Turkish competition law regime recently adopted a new commitment mechanism with the Law No. 7246 Amending the Law on the Protection of Competition ("Law No. 7246") that entered into force on June 24, 2020.1 As per Article 43 of the Law No. 4054, relevant undertakings or associations of undertakings may now offer commitments to eliminate the competition law concerns of the Authority, except for cases of explicit infringements and hard-core restrictions.
That said, the secondary legislation setting out the procedural details of the newly introduced commitment mechanism has yet to be adopted by the Authority. On November 27, 2020, the Authority published the Draft Communiqué on Commitments Offered during Preliminary Investigations and Investigations on Restrictive Agreements, Concerted Practices, Decisions and Abuse of Dominance ("Draft Communiqué") for public consultation,2 which sets out the procedural details of the commitment mechanism. Therefore, how the new commitment mechanism would be implemented by the Authority in practice remains to be seen.
This article aims to provide insight as to the recent cases of the Board, where we see the first examples of the commitment mechanism being employed based on the amendment in Law no. 4054, and to delve into the procedural tracks that were followed by the Authority and the relevant undertakings in these trailblazing cases, before the relevant Communiqué is yet officially published.
I. First Commitment Cases in Turkish Competition Board's Decisional Practice
1. Arslan Nakliyat Decision
The first publicly available and reasoned decision of the Authority that delved into the commitment mechanism was Arslan Nakliyat.3 The Board has initiated a full-fledged investigation against the Association of Aegean Container Transporters (the "Association"), which Arslan Nakliyat is a member of, in order to determine whether the members of the Association had violated Article 4 of Law No. 4054 by fixing prices and allocating customers within the scope of container transportation activities in the Izmir city center and neighboring districts.
While Arslan Nakliyat does not provide a substantive analysis or a detailed insight as regards the merits of the commitment mechanism, it highlights a crucial procedural aspect of the commitment process. In that context, the Board stated that the set of commitments offered by Arslan Nakliyat cannot be accepted due to the fact that the commitment package had been offered to the Board after the investigation period was over. Accordingly, the Board explained that Article 43 of the Law No. 4054 explicitly allows for the Board to assess and accept commitments offered within the "preliminary investigation or investigation period" and as Arslan Nakliyat has submitted its commitment package to the Authority after it has submitted its third written defense (i.e., after the investigation period was over), its commitment package was inadmissible by the Board.
In the absence of a concrete guidance as to the procedural rules to be abided by in commitment applications, guidance provided by Arslan Nakliyat is an invaluable case which highlights the procedural deadline (by the end of the investigation period i.e., before the third written defense is submitted to the Authority).
2. Havas Decision
In Havas 4 the Board evaluated the commitments offered by Havaalani Yer Hizmetleri A.S. ("Havas") within the scope of the investigation conducted against Havas, MNG Havayollari ve Tasimacilik A.S. ("MNG"), S Sistem Lojistik Hizmetler A.S. ("S Sistem") and Türk Hava Yollari A.O. ("Turkish Airlines") operating in the field of bonded temporary storage or warehouse services at airports. According to the Board's announcement dated November 6, 2020,5 Havas's commitment package is the first that was accepted by the Board.
On July 24, 2020, the Board has launched a full-fledged investigation against the relevant undertakings in order to determine whether Article 6 of the Law No. 4054 (prohibiting the abuse of dominance) had been violated or not. On October 7, 2020, Havas submitted its application for commencing the process for commitment. Following Havas's application for commitment mechanism, a meeting was scheduled for October 13, 2020 at the premises of the Authority within the scope of the commitment discussions. At this meeting, which was held with the attendance of Havas representatives and the case handlers, the case handlers conveyed the competition concerns pertaining to the subject matter of the case. Following the meeting, Havas submitted its commitment package to the Authority on October 19, 2020. The Board granted its decision on November 5, 2020.
