Turkey: Oops! I Have Dominated The Market

Last Updated: 23 November 2015
Article by Çukur & Yılmaz Law Firm

THE BORDERS WITHIN THE FRAMEWORK OF COMPETITION LAW OF CONDUCTS OF THE COMPANIES THAT DOMINATE THEIR FIELD OF OPERATION

IS IT A COMPETITION BREACH THAT YOUR COMPANY HAS A BIG MARKET POWER?

1. In Law no. 4054 The Act on the Protection of Competition, Article 3, "Dominant Position" is defined as, " the power of determining the economic parameters, such as quantity of supply, production and distribution of the one or more undertakings in a particular market by acting separately from its competitors and customers".

2. On the other hand, every undertaking which is in stronger position compared to its competitors in the market, is not considered as a dominant undertaking. The definition of dominant position necessitates the consideration one by one for each situation and undertaking. Yet determining the dominant position necessitates doing analysis according to quality of the good and service markets in which relevant undertaking be active, the geographic market which is operated in, the barriers to entry and exit to the relevant market and the situations of the other actors in the market.

3. Being in a dominant position may be discussed for only one undertaking but also it may come up with creating a dominant position of two companies acting together. However, in the code this situation is defined as "Collective Dominance" and the companies are prohibited from abusing of their collective dominance.

4. Naturally there is not any obstacle for the undertakings, to make a difference compared to its competitors and increase their profitableness and market share and becoming dominant by their effective marketing strategies and innovations related to the products and through producing their good and services cheaper and with higher quality by evaluating dynamics of markets with their own marketing strategies.

5. The undertakings which are in a dominant position within the scope of competition law regulations, are prohibited from abusing their dominant position on the purpose of providing a competitive advantage through the specific conducts and implementations and doing actions which causes welfare-reducing actions for consumer.

WHAT ARE THE MAIN ASPECTS OF ABUSE OF DOMINANT POSITION WHICH ARE COUNTED IN TURKISH COMPETITION LEGISLATIONS?

1. In Article 6 of the Act on the Protection of the Competition, "abuse of dominant position" is defined and in which aspects considered as an abuse is demonstrated. These aspects are not numerus clausus. This counting is illustrative. In other words, beside these, any other conducts of abuse of dominant position may subjects to the competition sanctions.

2. Blocking the entry of the market through making competitor's actions difficult: Blocking entrance of the any other company to the commercial area of activity directly or indirectly or leaving the competitors in a difficult situation and for this purpose pricing below the cost or doing predatory pricing, extending the deferrals, avoiding to give goods and services or any other elements to the particular companies, refusing to make a contract, etc. are the abuses of dominant position.

3. Discriminating among the buyers in equal positions: Applying different price to buyers in equal positions without any valid ground and providing different amount of service to same price in order to putting their competitors in disadvantageous position by the dominant company is an abuse of dominant position.

4. Tied sale: The actions which conditions the sales of goods or services to the purchase of another goods and foreseeing the resale of the goods and the services are defined as selling tied products. Selling two products that have no objective connection between themselves with the condition for them to be purchased together and by this way pursuing to break the competition power of the opponent company by the dominant company is an abuse of dominant position.

5. Abuse of dominant position in a different market: The actions of the undertaking which is in a dominant position in a particular market, that aimed to disrupt the conditions of competition in another good and service market through utilizing the financial and technological advantages provided by its dominance is an abuse of dominant position.

6. Restriction of the producing, marketing or technical development to the detriment of the consumer: For a dominant company or a monopoly , providing goods, services or elements with very high price and not doing essential progresses and reformations are the abuses of dominant position.

7. Refusal to supply: Refusing to give goods to an existing customer or in case of the good or service is essential facility for the buyer, is an abuse of dominant position.

8. Predatory Pricing: This aspect comes up with these two distinctions; predatory price and excessive price. With predatory price, the undertakings take their competitors out of the market or block the entrance of the new competitors to the market. excessive price means pricing far above the number can occur in a real competitive environment. In other words, it is pricing out of the market. These two aspects are abuses of dominant position and cause breach of competition.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Çukur & Yılmaz Law Firm
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