Author: Can Yıldız
Introduction
The settlement mechanism has only recently been introduced to Turkish competition law practice. It entered into force with the amendment made to the Law on the Protection of Competition (“Law”) numbered 4054 on 16.06.2020, and has been in effect for less than two years. In this relatively short period of time, parties in a variety of cases under investigation received a penalty reduction based on reaching a settlement. However, the first settlement case that was reflected in the reasoned decisions of the Competition Board (“Board”) was the case that concluded with decision dated 05.08.2021 and numbered 21-37/524-258, published in late March 2022.
This investigation, which involved Türk Philips Ticaret A.Ş. (“Philips”), Dünya Dış Ticaret Ltd. Sti. (“Dünya”), Melisa Elektrikli ve Elektronik Ev Eşyaları Bilg. Don. İnş. San. Tic. A.Ş. (“Melisa”), Nit-Set Ev Aletleri Paz. San. ve Tic. Ltd. Şti. (“Nit-Set”) and GİPA Dayanıklı Tüketim Mamülleri Tic. A.Ş. (“Gipa”), was the first case that resulted in a settlement after all of the undertakings submitted their requests for settlement to the Competition Authority (“Authority”) and the requests were accepted by the Board. As it is the first concrete example of how the Board oversees the settlement procedure, the decision in question needs to be examined.
Scope of the Investigation and Procedural Steps
Philips, Dünya, Melisa, Nit-Set and Gipa are undertakings operating in the small household appliances market. In the investigation, which was initiated based on receiving complaints, the allegations against these undertakings were that they restricted the resale prices that their distributors and authorized dealers could charge, and prevented them from conducting sales over the internet.
It is well known that internet sales are principally considered to be “passive sales” from a competition law perspective. Therefore, restrictions imposed by suppliers on a buyers’ passive sales are considered vertical restraints which limit competition under Article 4 of Block Exemption Communiqué on Vertical Agreements No. 2002/2 and Article 4 of Law.
On 07.01.2021, after considering the findings obtained in the preliminary investigation, the Board launched its main investigation to determine whether the five undertakings listed above had violated Article 4 of the Law by intervening in the resale prices of their distributors and other authorized resellers, and restricting their internet sales.
Following the investigation decision of the Board, the investigated undertakings submitted their requests to submit commitments to the Authority in order to conclude the case without receiving any penalties. However, the Board did not accept these requests as the allegations were quite serious.
Subsequently, the investigated undertakings submitted their settlement requests to the Authority in May 2021. As a result of the settlement negotiations, the settlement proposals were submitted to the Authority in July. Then, with its interim settlement decisions dated 14.07.2021 and numbered 21-35/495-MUA, 21-35/496-MUA, 21-35/497-MUA, 21-35/498-MUA, 21-35/499-MUA, the Board determined the conditions of settlement. Subsequently, within the framework of the settlement proposals submitted by Philips, Dünya, Gipa, Melisa and Nit-set in July, it determined that it would be appropriate to conclude the investigation with a settlement.
