19 September 2016

Powers During Dawn Raids: Does The Turkish Competition Authority Exceed Its Powers?



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The dawn raid in question occurred in early 2012 at the premises of a cement company subject to a preliminary investigation.
Turkey Antitrust/Competition Law
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A recent administrative court judgment upholding Turkish Competition Authority's ("TCA") decision involving cement producers triggered debates in relation to TCA's powers during dawn raids. The administrative court decision is noteworthy since it seems to disregard fundamental legal principles enshrined in the Turkish Constitution by, in particular, (i) extending the public authority's power beyond the legal limits and (ii) relying on evidence, the admissibility of which is highly controversial.

To begin with, the power of the TCA to conduct a dawn raid arises from the Law on the Protection of Competition ("Competition Law"). Within this framework, the Competition Law requires the TCA's experts to act in accordance with Article 15 of the Competition Law, which sets out the boundaries of the TCA's powers during dawn raids with:

  • examination of books, paperwork and documents of companies and associations, and taking their copies if needed,
  • requesting written or oral statement on particular issues, and
  • performing on-the-spot examinations with regard to any assets of companies.

Accordingly, the TCA does not need a specific search warrant from the court for conducting a dawn raid. An authorization from the Presidency of the TCA is well suited for visiting a company and conducting on-the-spot dawn raid with regard to any asset of companies.

The dawn raid in question occurred in early 2012 at the premises of a cement company subject to a preliminary investigation. The dawn raid started on its ordinary course, with the experts presenting their authorization papers and identities. Proceeding with the examinations, the TCA's experts searched a manager's personal briefcase and seized a number of the documents found in the personal briefcase. Later in the investigation, the TCA used the documents seized from the briefcase to support their allegations of anti-competitive behaviour and found the investigated companies in violation of the Competition Law.

The dawn raid procedure, as set forth under the Competition Law, does not grant the experts the power to examine personal belongings. In this framework, examining a personal briefcase might very well constitute an unlawful extension of powers that the Competition Law grants to the TCA and its officials. Nevertheless, use of documents seized during this examination of the personal briefcase as "evidence" might also breach the principle of admissibility of evidence as laid down under Article 38 of the Turkish Constitution which sets out that "findings obtained through illegal methods shall not be considered evidence".

In its decision, the TCA only dedicated one paragraph to this issue and claimed that the dawn raid and seizure was lawful. The TCA introduced in its decision, "no opposition" as a fact to justify the legality of the dawn raid by mentioning; "the documents in the briefcase were examined without any opposition". As specified above, the powers of the TCA experts are limited with the assets of companies and "not to oppose" or "granting consent" should no way be a ground to examine a personal object. Yet, the fact that the TCA puts forward "no opposition" as a justification for examination of the briefcase could be interpreted to imply the TCA's acknowledgment of the illegal nature of examination and use of the unlawfully seized documents as "evidence".

The decision of the TCA was later brought to administrative court for appeal. The court neither did question the legality of the dawn raid involving examination of a personal briefcase nor evaluated whether the TCA has exceeded its power. The court indicated that the TCA seized the evidence during a dawn raid in the office of the general manager. Failing to evaluate and discuss the legality of TCA's powers and the use of unlawfully seized documents as evidence, the court found the concerned dawn raid "legitimate" and, thus, missed the opportunity to create a much-needed legal certainty regarding the boundaries of the TCA's powers in dawn raids.

Although the recent decision of the administrative court upholding the TCA's decision left a question mark about the TCA's powers during dawn raids, the legal struggle continues before the Council of State as the parties have challenged the court's decision.

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.

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