Turkey: The Board Denies INTES Individual Exemption For Price Variation Survey: Walking The Fine Line In Exchanging Price Information

The Turkish Competition Board ("Board") published its reasoned decision regarding the request by the Turkish Employers Association of Construction Industry ("INTES") for an individual exemption for a survey ("Survey"), which would be carried out by an independent firm to track variations in the prices of raw materials affecting the costs in the construction sector. The case handlers' report indicated that as long as (i) the results of the Survey would be made public 6 months after the data collection, (ii) the results would also be shared with the Board, and (iii) the company carrying out the Survey and INTES would enter into a non-disclosure agreement, the proposed Survey would be a suitable candidate for an individual exemption. Despite the affirmative opinion of the case handlers, the Board refused to grant an individual exemption to the Survey, as it concluded that the information exchange for the purposes of the Survey failed to satisfy the cumulative conditions for an individual exemption under Article 5 of the Law No. 4054 on the Protection of Competition ("Law No. 4054"). 1

INTES, a trade association in the construction sector, comprises over 100 members who undertake large-scale projects in Turkey and abroad. INTES applied to the Board for an individual exemption to be granted to the Survey, which would be carried out by a third­ party independent survey company, in order to determine price variations in the raw materials (such as iron, cement, ready-mixed concrete, asphalt material and lumber) that affect the costs of its members' projects. The participation of INTES members in the Survey would be voluntary, and non-member undertakings could also take part in the Survey upon request. According to the information provided by INTES, the Survey would have been a novel development for the construction sector, since it would include inquiries regarding the raw material costs and total unit costs. INTES confirmed that individual data provided by the participants would be collected each month by the independent survey company and would not be shared with any of the parties involved in the Survey. Moreover, only the aggregated results would be shared with the INTES board. The data collected by the independent survey company would then be used to calculate an index, known as the "construction costs index" which would be used to examine whether a trend of increasing costs could be discerned for each material. INTES asserted that the index, which would be made public, would not be segmented or divided on the basis of geographic regions, and if the index identified any trends regarding increasing costs for a particular geographic market, INTES would notify the Turkish Competition Authority ("Authority") and other relevant institutions of any such findings.

In its assessment, the Board defined the relevant product market as "construction services" by taking note of the fact that all the members of INTES were active in the construction industry and that the construction materials and the raw materials used in construction (regardless of whether a particular project concerns the construction of houses or other structures) are generally very similar. The Board defined the relevant geographic market as "Turkey" in light of the fact that all the players in the Turkish construction market would have benefitted from the information exchange in the course of the Survey contemplated by INTES.

In order to determine whether the Survey would hinder competition in the relevant market, the Board examined the characteristics of the relevant product market and assessed the scope of the proposed Survey. Accordingly, the Board evaluated whether the members of INTES constituted a separate product market and, if so, whether there were any barriers to entry to that market. The Board also assessed whether the information that would be collected by the survey company would be strategic, private or public, current or historic, and whether the information would be exchanged frequently.

The Board found that the proposed Survey seemed to give the impression that it would not lead to any competitive concerns, since (i) the relevant product market was competitive, (ii) the data collected would be aggregated, and (iii) the outcome of the Survey would be announced publicly. However, the Board nevertheless concluded that the Survey could hinder competition within the meaning of Article 4 of the Law No. 4054, given that the information exchange that would ensue as a result of the Survey (i) would include strategic and current information that is not publicly accessible, and (ii) would occur frequently.

As the Board determined that the Survey could restrict competition within the meaning of Article 4 of the Law No. 4054, the Board proceeded to apply the individual exemption test based on the following cumulative conditions: (a) the Survey must contribute to the improvement of the production or distribution of goods or the promotion of technical or economic progress, (b) the Survey must provide consumers a fair share of the resulting benefits, (c) the Survey should not lead to the elimination of competition with respect to a substantial part of the products in question, and (d) the Survey should not impose restrictions on the undertakings in question that are not indispensable to the achievement of the objectives specified under (a) and (b).

With regard to the first condition, INTES pointed out that, despite the obvious need, there had been no previous study that allowed construction firms to track price trends with regard to the raw materials affecting construction costs. INTES further argued that, through the Survey, construction firms would increase their efficiency by comparing their own performance to those of their competitors in the relevant market. In addition, INTES noted that, if a trend of increasing input costs was identified as a result of the Survey, then it would inform the Board and other relevant institutions of such a trend.

In response, the Board stated that it did not see the connection between informing the Board of such a trend (i.e. of increasing costs) on the one hand and achieving the proposed cost savings on the other. The Board decided that potential cost savings were more likely to result from the Board's examination and finding of a competition law infringement, if any, rather than the Survey itself, and declared that it was unclear how the monitoring of competitors would affect the costs of construction firms. The Board therefore concluded that the proposed Survey did not satisfy the first condition of an individual exemption.

For the second condition regarding consumer benefits, the Board determined that the Survey did not fulfill the requirement of providing consumers a fair share of the resulting benefits, since it would not create any efficiency gains.

In terms of the third condition, the Board decided that the Survey fell short of satisfying the requirement, since the information exchange in the course of the Survey could lead to coordination among undertakings active in the input markets. The Board also noted that information exchange among firms with regards to the raw material prices of the preceding month might create coordination effects, especially in certain sectors (such as cement and ready-mixed concrete) where seasonality and regionally are important factors in the market. For instance, the Board determined that, if the survey company collected information in the same geographic markets as the markets defined in the Board's decisions, then the risk of coordination among producers in those regions would increase, since those producers would be informed of the cost trends in their regions.

As for the fourth condition of an individual exemption, the Board concluded that the Survey would restrict competition beyond what is necessary to attain the objectives stated, even if it had the goal or effect of informing the Authority of a potential increase in input costs. The Board indicated that the Authority already carries out investigations (in the construction sector in general and in the cement and ready-mixed concrete sectors in particular) ex officio and/or upon complaints. Therefore, the Survey was deemed likely to hinder competition beyond what is necessary to achieve its stated objectives.

As a result, the Board decided that the Survey did not meet any of the conditions of an individual exemption under Article 5 of the Law No. 4054 and chose not to grant an individual exemption to it.


1 The Board's decision numbered 18-03/31-18 and dated January 18, 2018.

This article was first published in Legal Insights Quarterly by ELIG Gürkaynak Attorneys-at-Law in June 2018. A link to the full Legal Insight Quarterly may be found here.

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.

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”

Related Topics
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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