Turkey: MFC Practices and Online Passive Sale Restrictions are on the Turkish Competition Authority's Radar

Last Updated: 17 October 2017
Article by Şahin Ardiyok and Dilara Yeşilyaprak

The Turkish Competition Authority (the TCA) recently announced amendment of the Guidelines on Vertical Agreements (Guidelines) and opened the draft Guidelines to public discussion. In recent days, various stakeholders had the chance to submit their thoughts to the TCA. Now we are waiting for the final account of the TCA on the proposed amendments.

There were two important issues that the TCA touched upon in the draft Guidelines; assessment of most favored customer clauses (MFC) and evaluation of online passive sale restrictions. Below we provide a brief summary on the aforementioned matters together with other topics subject to discussion.

What is MFC and why is it important?

MFC refers to practices which restrict a contracted seller from offering more favorable prices or conditions through its own means or to other customers. MFC practices are often classified in three groups as follows:

  • Wide MFC practices; referring to restrictions placed to the sellers in relation to offers provided to competing entities
  • Narrow MFC practices; referring to restrictions placed to the sellers itself for offers provided through their own sales channels
  • MFC+ practices; requiring seller to provide best offers to the contracted entity

MFC practices are not evaluated as per se infringements. However, they have recently attracted the attention of various competition authorities across the globe, especially with the rapid rise of e-commerce all over the world.

In Turkey, adoption of such practices by various e-commerce platforms have been under close scrutiny - explaining the reasoning behind the TCA's efforts towards providing further explanation on their assessment from the competition law perspective.

What does the TCA propose on MFC practices?

The draft Guidelines concentrate on two main aspects of MFC practices; potential price rigidity problems associated with such practices and general approach to MFC practices from the point of view of vertical agreements.

With regard to the concerns on price rigidity, the TCA proposes to add an explanation stipulating that MFC practices having the effect to reduce the motivation of entities that are not part of such practices to seek better prices and conditions may increase the likelihood of direct or indirect resale price maintenance.

The TCA adopts the European Commission's approach which lists obligation to apply MFC as measures which may reduce the buyer's incentive to lower the resale price and thus increase likelihood of direct or indirect price fixing.

Moving on, different from the EU, the TCA adds further explanation on the general approach adopted towards such practices. In this regard, the TCA provides a brief explanation on how such practices can be pro-competitive as well as anti-competitive, noting the need to take into consideration the market position and power of the entities benefiting from such practices as well as their competitors, the reasoning behind the adoption of such practices and the characteristics of the practice against the dynamics of the market. Overall, the TCA suggests that the MFC practices may be regarded as anticompetitive if the following conditions are present:

  • The said practices are retrospective practices which ensure the entity imposing the MFC practice to benefit at all times or increase the cost of the contracted seller to provide further discounts or favorable conditions to entities competing with the contracted entity.
  • The contracted parties of an MFC practice have a considerably higher market share and power when compared to other players in the market.
  • The concentration level in the relevant market subject to MFC practices is rather high.

In sum, the draft Guidelines seeks to take a step forward in the international arena towards providing a certain extent of information on how MFC practices should be assessed from the competition law perspective. It must be noted here that the evaluation of the TCA may be setting a precedent for other authorities who seek to tackle the MFC-related competition problems.

What about online passive sale restrictions?

Passive sales constitute "fulfilling demands of customers from the region or customer group of another buyer and which are not results of active efforts by the buyer" and restriction of passive sales are restricted under Turkish competition rules. The current Guidelines fail to provide in depth explanation on how the passive sales matter should be dealt with for online sales. It merely provides that online sales constitute passive sales.

Noticing the ever-increasing significance of "living online," the TCA proposes to align its approach with the European Commission's approach. However, whilst aligning its approach, it leaves the current "hot topic" across Europe out of the scope of its proposal.

In-scope vs out-of-scope

As an extension of the general provision concerning online sales as passive sales, the draft Guidelines suggest that the following conditions shall be listed as hardcore restrictions of passive selling:

  • Agreeing that the (exclusive) distributor shall prevent customers located in another (exclusive) territory to view its website or shall put on its website automatic routing of customers to the manufacturer's or other (exclusive) distributors' websites
  • Agreeing that the (exclusive) distributor shall terminate consumers' transactions over the internet once their credit card data reveal an address that is not within the distributor's (exclusive) territory
  • Agreeing that the distributor shall limit its proportion of overall sales made over the internet
  • Agreeing that the distributor shall pay a higher price for products intended to be resold by the distributor online than for products intended to be resold off-line

On the flip side, the draft Guidelines stipulate that criteria may be imposed to the sellers by suppliers who make online sales in order to preserve the brand image and standard of quality of the distribution network of the supplier. In this regard, it suggests that certain extra services may be required to be provided through online platform or that online re-sellers may be expected to also make sales through brick and mortar shops or showrooms. Moreover, the draft Guidelines note that suppliers may foresee sales of goods from certain third-party platforms that meet certain standards or conditions. On this note, the draft Guidelines provide that any criteria that has the effect of deterring online sales will be regarded as hardcore restriction of passive selling.

What is left out of the scope of the proposed amendments concern the below provided restriction example set in the European Commission's Guidelines for standards/conditions set in relation to third party platforms.

"For instance, where the distributor's website is hosted by a third-party platform, the supplier may require that customers do not visit the distributor's website through a site carrying the name or logo of the third-party platform."

The relevant provision has sparked a controversial debate as per the EU Court of Justice's Attorney General's opinion on the Coty Case before the EU Court of Justice and is subject to debate before many other institutions.

The TCA stays clear from the relevant provision likely because it is a controversial provision interpreted and examined by different competition authorities and courts across Europe as well as the US in varying ways; while one institution regards it as a pro-competitive provision holding interests of especially luxury brands, another notes that the provision may hinder inter-brand competition especially for small-medium sized enterprises.

What are other proposed amendments?

The draft Guidelines suggests two other amendments – one concerns selective distribution system and the second concerns agency relationships.

With regard to selective distribution system, the existing provisions are restructured in relation to online sales. In this regard, the draft Guidelines stipulate that agreements including restriction of online sales to end-users shall not benefit from block exemption. Moreover, in relation to the currently available restriction placed on a system-member buyer towards changing or opening a new sales point (stemming from the significance of having brick and mortar shops or showrooms for success of a selective distribution system), the TCA clarifies assessment of online sales. In this regard, the TCA suggests that a new website created by the system-member buyer for online sales does not constitute opening a new sales point.

In relation to the agency relationships, the TCA suggests that a contradiction exists for interpretation of the current provision on non-compete clauses within the scope of agency agreements and the remaining vertical agreements. Accordingly, the draft Guidelines seeks to reconcile the contradiction by proposing to add that non-compete clauses available in agency agreements must also be considered within the scope of Article 4 of the Competition Act as they concern intra-brand competition.

Overall, even though the TCA's effort towards clarifying the legislation has been praised by the majority of the stakeholders, it has created certain tensions between online sales platforms and wholesalers/ retailers. If you are interested in the final outcome, stay tuned!

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.

Şahin Ardiyok
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