which are of no legal nature, over the independent administrative authorities.

3. Dilek Memişoğlu, p. 11.

4. Dilek Memişoğlu, s. 11.

5. Şeref Gözübüyük – Turgut Tan, Administrative Law General Principles, Book 1, Ankara 2006, p. 372-373. However the independent administrative authorities and the ministries to which they are "relevant" or "related" are stipulated under law.

6. Şeref Gözübüyük – Turgut Tan, Administrative Law General Principles, Book 1, Ankara 2006, p. 372-373.

7. Dilek Memişoğlu, The Independent Authorities and Their Supervision in Turkey, p. 10, http://idc.sdu.edu.tr/tammetinler/demokrasi/demokrasi47.pdf

8. "The Independent Administrative Authorities' ("IAA") ties with the central administration is established through their establishment laws, by way of determining the "relevant" or "related" ministries. Since the power of tutelage is merely stipulated with respect to local administrations within the constitution, the matter that the relevant or related ministry does not have power of tutelage over the decisions of the IAA would not be in violation of the constitution." Ebru Öztürk, Where the Competition Authority Stands in Turkish Administrative System and the Comparison Thereof with Other Independent Authorities, Competition Authority Expert Thesis, Ankara 2003, p. 25.

9. For a different point of view please see Kemal Gözler, Administrative Law p. 174. The author claims that the independent administrative authorities could well be subject to administrative tutelage, however the legislator has not yet adopted any such regulation.

10. Kemal Gözler, Administrative Law p. 491.

11. Kemal Gözler, Administrative Law p. 174.

12. Şeref Gözübüyük – Turgut Tan, Administrative Law General Principles, Book 1, Ankara 2006, p. 379-380; Although the previous version of Article 17 of the Capital Markets Law Numbered 2499 contained wording as "any kind of acts", this was interpreted as to cover only the yearly accounts and expenses of the Capital Markets Authority.

13. Constitutional Court, 22.6.1988, E.987/18 , K. 988/23.

14. Şeref Gözübüyük – Turgut Tan, Administrative Law General Principles, Book 1, Ankara 2006, p. 373; A. Ulusay, Independent Administrative Authorities, Council of State Journal, No 100, p. 15.

15. The fiscal, administrative and judicial supervision of the said independent administrative authorities are carried out as per their specific laws and the relevant legislation. Article 17 of the Capital Markets Law Numbered 2499 stipulates that the relevant minister supervises the Board's annual accounts and expenses and takes relevant precautions regarding the results of the supervision. As per the explicit provision within Article 33 of the Law Numbered 4054 on Protection of Competition, the accounts of the Competition Authority are subject to supervision of the Court of Accounts. Article 34 (5) of the Law Numbered 6112 on the Establishment and Broadcast Services of the Radios and Televisions, the Superior Board of Radio and Television is subject to supervision of the Court of Accounts.

16. Celal Erkut, Selçuk Soybay, The Constitution and Laws Related to Administrative Judiciary, p. 282.

17. Şeref Gözübüyük, Administrative Judiciary, Ankara 2003, p. 163.

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