Turkey: Turkish Electricity Market: An Overview Of 2015 From Competition Law Perspective

Last Updated: 3 December 2015
Article by Bora İkiler, LL.M.

In early 2015, the Turkish Competition Authority ("Authority") published a comprehensive research report considering the wholesale and retail electricity markets ("Sector Report"). The Sector Report separately considered the privatization process and competition-related issues arising at each market level. Decisions by the Turkish Competition Board ("Board") mainly focus on the retail segment of the electricity market.

The number of competition-related complaints about the electricity market is rising and the Authority's approach is developing accordingly. This article considers the Authority's changing approach, including examination of the most recent Board decisions, as well as possible consequences of this evolving approach.

Electricity Market Structure

Privatization of electricity distribution companies is now complete in Turkey. Before privatization, a vertically-integrated market structure existed, with wholesale and retail electricity distribution carried out exclusively by a single state-owned company.

The privatization process helped to pave the way to separation of companies distributing electricity ("Distributors") companies involved in retail sale of electricity. A privatized undertaking is currently operating at the wholesale level, while the marketization and liberalization of the retail sale level is gaining momentum. Accordingly, at retail level authorized supply companies ("Localized Suppliers1") and "Independent Suppliers2" have been incorporated in each territory to conduct retail sales.

The Energy Market Regulatory Authority ("EPDK") is the electricity market's regulatory authority, authorized to maintain healthy market functioning. The EPDK sets a threshold for annual electricity consumption. Consumers who exceed the threshold ("Independent Consumers") are eligible to purchase electricity from either Localized Suppliers or Independent Suppliers. Consumers who do not exceed the EPDK's threshold are only allowed to purchase electricity from Localized Suppliers.

Therefore, Localized Suppliers hold a legal privilege due to being exclusively authorized to conduct electricity sales to the customers that have a consumption which is below the Independent Customer limit. The EPDK has consistently decreased the consumption threshold and the number of independent consumers constantly rises.

The separation between Distributors and Localized Suppliers only requires separation of their legal personalities. Therefore, Distributors and Localized Suppliers actually can still belong to the same economic unit, keeping their former ownership structures and ultimate control. Thus, Localized Suppliers are in a better position to conclude agreements with most independent consumers within their territories. These factors might give rise to competition concerns, particularly at the resale level between Localized Suppliers and Independent Suppliers.

Independent Suppliers can technically sell electricity to Independent Consumers. However, Localized Suppliers usually cooperate with Distributors due to their economic links and common economic interests.

In reality, most new Independent Consumers are unaware of their right to purchase electricity from Independent Suppliers. Accordingly, they do not tend to change from their Localized Suppliers.

Competition should exist between Independent Suppliers and Localized Suppliers in the retail sale segment of the electricity market. Therefore, actions by Localized Suppliers and the interaction between Distributors and Localized Suppliers must be closely examined.

Recent Developments in the Application of Turkish Competition Law to the Electricity Market

The Competition Authority received a number of complaints immediately after the privatization process was complete. According to the Sector Report, complaints and competition-related problems mainly arose from the behavior of Localized Suppliers and Distributors. In general, complaints can be classified under two main topics: (i) obstruction of Independent Suppliers' activities, and (ii) complication of supplier change for consumers.

Examples of complaints about the interaction between Distributors and Localized Suppliers include claims that allegedly:

  • Distributors discriminated in favor of Localized Suppliers by presenting legislatively required services as being special services which are exclusive offered to Localized Suppliers.
  • Distributors published deficient information on independent consumers despite being legislatively obliged to publish complete and correct information.
  • Localized Suppliers made the supplier transition complicated for Independent Consumers by increasing costs during the transition period.

During the first phase of the liberalization and privatization process, the Board refused to proceed with full-fledged investigations into these complaints. The Board considered EPDK to be the primary authority in the electricity sector, tasked with the role of maintaining regulatory compliance in the market. The Board noted its concerns about the complaints and discovered serious evidence of infringements, but it did not decide to proceed with any full-fledged investigations.

However, the Board's approach to these complaints is evolving. In the last year, the Competition Authority has received a number of complaints from different undertakings (or association of undertakings) in the electricity market about violations of the Act on the Protection of Competition numbered 4054, dated 7 December 1994 ("Competition Law"). Although the Board has not proceeded with full-fledged investigations, the Board made serious findings indicating violations and sent warning letters to the related undertakings. However, the number of Board members who voted in favor of proceeding with full-fledged investigations in this context is increasing. Similarly, the approach and report recommendations by case handlers who examine complaints before the Board is occasionally conflicting with the Board's ultimate decision. Case handlers are recommending the Board should proceed with full-fledged investigations. The Sector Report and education given to the case handlers have likely been influential in this.

The Board's consideration of applications falling into the two main categories of complaint is described below.

