ARTICLE
26 September 2023

Ophthalmic Lens Decision: Turkish Competition Board Determines That Internal Correspondence Indicating An Infringement Is Insufficient Evidence To Initiate An Investigation

IO
Inal Law Office

Contributor

Led by Şeyma İnal, İnal Law Office combines in-depth knowledge of Turkish law with an international outlook. Experienced members of our team assist local and multinational clients in Commercial, M&A, Shipping, Banking and Finance, Corporate, Energy, Transportation, Construction, Competition, Employment, Litigation and Arbitration fields under the requirements of business frameworks.
The reasoned decision of the Turkish Competition Board ("TCB" or the "Board") dated 05.01.2023 no. 23-01/6-5 regarding
Turkey Antitrust/Competition Law

The reasoned decision of the Turkish Competition Board ("TCB" or the "Board") dated 05.01.2023 no. 23-01/6-5 regarding the preliminary investigation in the optical sector was published on the official website of the Turkish Competition Authority ("TCA" or the "Authority"). As a result of the preliminary investigation conducted with regard to the allegation of a violation of Article 4 of the Law No. 4054 on the Protection of Competition ("Law No. 4054") through an anti-competitive agreement between the undertakings operating in the optical sector, the Board decided that there is no need to initiate an investigation, despite the recommendation of the case reporters to proceed with an investigation.

I. Phases of the Case

The preliminary investigation was initiated following a complaint submitted to the TCA with the request of confidentiality. This complaint was entered in the TCA's records on 04.05.2021 and pertained to the allegation that EssilorLuxottica S.A. ("EssilorLuxottica") had contravened Articles 4 and 6 of Law No. 4054 through actions that excluded and obstructed the activities of its competitors in the optical market. Subsequently, the relevant complaint was deliberated upon in the Initial Examination Report, which was prepared on 15.06.2021. As a result, it was decided to initiate a preliminary investigation into these allegations.

During the course of this preliminary investigation, seven undertakings and an association of undertakings: EssilorLuxottica, Beta Optik San. ve Tic. Ltd. Şti. ("Beta Optik"), Cemfa Optik San. ve Tic. A.Ş. ("Cemfa Optik"), Gelişim Optik A.Ş. ("Gelişim Optik"), Hoya Turkey Optik Lens San. ve Tic. A.Ş. and Seiko Optical Europe GmbH Merkezi Almanya İstanbul Merkez Şubesi ("Hoya Optik"), Merve Gözlük Camı San. ve Tic. A.Ş. ("Merve Gözlük"), Opak Lens San. ve Tic. A.Ş. ("Opak Lens"), and Association of Turkish Eyewear Industrialists were examined. Notably, Opak Lens, one of the undertakings under scrutiny, is a subsidiary of EssilorLuxottica and examinations were also conducted in other subsidiaries of EssilorLuxottica as part of this preliminary investigation. While on-site inspections were underway, certain findings that were unrelated to the original complaint but raising additional competition law concerns have been encountered.

II. Board's Examination

The reasoned decision highlights that the decision to initiate a preliminary investigation was predicated on a single WhatsApp correspondence obtained from an on-site inspection at Altra. This correspondence had prompted suspicions of a restrictive agreement among competitors as per Article 4 of Law No. 4054. A careful analysis of this correspondence revealed that it conveyed the communication between two Altra employees, which suggested that executives from competing companies were contacted to ascertain the rate of increase of the rival undertaking. Another similar correspondence indicated the acquisition of information about future prices from a branch manager of Merve Optik, a competitor.

The Board diligently scrutinized whether these two WhatsApp correspondences could be indicative of an agreement among competitors to fix prices. It was ascertained whether these correspondences were not exchanged between employees of the same competing entity and whether they constituted direct evidence, given that they were internal statements exchanged among employees within the same undertaking regarding a price-fixing agreement with a competitor undertaking. Within this context, the examination focused on whether these two findings harmonized with the information and documents obtained in the case and whether the pricing data of the undertakings supported these specific findings.

When the other findings obtained in the case were assessed: (i) the price lists pertaining to competitors' ongoing campaigns did not raise significant competition concerns, as they were collected from the market and/or customers, (ii) competing undertakings demonstrated competitive behaviour in the market, (iii) price increases appeared to be grounded in cost considerations, (iv) competitors seemed to entertain reservations about the accuracy of prices or increase rates obtained from the customers, (v) some undertakings even restricted the distribution of their lists to a limited number of customers in order to safeguard the confidentiality of their strategies, (vi) pricing policies were influenced by customer reactions, (vii) in some instances, undertakings withheld price lists from their own employees to maintain their confidentiality, and (vii) price lists obtained from competitors were used for competitive purposes. In light of these considerations, it was concluded that the documents in question could not provide any evidence of an anti-competitive agreement between competitors. This conclusion was reached because the two pertinent findings were internal correspondences, and all other documents, including the timelines of price adjustments, indicated that the undertakings were engaged in competition.

Additionally, data regarding updates to the price lists for ophthalmic lens manufacturers from 2016 to the present were analysed. A general analysis of these price transitions revealed significant variation in the timing of price updates among undertakings each year. However, there were instances where price updates occurred in close proximity within the same month. The analysis of these price transitions led to the conclusion that the coincidence of price updates among undertakings, which occurred in conjunction with numerous other price transitions throughout the year, did not constitute evidence of consensus or information exchange among competitors.

III. General Assessment

It was observed that undertakings operating in the market for the manufacture and wholesale distribution of ophthalmic lenses typically furnish opticians with product price information in the form of printed or electronic price lists. Opticians may subsequently share these price lists with their suppliers for negotiation purposes. Consequently, undertakings acquire price lists from their competitors in the market and employ them to formulate strategies in their competitive endeavours.

When assessing the findings and the overall functioning of the sector holistically, there was no substantiated evidence of a detailed, comprehensive, systematic, or mutual exchange of competitively sensitive information among competitors.

IV. Conclusion

In accordance with the above findings and assessment, the Board concluded that it was not possible to find that the undertakings active in the market for the manufacture and wholesale of ophthalmic lenses and falling within the scope of the preliminary investigation had entered into an agreement with the object and/or effect of restricting competition and decided, by decision numbered 23-01/6-5 and dated 05.01.2023, that it was not necessary to initiate an investigation.

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.

See More Popular Content From

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More