Article 6 of Law on the Protection of Competition No. 4054 prohibits the abuse by one or more companies of their dominant position in a market. It provides a non-exhaustive list of certain abusive behaviors, which have as their object or effect or likely effect the prevention, distortion or restriction of competition, when carried out by a dominant company. Tying and leveraging is included in the list of behavior that is prohibited under the abuse of dominance. In addition to the law, the Competition Authority's Guidelines on the Assessment of Exclusionary Abusive Conduct by Dominant Undertakings provides further insight into tying and leveraging behavior.
Leveraging is the practice of a dominant company to abuse its dominance in one market, by acting in an anticompetitive way in another market where it is not dominant. While each case must be analyzed separately, leveraging can generally amount to a violation when (i) the company maintains a strong position in the second market, (ii) its customers in the first market are potential customers in the second market and (iii) its competitors are present in both markets. Leveraging may turn into different types of abusive behavior when other parameters (such as price or supply) are factored in. Tying is one of these abusive behaviors. In tying cases, the company has a dominant position in one market and tries to maintain a strong position in another market, where it is not dominant.
More precisely, tying refers to the practice of conditioning the sale of one product on the buyer's acceptance to simultaneously purchase a separate product. The product that the purchaser initially intends to buy is called the "tying" product, while the additional product that the purchaser is obliged to buy in order to consummate the sale is called the "tied" product. Alternatively, tying may also refer to the practice of conditioning the sale of the tying product on the buyer's acceptance not to purchase the tied product from any other seller. In general, the tying product is a desirable product with a high level of demand, in contrast to the tied product, which is usually less desirable and more difficult to sell. The Competition Board reviews tying practices under contractual tying and technologic tying. Contractual tying occurs when a customer agrees to buy the tied product when purchasing the tying product; or in other words, when the customer agrees to refrain from purchasing the tied product from a competitor. On the other hand, technologic tying occurs when the tied and tying products are sold together as the tying products cannot be separated, i.e. the tying product can only be utilized by the purchase of the tied product.
Tying and leveraging are among the specific forms of abuse
listed in article 6. The Board assessed many tying, bundling and
leveraging allegations against dominant undertakings and has
ordered certain behavioural remedies against incumbent telephone
and internet operators in some cases, to have them avoid tying and
leveraging (TTNET-ADSL, 09-07/127-38, 18 February 2009 and
Türk Telekomünikasyon AŞ, 16-20/326-146, 9
One of the most notable cases in Turkey is TümEvİşAvea320 (09.10.2008; 08-57/912-363) where the Turkish Competition Board ("Board") assessed tying/bundling allegations in detail. The Board analyzed the TümEvİşAvea320 campaign where TTNet, the incumbent internet service provider in Turkey, and AVEA, one of three GSM operators in Turkey (both are within the same economic entity with Türk Telekom, the incumbent fixed line operator in Turkey) bundled their services. The Board conducted a dominant position analysis for TTNet and found that TTNet is in a dominant position in the market for internet service providing. By the TümEvİşAvea320 campaign, TTNet subscribers who get an Avea cell phone line during the course of the campaign gained several advantageous terms. Assessing whether TTNet abused its dominant position through tying practices, the Board first listed the cumulative conditions for a tying infringement: (i) dominant position in the relevant market; (ii) two independent products; (iii) potential/actual anticompetitive (foreclosure-exclusionary) effects and (iv) absence of objective justifications and/or efficiency gains. The Board conducted an analysis on the potential market foreclosure effect of the campaign on the basis of a number of parameters, such as demand/number of people participating in the campaign, size of discount offered in the campaign, nature of product and user preferences. Finally, the Board concluded that the campaign did not prevent competition and did not result in excluding competitors out of the market. While the campaign was not found to be a tying practice, the Board's detailed analysis on the effects of the campaign and the explanations on tying practices make this decision noteworthy for the Board's approach to tying and leveraging cases.