1.  Interaction between Distributors and Localized Suppliers

  • Gediz-Aydem decision (14-47/860-390, 3 December 2014): The Board held that Distributors had published deficient information about Independent Consumers, despite being legislatively obliged to publish correct and complete information. In this way, Distributors prevented Independent Suppliers from accessing information about Independent Consumers, thus restricting competition between Independent Suppliers and Localized Suppliers. The Board discovered that Distributor employees were assigned to work for Localized Suppliers. The Board held this to be a sign of coordination between distribution and retail sale activities, which might inappropriately restrict competition in the retail market. The Board stated that in a competitive market, Distributors and Localized Suppliers should have separate financial/cost policies.
  • Boğaziçi-CLK decision (14-42/762-338, 22 October 2014): A Distributor introduced its regular services to consumers as if these services were exclusive offered to consumers which entered a contract with a particular supplier. The Board deemed the introductions misleading, since legislation requires Distributors to provide these services to all Suppliers. 123

Complicating the Transition Period for Consumers

The Board considered complaints involving a range of methods used to unnecessarily complicate the transition period for Consumers.

  • Automatic transfer of consumers: Localized Suppliers automatically transferred agreements with consumers who exceed the electricity consumption threshold (becoming Independent Consumers) to their portfolio of Independent Consumers, without obtaining consumer approval. In some cases, consumers were transferred collectively to the portfolio of Independent Consumers. The Board expressed its concerns about collective transfers in the İstanbul Anadolu Yakası decision (14-42/761-337, 22 October 2014).
  • Refusal to transfer consumers: Distributors and Localized Suppliers would simply refuse to make transfers in order to prevent consumers moving to other Suppliers. For instance, in the Boğaziçi-CLK decision, the Board discovered high refusal rates of 63.2% and 52.4% in the related territories. The Board stated that these refusal ratios are not acceptable for the ordinary course of business within a competitive market. It emphasized that the rates cannot be based on justifiable reasons.
  • Consumer agreements with long term undertakings: Localized Suppliers executed consumer agreements involving long-term undertakings. For instance in the Gediz-Aydem decision, the Board discovered the Localized Suppliers had tied consumers with long-term undertakings, before these consumers became Independent Customers. The Board noted that the agreements prevented the Consumers from transferring to Independent Suppliers when they became eligible, which might lead to foreclosure of the market for Independent Suppliers.

Consequences of these Applications and the Board's Approach

The Board considered the complaints noted against the Competition Law's abuse of dominance provisions (Article 6). These state that it is illegal and prohibited for one or more undertakings to abuse a dominant market position for goods or services within the whole or a part of the country, either on their own, through agreements with others, or through concerted practices.

Since Distributors and Localized Suppliers both hold dominant positions in their territory, abuse of their positions is deemed to be a violation of competition laws. The Board identified significant indications of competition law violations, as in the examples above. However, the Board chose not to proceed with full-fledged investigations into these allegations. Rather, it preferred to warn the undertakings involved and inform the EPDK of its findings (as per Article 9 of the Competition Law).

The main reason for not proceeding with full-fledged investigations is that the electricity market is a regulated sector. The Board stated that the EPDK is the legislatively authorized institution, empowered to oversee and regulate the sector. The Board gave weight to the fact that the EPDK was currently considering the examinations.

However, the Board's decisions were not made unanimously. For instance, in the Gediz-Aydem decision, one Board member voted against the decision to refuse the complaints, noting that:

  • If an abuse of dominance is found, the Board is authorized and obliged to proceed with full-fledged investigations into complaints, even if they involve a regulated market.
  • A Council of State decision (2008/13184, 13 February 2012) clearly states the Board is authorized to decide on complaints arising from actions by undertakings which are operating in a regulated sector.
  • The Board can proceed with a full-fledged investigation if it is empowered in the circumstances to warn the undertakings examined, as per Article 9 of the Competition Law.

In the Boğaziçi-CLK decision, the Board decided not to proceed with full-fledged investigation due to the same regulated market reasoning noted above. Another dissenting Board member cited the reasons outlined above, further noting:

  • Preliminary investigations had occurred previously in similar circumstances, but the undertakings had not "taken lessons" from the preliminary investigations.
  • The electricity market's liberalization process is very new and the Board must respond to violations in due time.
  • Precedents by the Council of State indicate that the Board:
  • Is authorized to consider regulated sectors.
  • Can still proceed with full-fledged investigations even if:
  • The regulatory authority approves an undertaking's actions which are also subject to competition law rules.
  • Sector-specific regulations permit some compromise procedures for the violation.

Accordingly, the number of dissenting votes is increasing in Board decisions to not proceed with full-fledged investigations. In particular, case handlers employed by the Board tend to recommend proceeding with full-fledged investigations against complaints. It seems the Board's approach is evolving. Therefore, companies operating in the electricity market should act carefully since it will not be a surprise if the Board decides to proceed with a full-fledged investigation in the near future. 


1  Localized suppliers are retailers which are required by law to supply electricity to the customers that have a consumption which is below the Independent Customer limit. They also compete with the Independent Suppliers in their retail activities to supply the customers that have a consumption which is above the Independent Customer limit.

2  Independent Suppliers operate at the retail level and serve only the customers that have a consumption which is above the Independent Customer limit.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Bora İkiler, LL.M.
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions