Turkey: Exclusivity Practices Examined in the Two- Sided Market of Cinema Screen Advertising: The Board Rejected the Exclusivity Allegations against Mars due to a Lack of Evidence

Last Updated: 15 October 2018
Article by Gönenç Gürkaynak Esq

Most Read Contributor in Turkey, October 2018

The Board published its reasoned decision[1] on the preliminary investigation launched against Mars Sinema Turizm ve Sportif Tesisler İşletmeciliği A.Ş. ("Mars"), a company active in the areas of movie screening services, movie distribution services and cinema screen advertising services, in order to determine whether Mars had abused its market position by offering special prices and implementing discounts to certain media agencies and advertisers, subject to the condition that those agencies and advertisers spend their entire cinema advertising budgets in Mars's own movie theaters.

In its evaluation of the relevant product market, the Board first provided general background information on the dynamics of the media promotion and marketing services markets in Turkey. The Board observed that the most significant characteristic of media platforms is that these platforms operate as two-sided markets. Accordingly, the Board noted that undertakings operating in the fields of print and visual media compete not only at the audience level (i.e., pursuing high circulation numbers or ratings), but also compete on the advertisers' side of the market. The Board then evaluated whether different media channels can be considered as substitutes for each other. In this regard, the Board asserted that, similar to other advertising channels, the demand structure in terms of cinemas is affected by a wide variety of factors. Accordingly, the Board held that advertisers or advertising agencies planning to use cinema screen advertising services take numerous parameters into consideration, such as the audience profile for a specific movie (i.e., age, gender, income, etc.) or the location of a particular cinema. In light of these characteristics, the Board determined that this advertising channel did constitute an alternative to traditional media channels (such as television, outdoor advertising and newspaper) for advertisers aiming to reach their target audiences.

The Board then assessed the share of the cinema screen advertising channels in the overall market for general advertising channels. In this regard, the Board focused on the relative amounts of advertising expenditures for various advertising channels, and noted that cinema screen advertising's share in the advertising market was quite low (approx. 1% of total expenditures), and observed that television, print publications and digital channels were the principal alternatives preferred by advertisers. In this regard, the Board referred to its previous decisions involving the advertising sector and declared that while advertisers may choose to employ diverse advertising channels to achieve specific purposes, different advertising channels may also function as complementary to each other in certain instances. Consequently, even though the Board acknowledged it would be difficult to make distinctions between these various advertising channels in terms of defining the relevant product market, it ultimately opted to define the relevant product market in the present case as "cinema screen advertising." Furthermore, the Board defined the relevant geographic market as "Turkey," considering the fact that all the advertisers, advertising agencies and media planning and buying agencies in this market operated on a nationwide scale.

The Board proceeded to evaluate the complainant's allegations under the category of "exclusivity practices." The Board first noted that such practices may be assessed within the scope of provisions concerning anticompetitive agreements (Article 4) and unilateral conducts (Article 6) under the Law No. 4054. The Board then referred to the Commission's established approach toward exclusivity agreements and concluded that the Commission also evaluates such practices both in the context of anticompetitive agreements and unilateral conducts. Furthermore, the Board observed that the Commission provides similar analyses in its assessments of exclusivity practices under these categories, even though it generally tends to evaluate the agreements concluded by dominant undertakings within the scope of Article 102 of the TFEU. As for the Board's own precedents involving exclusivity practices, it referred to its earlier decisions in which exclusivity practices had been evaluated either under Article 4 or Article 6 of the Law No. 4054. Moreover, the Board stated that there were also several decisions in which it had assessed exclusivity practices within the scope of both Article 4 and Article 6. In this regard, the Board declared that, so long as it does not lead to the investigated undertaking being penalized twice for the same conduct, initiating an investigation regarding the same practice within the scope of both Article 4 and Article 6 would not violate the "ne bis in idem" principle (i.e., the prohibition against double jeopardy). Consequently, the Board concluded that exclusivity practices may be evaluated within the scope of both Article 4 and Article 6, and the main factors that must be appraised on this front are (i) the market power of the relevant undertaking, and (ii) the possible restrictive effects that may be caused by the exclusivity agreements under scrutiny, due to the market power of the undertaking.

Following this line of reasoning, the Board first assessed Mars's market power in the relevant product market. At the outset, the Board underlined the duopolistic structure of the market for cinema screen advertising agency services, in which only Mars and Istanbul Medya are active in Turkey. Accordingly, the Board evaluated Mars and Istanbul Medya's market shares on the basis of their revenue and the duration of their advertisements. As a result of its evaluations on this front, the Board concluded that Mars's market share had been consistently higher than Istanbul Medya's market share in the previous three years. Moreover, given that Mars is a vertically-integrated undertaking in the cinema industry, where it operates movie theaters under the Cinemaximum brand, the Board made an assessment with respect to the position/market power of Mars's movie theaters in the relevant sector as well. In this regard, the Board found that Mars's movie theaters comprised 38% of the total number of movie theaters in Turkey.

Furthermore, the Board also examined whether advertisers and advertising agencies were able to exert any pressure or have any effect on Mars's business practices. The Board relied on statements that had been obtained from various undertakings in the sector, in which the relevant undertakings declared that cinema screen advertising was not a top priority for them among various advertising channels due to (i) its limited share in general advertising expenditures, and (ii) periodic fluctuations in demand in this particular advertising channel. Considering these fundamental characteristics of cinema screen advertising, the Board concluded that Mars was not in a position to fully exercise its market power on advertisers and advertising agencies. However, by considering Mars's firmly high market share and the leading position of Cinemaximum movie theaters in the movie screening sector, the Board nevertheless concluded that Mars possessed significant market power in the relevant market.

In its evaluation on whether Mars had engaged in exclusivity practices, the Board referred specifically to a piece of evidence that had been obtained during the on-site inspection of Mars's premises, which clearly stated that "exclusivity agreements will not be made in writing." That said, the Board also noted that no other finding had been produced (beyond this single piece of evidence) which would indicate that Mars had engaged in exclusivity practices in the relevant market. Moreover, the Board also assessed the agreements that had been concluded between Mars and advertisers and advertising agencies. In this regard, the Board concluded that the relevant agreements did not contain any exclusivity provisions. Consequently, the Board ultimately decided not to initiate a full-fledged investigation against Mars due to a lack of evidence supporting the exclusivity allegations.


[1] The Board's decision numbered 18-03/35-22 and dated January 18,2018.


This article was first published in Legal Insights Quarterly by ELIG Gürkaynak Attorneys-at-Law in September 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.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
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
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
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.

Disclaimer

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.

General

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