INTRODUCTION
In the event that a common attitude or behaviour emerges among competing undertakings in a way that prevents them from acting independently of each other, and this common attitude or behaviour among undertakings affects the attitudes or behaviours of other competing undertakings, competition in the relevant markets may be restricted or even prevented.
The actions that restrict or prevent competition can occur among competing undertakings either within the framework of an agreement or in the form of a parallel behaviour that prevents the independent progression of attitudes and behaviours in the relevant markets without a specific agreement being identified.
As a matter of fact, in the Turkish competition law legislation, the concept of restrictive or anticompetitive agreements is interpreted to cover all kinds of understandings or agreements that undertakings feel bound and a variety of regulations have been adopted to prevent such agreements and actions between the competing undertakings.
A. CONCEPT OF CONCERTED PRACTISES IN TURKISH LAW
The first paragraph of Article 4 titled "Agreements, Concerted Practices and Decisions Limiting Competition" of the Act No. 4054 On the Protection of Competition ("Act") regulated as follows;
"Agreements and concerted practices between undertakings, and decisions and practices of associations of undertakings which have as their object or effect or likely effect the prevention, distortion or restriction of competition directly or indirectly in a particular market for goods or services are illegal and prohibited...."
and the definition of concerted practices is given in the preamble of the same article as "Even if the existence of an agreement between the parties cannot be established, direct or indirect relations between the undertakings that replace their own independent activities and ensure a coordination and practical cooperation are prohibited if they lead to the same result."
Although a definition of the concept of "concerted practice" is provided in the preamble of the Act, there is not any provision that regulates which situations will be considered as concerted practices and the conditions for being considered as concerted practices. However, the Competition Board ("Board") has set forth certain criteria on how concerted practices will be determined in practice in its decisions.
For example, in the Board's "Milk" decision, it is stated that in order for an action to be accepted as a concerted practice, all of the following conditions must be met.
– The existence of at least two or more undertakings,
– Conscious parallelism,
– These parallel behaviours cannot be explained on economic and rational grounds,
– Restriction of competition.
However, the Board interpreted the elements of concerted practices differently in the Gazette decision and stated that the following elements must be met in order to be considered as concerted practices;
– There must be a positive relationship between the parties, involving meetings, discussions, exchanges of information or research, often disclosed orally or in a written form.
– These relationships and contacts must have the objective of influencing market behaviour and practices and, in particular, eliminating the uncertainty of an undertaking's future market policy in advance.
– They should have the effect of creating or altering the market behaviour of undertakings in manner that it is not possible to determine it by purely competitive effects.
As it is seen, although they provide almost similar definitions, concerted practice is interpreted on a case-by-case basis according to its effect on the competitive environment in the relevant market, and it can be said that the Board generally considers the following elements in the determination of concerted practices; (i) the existence of two or more undertakings and the relationship between these undertakings (ii) the conscious parallel behaviour of the undertakings as a result of the relationship between the undertakings (iii) the inability to explain the parallel behaviour with an economic and rational justification (iv) the restriction or intent to restrict competition through such behaviour.
B. PRESUMPTION OF CONCERTED PRACTICE AND PROOF OF CONCERTED PRACTICE
In order to determine the existence of concerted practices between undertakings, aside from the elements that constitute concerted practices, it is also necessary to prove such concerted practices. However, in a legal system that restrictive agreements are prohibited, such agreements are usually concluded in a confidential manner and it may be difficult or even impossible to prove them.
In order to eliminate the difficulty of proof, it has been regulated that concerted practices may be proved by any evidence and a special provision regarding the burden of proof has been included in Article 4 of the Act as follow;
"In cases where the existence of an agreement cannot be proved, a similarity of price changes in the market, or the balance of demand and supply, or the operational regions of undertakings to those markets where competition is prevented, distorted or restricted, constitutes a presumption that the undertakings are engaged in concerted practice.
Each of the parties may relieve itself of the responsibility by proving, on the basis of economic and rational facts that it has not engaged in concerted practices."
Thus, it has been accepted that undertakings are engaged in concerted practices in the presence of the circumstances specified in the third paragraph of the Article 4. Hence, the burden of proof is shifted to the undertakings to prove that they are not engaged in concerted practices and aiming to prevent the law from becoming ineffective due to the difficulty of proof. In order to determine how this presumption of proof is interpreted in practice, it is important to evaluate the decisions of the Board.
In the such an important decision known as the "Newspaper" decision where the Board outlined criteria for determining concerted practice, the following criteria regarding proof were established and it was stated that "the existence of a relationship that prevents enterprises from acting independently must be demonstrated."
"In determining the existence of concerted practice, the emergence of three fundamental findings is sufficient. These findings are as follows:
- The existence of a relationship among the competitor undertakings,
- The presence of behaviours among competitor undertakings leading to a common stance and influencing the actions of other competitor undertakings,
- The existence of situations where the ability of competitor undertakings to act independently is eliminated."
However, in the Board's decision known as Aegean Ready-Mixed Concrete, it was stated "In order for the presumption to be applied, it is not necessary to show an effect in the market and it will be sufficient for the presumption to be used to demonstrate behaviours between undertakings that are not expected to be in a competitive structure (or behaviours similar to those in markets where competition is distorted), such as strategic, confidential information exchange." and regulated that the presumption of concerted practice can be applied even if there are not any parallel behaviours.
In addition, in the Yeast decision, where the Board made a special assessment regarding oligopolistic markets; it was stated that although parallel behaviours detected in oligopolistic markets are important evidence that the parties are engaged in concerted practices, they alone cannot prove concerted practices without being supported by other evidence, since undertakings operating in such markets have to take into account the possible reactions of their competitors when making important decisions, and the fact that the profit of the undertakings from the act in question depends on the reaction of their competitors that may cause parallel behaviours between the undertakings.
C. CONCLUSION
As a result, Turkish competition law prohibits "concerted practices" that cause more than one undertaking to eliminate fair competition by pursuing a parallel policy as a result of cooperation. The elements of concerted practices are generally evaluated by the Board as; realization between undertakings, existence of a connection between undertakings, the existence of parallel behaviour based on this connection and restriction of competition.
However, due to the difficulties encountered in proving concerted practices, a special presumption of proof has been regulated pursuant to the Act and the burden of proof has been reversed in a manner that undertakings are required to prove that they are not engaged in concerted practices.
The issue that when a "parallel behaviour" between undertakings constitutes a presumption of concerted practices has been subject to different interpretations in different periods in accordance with the Board decisions; but in general, only the parallel behaviour between undertakings has not been deemed sufficient in determining concerted practices. However, since there are also Board decisions, which directly prove the existence of a connection such as information exchanges, in addition to parallel behaviour or the existence of concerted practices even in the absence of parallel behaviour, it can be said that a case-based approach is adopted in the interpretation of the Act regarding concerted practices, and that the examination is carried out according to the actors affected in the relevant competitive environment and the behaviour applied.
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.
