Some hostilities last forever. Just like Tom and Jerry, Batman and the Joker or Madonna and ageing, the antagonism between the Turkish Competition Authority (TCA) and the Turkish Pharmacists' Association (TEB) does not seem to be ending soon. A new clash has begun with the two monetary fines recently imposed by the TCA to the TEB1 for failing to provide information on time and refusing to provide information altogether. The sanctions target two separate actions of the TEB that occurred during the preliminary inquiry launched by the TCA to investigate the allegations concerning the TEB's abuse of its dominant position.
First, the TCA issued that there was a violation of the Competition Law since the information and documents that were requested by the TCA officials were not provided within the due time. Indeed, the Competition experts had asked the TEB to provide them with the documents containing its turnover data before the 26th of March. As the requested documents were sent to the TCA 4 days after this deadline, the TCA decided by unanimity of votes that this behavior constituted a violation of Article 16. In fact, subparagraph (c) of the first paragraph of Article 16 clearly states that a violation occurs when the "information or document is not provided within the determined duration". No further discussion seems necessary about this fine since the wording of the Article is indisputably clear.
The second fine, on the other hand, was much more controversial. The TCA held that the refusal of the Association's general secretary to provide oral information during the dawn-raid was unlawful. Indeed, during the dawn-raid, Competition experts asked a series of questions to the general secretary who refused to answer by stating that he was not authorized to deliver such information and that he lacked competence to represent the TEB. The crucial point here is that the general secretary based his claims on a decision of the 13th Chamber of the Council of State2 that handled a very similar case. That incident was almost the same with the case at hand as it was also related with a TCA decision whereby an administrative fine was imposed on the TEB due to the general secretary's refusal to provide oral information during the on-the-spot inspection. Although this decision was first upheld by the 13th Chamber, the Plenary Session of the Chambers for Administrative Cases had annulled its ruling. Eventually, the 13th Chamber also confirmed that the fine was unlawful given that the general secretary was not competent to represent the Association in those matters.
Despite this decision, the TCA held that a sanction had to be imposed, arguing that the circumstances of the two cases were different. While the questions asked to the general secretary during the previous case were indeed very broad (questions included topics like the determination of the reduction rates that the pharmacies could apply in their contracts with public and private institutions), the TCA argued that this was not the case this time. More precisely, the experts had only asked for "concrete documents and information" such as the protocols signed with the Social Security Institution. According to the TCA, such information could have been given by the general secretary within the boundaries of his authority. In addition, the general secretary had indicated that a written response would be given by the Central Committee, without mentioning when exactly the Committee would meet. Such a conduct was unacceptable for the TCA given that the preliminary inquiry has to be completed within 30 days, according to Article 40. For all of the above mentioned reasons, the TCA decided by majority of votes that this behavior constituted a violation of Article 16(1)(c) as a document or information was not provided at all.
But what does this mean regarding the extensity of the TCA's power to ask questions during on-the-spot inspections? Does the TCA have the right to address questions to any person it choses?
A pertinent comprehension of the current status in Turkey requires a wider look at the different practices around the world. In the European Union, according to Article 20 (2) (e) of Regulation no: 1/2003, "The officials and other accompanying persons authorized by the Commission to conduct an inspection are empowered (...) to ask any representative or member of staff of the undertaking or association of undertakings for explanations on facts or documents relating to the subject-matter and purpose of the inspection and to record the answers." In this regard, undertakings may want to designate a specific person to answer the questions. Usually, questions are asked to the person authorized by the undertaking to respond on its behalf (the legal director for example). Even if the Commission can decide to directly ask particular questions to certain people that it choses, this faculty must stay exceptional given the difficulties that it may cause3. In addition, claims made by these people (who are not warranted by the undertaking) can be corrected later on. Only the statements of the designated person are immediately binding for the undertaking4. There are also national specificities on this matter. In France, only the occupying person of the premises can be addressed questions (i.e., to the person to whom the court warrant shall be notified to or his or her legal representative). In Romania, competition experts may ask questions to the representatives of the undertakings or other members in charge of the coordination of the inspected undertaking. In the case that the person responsible for the coordination of an inspection was not authorized to reply to the competition authority's questions, the member in question can add rectifications to the statements within a duration determined by the authority.
In Turkey, Article 15 (1) (b) foresees that "in carrying out the duties assigned to it by this Act, the Board may perform examinations at undertakings and associations of undertakings in cases it deems necessary. To this end, it is entitled to (...) request written or oral statement on particular issues". It appears that there is an absence of precedents concerning the issue of whether incompetence could be considered as a legitimate excuse for refusing to answer the TCA's questions. Could this decision fill this lack?
It does not seem wise to infer general conclusions from this case as it has very specific circumstances. More precisely, a very peculiar factor is that the TEB's behavior has legal justifications. According to Article 34 of the TEB Act, the Association can exclusively be represented by the Central Committee. Moreover, Article 45 of the TEB Regulations clearly enounces that this Central Committee can only be represented by the president of the Association and that the general secretary has no such warrant. Therefore, both the 13th Chamber's precedent decision and the case-at-hand may not be of great interest for other undertakings than the TEB and related Pharmacists' Chambers.
Yet, some deductions can still be made. Indeed, the fact that the TCA imposes these fines, even in the presence of legal justifications, can signify that what the TCA calls "concrete information" can be asked to any person in the undertaking, regardless of any circumstances. In other words, if legal justifications are not taken into account by the TCA, it is likely to expect that the lack of the undertakings' authorization or any other type of incompetence will certainly not be paid attention to neither.
1. TCA decision dated 07.07.2015 and numbered 15-28/336-108.
2. 13th Chamber of the Council of State decision dated 15.01.2008 and numbered E. 2006/3398, K. 2008/716.
3. N. Jalabert-Doury, "Les inspections de la concurrence", 2013, 399
4. N. Jalabert-Doury (2013), 406
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