2020 and 2021 were rocky years not only for the entirety of the planet in general due to the raging pandemic, but also for undertakings active in Turkish retail. The initial months of 2020 saw the opening of a preliminary inquiry and a subsequent, fully-fledged investigation by the Turkish Competition Authority ("TCA") against 29 undertakings, operating as suppliers or retailers in the fast-moving consumer goods ("FMCG") sector. After three phases of written defence submissions and an oral hearing, the TCA rendered its decision on 28 October 2021, and has recently transmitted the reasoned decision to parties to the investigation.

As legal counsel of three suppliers and a retailer, we participated in oral hearings and conducted written defences before the TCA, offering us a sneak-peek into the latest decision-making practice regarding areas of particular interest in competition law, including hub-and-spoke cartels and collusion in oligopolistic markets. In this post, we will highlight the key features of the TCA's reasoning, touching specifically upon (i) the modified standard of proof applicable to exchanges of sensitive information, and (ii) the potential impact of the decision on retailers and suppliers active in the FMCG arena.

The Decision

The TCA finds that one of the suppliers has ensured the coordination of shelf prices (and further updates to those prices) between five retailers. Within this scope, it was stated that retailers shared competitively sensitive information, such as information on future pricing levels, with their competitors with the assistance of a common supplier. In what has become the first-ever explicit finding of a hub-and-spoke type infringement, the TCA imposed monetary fines in excess of USD 200 million on the undertakings in question. Furthermore, the supplier was subjected to an additional administrative fine, as it was found to constrain the commercial autonomy of a number of its retailers via engaging in resale price maintenance.

The Behaviour under Scrutiny

The web of relationships between the retailers themselves and their communication with common suppliers formed the focal point of the investigation, with the TCA according particular importance to four areas of interest, and specifically whether:

  • The retailers enabled price coordination via direct or indirect communication through one of their common suppliers,
  • The retailers directly communicated to share competitively sensitive information, such as future prices to be charged, dates on which prices would be updated, and details of periodic activities such as sales campaigns, or acquired such information through establishing contacts indirectly, such as through a common supplier.

When rendering its decision, the TCA seems to have relied extensively on correspondence between retailers and suppliers through a mobile chat app. Indeed, the reasoned decision references the aforementioned evidence liberally, arguing that through such communication, the undertakings were able to coordinate prices, "correct" price deviations, and retaliate against mavericks via issuing supplementary sales invoices for rate differences. Even though the TCA was not able to unearth evidence marking a direct communication between competitors, it nevertheless held the undertakings in question liable, as the latter were able to (and were, in any case, supposed to) foresee that strategically valuable information shared with a common supplier may end up in the hands of a competing retailer.

As mentioned earlier, the present decision is the first of its kind. Therefore, we think it would be of use to cite some of the evidence on which the TCA relied to construct a theory of harm based on hub-and-spoke type arrangements. Below are a few example dialogues between an employee of a retailer (R) and a supplier (S).

Example I

R: Hey, were you able to discuss the prices of [X]?

S: It will be TRY 13,10 tomorrow.

R: Great!

Example II

R: Good morning, have you increased the prices for [product Y]?

S: [attached is a screenshot displaying the price for the relevant product as TRY 18,30]

R: I see that it has not been increased?

Example III

(Email sent by a representative of a retailer to an employee of a supplier)

R: I saw [product Z] being sold for TRY 12,66. Let us look into this subject in detail after the conclusion of earlier activities in the market.

Example IV

S: If you redefine the price and reflect it in your online store on Friday, [Retailer Q] will also modify its prices on Friday and put them up on their online store on Saturday.

The Standard of Proof

The decision is expected to reverberate with regards to its significance as to the standard of proof in cases concerned with exchanges of sensitive information. As iterated earlier, the TCA was not able to produce findings evidencing actual communication between competitors – its arsenal was limited to indirect exchanges of information. Nevertheless, the fact that the decision was rendered as a hub-and-spoke infringement may reveal that the standard of proof as regards the finding of a hard-core infringement is lowered.

Based on our experience, it would not be wrong to conclude here that the TCA adopted a rather strict approach throughout the investigation. Even though numerous arguments were raised by the defendants as regards the standard of proof in cases involving allegations of hub and spoke infringements, the latter were not sufficient to influence the conclusions reached by the TCA to a significant degree. Additionally, empirical and economic evidence put forward by retailers were also considered but ultimately dismissed. In particular, several undertakings asserted that a substantial proportion of price increases seen in the FMCG sector was the result of regular increases in costs, inflationary trends in the Turkish economy, and the widening gaps between producer and consumer price indexes. Further still, differences in scale and countervailing buyer power were put forward as giving rise to an oligopolistic dependency scenario, whereby price competition in the relevant market followed closely the tenets of the Bertrand model.

What Next?

It is important to state that the decision was rendered in the light of the recently concluded sector inquiry into FMCG. Keeping in mind the findings of the latter in conjunction with the present decision, we would like to underline a final point, which may be viewed as increased awareness on part of the TCA as to the legality of acquiring services from consultancy firms involved in market research. In light of these considerations, we believe that the TCA may venture into novel inquiries concerned with the supply of market-related information from market research/consultancy firms in the future.


The FMCG-retail decision of the TCA proves to be a ruling of paramount importance for a number of reasons. As the first decision containing an explicit finding of infringement resulting from hub-and-spoke arrangements, it embarks on a journey to set a precedent for potential cases to come, if confirmed by the judiciary. Nevertheless, the decision raises several questions with regards to one of the most widely-discussed areas of competition enforcement: the standard of proof in cases where the allegedly infringing behaviour was carried out in a relevant market that demonstrates oligopolistic characteristics. It seems that the pendulum has swung towards the side with the lower threshold at the moment. In an environment with chronic inflationary trends and stiff competition, it remains to be seen whether the TCA will prevail with its aggressive attitude towards competition enforcement. That, only time (and the courts) will tell.

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.