In March 2018, the Turkish Competition Authority ("TCA") published its preliminary inquiry decision about Duru, which is one of the important food companies in Turkey and produces bulgur – a sort of grain. In its inquiry, the TCA examined resale price maintenance ("RPM") allegations of Duru in relation to the determination of the shelf prices of retail chains and putting limitations on their discount rates. Under Turkish competition law regime, certain restrictions, including RPM, are regarded to be hard-core restrictions and conducts containing such restrictions will constitute a competition law violation irrespective of market shares of parties in consideration in accordance with EU legislation.
However, in Duru case, although the TCA noticed some correspondences indicating the intervention of Duru to shelf prices of some retailers, the TCA proceeded to engage in an "effects analysis". The absence of any evidence regarding any enforcement or monitoring mechanisms for the implementation of the recommended prices was said to be one of the reasons that led the TCA to implement effect-based analysis. At the end of its preliminary inquiry, the TCA concluded that the relevant market that Duru operates does not have high levels of concentration. Moreover, according to the TCA, a significant number of undertakings were active in the market as suppliers and/or resellers. Furthermore, despite the higher price of Duru, consumers still demanded Duru products due to their high quality. In conclusion, the TCA decided not to initiate a full-fledged investigation against Duru.
Consecutively, a consumer, who purchased the products of Duru and hence claimed to suffer from higher market prices of Duru, initiated an action for annulment of the decision of the TCA. The claimant alleged that multiple evidences denoted that Duru violate the Competition Law and Duru determined the shelf prices of retail chains through RPM. The Administrative Court of Ankara examined the allegations of the claimant (consumer) and rejected the case on March 4th, 2019. The assessment on the interest of the claimant to initiate an action for nullity and the dissenting opinion are two noticeable points in the decision of the Administrative Court.
According to Article 2 of the Code of Administrative Procedure of Turkey, the action for nullity may be initiated by those whose interests are violated because the unlawfulness of one of the aspects of the administrative which are listed as the authorization, the reason, the form, the subject and the intent. Moreover, according to Article 14/3, the first examination mainly examines on the "capacity" of the claimant. The absence of this "capacity" has seen as a cause of dismissal of action.
For an action for annulment, besides the general (objective) capacity, it is also necessary to have the subjective capacity, which is changed according to the types of disputes. The interest of the claimant requires being personal, legitimate and actual to initiate an action for nullity. The question of interest is specific to each fact and case.
In the Duru case, the Administrative Court asked the claimant to explain his interest to initiate an action for nullity and to provide all the information and document related to this question. The claimant (a final customer of Duru) responded that his interest has been violated because of the increase of sale price in Turkey including Ankara where he lived. According to the Administrative Court, although the subject matter of the case is a public interest, it is necessary to have a legitimate, up-to-date, concrete interest between the subject of the case and the claimant. Otherwise, the Administrative Court claimed that the acceptance of the situation brings about the possibility that all citizens are subject to any matter considered to be in the public interest, which is against the aim of the legal regulation regarding the capacity to initiate an action.
Thereby, the Administrative Court of Ankara concluded that being a citizen does not provide the establishment of legitimate, personal and actual interest between the cause of the action and the claimant. The Court concluded that the claimant has not the capacity to initiate an action.
On the other hand, the decision of the Administrative Court was not taken unanimously. The dissenting opinion is quite noticeable. In the dissenting opinion one of the judges of the case argued that in established case law of the Turkish Council of State, a wider concept was envisaged, such as a violation of interests rather than a violation of rights as a condition of filing an action for nullity.
The dissenting opinion considered that the violation of RPM directly affects the consumer, as the price of the product purchased by the consumer was increased to a higher level than it should. In addition, in case of preliminary inquiry of the TCA, if the relevant geographic market of Duru is considered as "Turkey", the interest of the claimant will be affected and he will have the capacity to initiate an action for nullity.
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.