Turkey: A Safeguard To Guard Rails: The Competition Board Held That Members Of The Guard Rails And Road Safety Systems Association Have Not Violated Article 4 Of The Law No. 4054

Last Updated: 25 September 2019
Article by Gönenç Gürkaynak Esq

Most Read Contributor in Turkey, September 2019

The Authority published the Board's reasoned decision1 on the investigation initiated upon a complaint against the members of the Association of Steel Guard Rails and Road Safety Systems ("Association"), namely Alka San. İnş. ve Tic. A.Ş, Antakya Galvaniz Metal San. Tic. Ltd. Şti., - Çepaş Galvaniz Demir Çelik Madencilik İnşaat Nakliye Tic. ve San. A.Ş., Kıraç Galvaniz Telekominikasyon Metal Makine İnşaat Elektrik San. ve Tic. A.Ş., Kisan İnşaat Mühendislik San. ve Tic. A.Ş., Şa-Ra Enerji İnşaat Tic. ve San. A.Ş., Yimtaş Mühendislik İnşaat Taah. Turz. Metal San. ve Tic. A.Ş. (collectively the "Members") based on the allegations that the Members violated Article 4 of the Law No. 4054 through bid-rigging and price fixing in tenders.

The Board defined the relevant product market as "production and sale of steel guard rails'', while defining the relevant geographic market as "Turkey". As regards its substantial assessment, the Board initially evaluated the allegations on collusion in tenders, noting that the most common strategies in such collusions would be cover bidding, bid suppression, bid rotation and market allocation; as well as exchange of competitively sensitive information. According to the evidence submitted to the case file, the Board observed that the Members held frequent meetings to organize trainings and provide sector players with insights on the new standards for guard rails. The Board further established that the Members often discussed creating a mutual product which was a project led by the General Directorate of Highways ("Directorate") in the first place. In this regard, the Board did not find any evidences on exchange of strategic information. Additionally, economic analysis conducted within the scope of the case did not indicate collusive tendering by the Members. Therefore, the Board concluded that the Members did not violate Article 4 of the Law No. 4054 via bid rigging.

In the second part of its assessment, the Board focused on the activities of the Association, and found no evidence indicating that the Association had an object or effect to restrict the competition in the sector by way of facilitating collusion or enabling competitively sensitive information exchange among its Members. To that end, the Board also held that there was no concrete evidence demonstrating that the meetings of the Association had infringed competition law.

Accordingly, the Board particularly scrutinized whether the Association's role as a joint product development platform for its Members results in any competition law violations. To that end, the Board observed that the Members signed the Commitment Agreement to enable an efficient joint product development process and reduce their costs. In its analysis, the Board stated that taking into account that the Commitment Agreement was merely confined to joint research and development activities, in the absence of any solid evidences such activity in and of itself could not be deemed as having object of restricting competition. On whether there was an object to exclude any actual or potential competitors, the Board emphasized that such Commitment Agreement was yet to be implemented and it was explicitly set forth within the Commitment Agreement that any other players could partake to the Commitment Agreement provided that they comply with the contractual requirements.

Furthermore, the Board stated that the Commitment Agreement did not include any vertical restraints, exclusivity or contractual obligations that would limit the independent decision-making process of the Members significantly. Moreover, the Board indicated that the contemplated activities within the scope of the Commitment Agreement cannot be realized on an individual basis (i.e. such joint activities on this front have an objective necessity) and they would not limit the competition more than what is compulsory for achieving these goals. Accordingly, the Board indicated that the Commitment Agreement did not have the actual effect or potential effect of restricting the competition either.

That being said, the Board resolved that the horizontal cooperation agreements executed among the Members fell within the scope of Article 4 of the Law No. 4054 due to the coordination risks, given that (i) the parties had significant market power, (ii) the market solely constituted of tenders and there is high- level of cooperation due to joint participations to the tenders in the form of joint ventures/business partnerships, and (iii) the cooperation was among competitors. To that end, the Board resolved that these agreements could not benefit from the protective cloak of the block exemption provided within the scope of the Block Exemption Communique No. 2016/5 on Research and Development Agreements due to the scope of these agreements as well as the parties' market shares.

Accordingly, the Board analysed whether the agreements could qualify for an individual exemption in light of the following conditions: (a) the agreements should contribute to improving the production or distribution of goods or to promoting technical or economic progress, (b) the agreements should allow consumers a fair share of the resulting benefit, (c) the agreements should not afford the parties the possibility of eliminating competition in respect of a substantial part of the products in question, and (d) the agreements should not restrict the competition beyond what is strictly necessary to get the aforementioned positive effects (the proportionality and balancing principles).

In its assessment of these conditions, the Board considered that condition (a) of the individual exemption was met given that cooperation on R&D would facilitate emergence of new products and it would give access to know-how which was not previously available to the parties. Condition (b) was also satisfied, given that the cost reduction would be passed on to consumers and that the R&D project would positively affect traffic safety and development of lighter guard rails of a higher quality. As for condition (c), the Board noted that characteristics of the market should be taken into account and accordingly evaluated the importance of the CE marking requirement for public tenders. As of 2011, a requirement on crash tests which were carried out by foreign undertakings was introduced in relation to CE marking that was a prerequisite for guard rail tenders. The Board noted that even if the agreements could pose a constraint in tenders, this would not fall within the scope of the Law No. 4054, as the Directorate introduced the requirement in crash tests for its tenders. Accordingly, the Board held that the agreements would not enable the parties to eliminate competition in respect of a substantial part of the products. In relation to condition (d), the Board stressed that the possibility of restriction of competition was unlikely in cases where a new product or service was launched which, realistically, could not be produced only with the endeavors of a sole party to the agreement. In line with this, the Board held that condition (d) was also satisfied, given that the agreements enabled the Members to have these crash tests done, as there was no Turkish company technically capable to carry out these tests. In light of the foregoing, the Board granted these agreements an individual exemption.

Taking all of the above into consideration, the Board decided not to impose a fine in a majority decision. However, three members of the Board cast dissenting votes and argued that the Association and its Members had violated Article 4 of the Law No. 4054. Their arguments mainly included that the Association became a coordination platform by deviating from its purpose to produce mutual products given that the Members using mutual products and crash tests were in a dominant position in a very transparent oligopoly and their frequent meetings paved the way for exchange of sensitive information.

This article was first published in Legal Insights Quarterly by ELIG Gürkaynak Attorneys-at-Law in September 2019. A link to the full Legal Insight Quarterly may be found here


1. The Board's decision dated November 22, 2018 and numbered 18-44/702-344

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
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please 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