We are happy to present the sixth of BASEAK CORE Papers article series!
In this part of the series, our team leader Sahin Ardiyok discusses most favoured nation clauses applied by online platforms in light of several decisions of the Turkish Competition Authority and the Vertical Guideline.
Please find below the brief summary and the link to our article.
Industrial developments affect business models and we increasingly witness differentiation of business models due to new developments. Such developments also affect the legal landscape, and rules and laws change in order to keep up with the ever-evolving industrial landscape. Competition law stands out as one of the most important areas that must catch up with changes in business. Online world and e-commerce have become an integral part of our lives and in recent years, new sales channels such as online platforms and online marketplaces have emerged. Against this background, governing restrictions imposed on such new sale channels is vital. Indeed, competition authorities across the world, especially in the European Union and Turkey, are currently carrying out various examinations and adopting new regulations in relation to restriction of online sales. When the recent examinations and legislative amendments are evaluated, most favoured customer clauses (in which a supplier ensures its customer that it shall not offer a more advantageous offer to another customer) which are increasingly adopted by online platforms, stand out as practices that are closely monitored and scrutinized by various competition authorities.
Turkish Competition Authority stands out as one of the first competition authorities to examine the effects of most favoured nation clauses on the restriction of competition and abuse of dominance in detail, and impose an administrative fine in relation to such clauses in its Yemek Sepeti and Booking.com decisions. Moreover, the Turkish Competition Authority, benefiting from its evaluations in those decisions, has recently revised its Guideline on Vertical Agreements based on the opinions of many stakeholders and provided explanations in its Vertical Guidelines that shed light on evaluation of most favoured customer clauses based on vertical relationships.
Current developments in Turkey suggest that adoption of most favoured customer clauses may be evaluated as risky practices if undertakings benefiting from such clauses have a market share exceeding 40% or have significant market power since such clauses may result in foreclosure of the market - especially if they work in detriment of the competitor. Additionally, most favoured customer clauses may also be evaluated as competition restricting conducts if such clauses trigger price rigidity or resale price maintenance in the relevant markets.
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