In terms of timing, the Authority has performed in a tremendous pace. The case handlers held a discussion meeting within six (6) days following Havas's application for commitment was submitted to the Authority, and later, reviewed the commitments offered by Havas and prepared a report (i.e., the information note) regarding their assessments in eight (8) days. Considering that the Board rendered its decision within approximately one month after the commitment application was submitted, and the case handlers' effective use of time, Havas may be considered as a testament to the time and cost efficiency that can be achieved by the commitment mechanism for the Authority and other stakeholders.
In terms of the merits of the case, Havas does not delve into the competition law concerns at stake within the scope of the investigation. However, the Board briefly explains that the transfer fees imposed by bonded temporary storage or warehouse service providers to customers for switching to other service providers (i.e., warehouse switching fees) did restrict the customers' capabilities to switch (i.e., procure from) alternative suppliers. In order to eliminate the competition law concerns stemming from warehouse switching fees, Havas committed to terminate the fee practice in question and also covenanted not to implement any other fees to the same effect.
As the commitment proposed by Havas was deemed suitable and sufficient to eliminate the competition law concerns, the Board decided to accept this commitment. In this respect, the Board concluded that the ongoing investigation has been ultimately terminated for Havas. It is worth noting that the investigation is still on-going for Turkish Airlines, MNG and S Sistem.
3. TSB/OSEM Decision
The Board has launched a full-fledged investigation6 against Türkiye Sigorta, Reasürans ve Emeklilik Sirketleri Birligi (Turkish Insurance, Reinsurance and Pension Companies Association, ("TSB") and OSEM Sertifikasyon A.S. ("OSEM") in order to assess the allegations on whether (i) OSEM restricted competition through its standard setting and certification services for damage repair centers and equivalent parts suppliers, as well as its conduct regarding the purchase of bulk spare parts and (ii) OSEM's damage management system namely, Osem Portal, would make the competitively sensitive information transparent.
Although the Board did not made the content of the commitments publicly available, the Board indicated that it accepted the commitments offered by TSB and OSEM with respect to upholding principles of equal treatment and transparency, and decided that the ongoing investigation against these two undertakings shall be terminated. It is noteworthy that similarly with Havas decision, the Board has rendered its decision in a short period of time. The Board has evaluated and decided on the commitments in fifteen (15) days after the final submission of the commitments.
Until the Draft Communiqué is finalized through public consultation process and enters into force, the Board's Arslan Nakliyat, Havas and TSB/OSEM decisions may function as concrete examples that may shed light on the application of the commitment mechanism. These cases are now the milestones forming the initial examples of the Board's decisional practice on that front.
This article was first published in Legal Insights Quarterly by ELIG Gürkaynak Attorneys-at-Law in March 2021. A link to the full Legal Insight Quarterly may be found here
1 The Law No. 7246 entered into force by being published in the Official Gazette dated 24.06.2020 and numbered 31165.
2 See https://www.rekabet.gov.tr/tr/Guncel/taahhut-tebligi-taslagi-kamuoyu-gorusune-d715c559af30eb11812300505694b4c6 (Last accessed on January 25, 2021)
3 The Board's Arslan Nakliyat decision dated July 28, 2020 and numbered 20-36/485-212.
4 The Board's Havas decision dated November 5, 2020 and numbered 20-48/655-287.
5 See https://www.rekabet.gov.tr/tr/Guncel/rekabet-hukukunda-yeni-bir-donem-taahhut-5ca6e0b74220eb11812200505694b4c6 (Last accessed on January 25, 2021)
6 Decision of the Board dated 29.08.2019 and numbered 19-30/453-M.
7 See https://www.rekabet.gov.tr/tr/Guncel/turkiye-sigorta-reasurans-ve-emeklilik-s-30868ee30d54eb11812700505694b4c6 (Last accessed on January 25, 2021)
8 See https://www.rekabet.gov.tr/tr/Guncel/taahhut-muessesesi-uygulanmaya-devam-edi-8fee2335a854eb11812700505694b4c6 (Last accessed on January 25, 2021)
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