The scrutiny of labor markets through the lens of competition law is a growing global concern, yet it has recently taken particular prominence in Turkey. As markets evolve and the dynamics of employment shift, regulatory bodies worldwide, including the Turkish Competition Authority, are paying closer attention to practices that could stifle competitive conditions and harm both employees and consumers. This focus was prominently displayed at the recent "Competition in Labor Markets Symposium," held on May 7, 2024, at Boğaziçi University's Albert Long Hall in Istanbul. The event, a collaboration between the Turkish Competition Authority and Boğaziçi University, underscored the critical intersections of employment practices and competition law.
The symposium not only served as a platform for discussing these urgent issues but also marked the announcement of an upcoming guide on the application of competition law in labor markets. This guide is anticipated to be a vital resource for companies, especially human resources departments, aiming to navigate the complexities of competitive practices responsibly. It comes at a time when certain sectors are increasingly scrutinized for agreements such as wage fixing and non-poaching, which are seen as detrimental to healthy market competition.
In Turkey, a striking example of these practices involves several French schools operating within the region. These institutions have come under close watch by the Turkish Competition Authority for their alleged collusive behavior in setting school fees and teachers' salaries. Such actions not only undermine the principles of free market competition but also impact the economic and social fabric of the education sector. The necessity of regulatory oversight and enforcement of competition laws in labor markets is, therefore, more crucial than ever to ensure fairness and protect the interests of workers and businesses alike.
The Turkish Competition Authority's Investigation
On November 10, 2022, the Turkish Competition Authority initiated an investigation against several French schools operating in Istanbul. The schools under investigation were suspected of jointly determining school registration fees and components of these fees, as well as the salaries of Turkish teachers, which raised significant antitrust concerns.
During the investigation, an oral defense meeting was held on April 17, 2024 at the Turkish Competition Authority. Subsequently, on May 9, 2024, the Authority announced its short decision, resulting in the imposition of fines, approximately 21 million Turkish Liras (approx. € 0.7 million) in total.
Findings and Legal Basis
The investigation revealed that the implicated schools had violated Article 4 of Law No. 4054, which prohibits agreements and concerted practices that prevent, restrict or distort competition within or affect goods or services markets. The specific violations included:
- Joint Determination of School Fees: Schools were found to coordinate on registration fees and the elements comprising these fees.
- Joint Salary Setting for Teachers: The schools also colluded to set the salaries of their Turkish teachers.
These practices are harmful as they eliminate competition in setting salaries and fees, potentially leading to higher costs for parents and lower salaries for teachers, thereby distorting the natural competitive environment.
Penalties Imposed
The fines imposed reflect the severity of the infringement and are intended to deter similar anti-competitive behavior in the future. The penalties for each school, converted to euros (approximation, assuming 1 EUR = 30 TRY), were as follows:
- Saint-Joseph French High School was fined 3,339,516.51 TRY for jointly determining school fees (approx. €111,317) and 2,226,344.34 TRY for colluding on teachers' salaries (approx. €74,211).
- Saint Benoît French High School received a penalty of 3,279,720.74 TRY for jointly determining school fees (approx. €109,324) and 2,186,480.49 TRY for colluding on teachers' salaries (approx. €72,883).
- Notre-Dame de Sion French High School was fined 2,532,943.46 TRY for jointly determining school fees (approx. €84,431) and 1,688,628.97 TRY for colluding on teachers' salaries (approx. €56,288).
- Saint Michel French High School faced fines of 1,745,532.89 TRY for jointly determining school fees (approx. €58,184) and 1,163,688.59 TRY for colluding on teachers' salaries (approx. €38,790).
- Sainte Pulchérie French High School was penalized 1,897,231.86 TRY for jointly determining school fees (approx. €63,241) and 1,264,821.24 TRY for colluding on teachers' salaries (approx. €42,161).
Compensation Rights in the Wake of Price-Fixing in French High Schools
Following the publication of the reasoned decision by the Turkish Competition Authority, families who had enrolled their children in the implicated French schools during the period of the cartel have the right to claim compensation for the overcharges they incurred due to the cartel-established fees. Moreover, teachers employed at these schools during this time may also seek compensation for the reduced salaries resulting from these anti-competitive practices.
The right to seek compensation in these cases extends to potentially receiving up to three times the amount of the proven damages, highlighting the severe penalties that can be imposed on entities found to be in violation of competition laws. Calculating the precise amount of compensation requires significant expertise, considering the complexities involved in proving the extent of economic damage and linking it directly to the anti-competitive conduct.
The implications of competition law in private law are particularly significant in this case. They reflect the broader commitment of legal systems to uphold market integrity and protect individual rights against corporate violations.
Conclusion
The Turkish Competition Authority's actions against these French schools in Istanbul demonstrate a robust approach to enforcing competition law in labor markets. By imposing significant fines, the authority signals its commitment to maintaining competitive practices in the education sector and labor market. This case serves as a critical reminder to other institutions that compliance with competition laws is essential for fostering a fair and competitive market environment.
We will continue to monitor developments in this case closely. Stay tuned for further updates on this significant legal discourse.
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