What is the Turkish Competition Authority’s Approach to Competition Compliance Programs?
A Comparative Global Overview
Most undertakings agree that once they are put under the microscope of the Turkish Competition Authority (“TCA”), they are at the point of no return. However, while an investigation may be unavoidable, uncooperative behaviour is. The TCA has illustrated its tendency to sanction undertakings for aggravating and uncooperative behaviour even in cases where their conduct is not regarded as a violation of the rules of the Law on Protection of Competition No. 4054 (“Competition Law”). Read on to discover three major mistakes that should be avoided when dealing with the TCA, highlighted by their recent examples.
The TCA has the authority to conduct on-site inspections at undertakings’ premises in the scope of investigations it deems necessary. All personnel concerned are obliged to cooperate with case handlers to the greatest extent possible, providing them with any information, documents, books and other physical or digital instruments requested. Aggravating behaviour caused by an undertaking’s personnel may give rise to administrative liability. Such that, the TCA has the power to impose administrative fines when on-site inspections are hindered or complicated, even when an undertakings is not held liable or fined for any alleged breach of competition rules that gave the legal grounds for conducting an on-site inspection.
The recently amended provision of Article 15 of Competition Law providing the TCA with the power to examine “electronic documents” does not deliver any “practical news” for on-site inspections, but more states the obvious. The TCA’s on-site inspection power includes examining and taking copies of all types of documents and data, kept both physically and as electronic media in information systems, such as desktops, laptops, portable devices, external storage devices, servers, cloud services, and so on. Undertakings are responsible for preventing any possible interference with data that is to be examined and all platforms on which it is placed. Therefore, any kind of interference with such information systems during an inspection, including deleting documents, and blocking access to systems, databases, or e-mails, is highly likely to be deemed as “hindering or complicating” the examination.
The TCA’s TTNET decision is a great example of its position in cases where on-site inspections are hindered or ruined. During an on-site inspection while TCA case handlers examined electronic records through a desktop computer that had initially been seen to include many digital files, an employee deleted the documents via remote access, in the end leaving just four files. The case handlers detected the action instantly, causing the company to immediately submit a complete backup folder while claiming there was no intention to hide any documents. However, TTNET was handed an administrative fine of 0.5% of its gross revenue due to the fact that the possibility of document tampering had been raised by the deletion of the documents, and the on-site inspection had been hindered. TTNET appealed the TCA’s decision, however the State Council dismissed the case and decided that the undertaking prevented the investigation from being duly conducted, and therefore the administrative fine imposed by the TCA was found in accordance with Competition Law.
Another recent case concerned an on-site inspection conducted at a concrete production company, in 2018. During the case handlers’ examination of the company’s general sales e-mail account, which was initially seen to include more than one-thousand e-mails, an internet connection problem and e-mail access failure followed a power outage. The examination had been intended to continue at another company in the same corporate group with access to the same e-mail account, however, while the case handler tried to regain access to the account, “account deactivated” and "password changed in the last hour" warnings flashed up on the screen. When the case handler finally regained access to the account, only 44 emails remained. The TCA then imposed the undertaking with an administrative fine.
It is crucial to state that an undertaking that is subject to an on-site inspection does not have to be the undertaking under investigation. This means that the TCA can request an on-site inspection at an undertaking’s premises in order to gather evidence, even though the undertaking itself is not alleged to have committed any behaviour relevant to an investigation. The TCA’s “Medyacizade” decision given in 2018 is a great one to highlight this issue. Even though the media marketing company was not the subject of an investigation, the TCA fined them for hindering an on-site inspection, which was later implemented by the decision of a criminal magistrate.
It is worth noting, even though portable devices that are solely for personal use are not subject to inspection, the TCA can still have a quick “review” to assess whether such devices include any evidential information. Therefore, any obstructive behaviour by an undertaking’s personnel relying on the “personal and private data” defence may very well be deemed as “hindering” an on-site inspection, and thus, may expose an undertaking to an administrative fine.
The TCA may request any information from undertakings in the scope of an investigation or a merger or acquisition control. A request for information (RFI) is a useful instrument that works both in the interest of the TCA and undertakings. This instrument is an efficient way for the TCA to gather information, and to the extent that undertakings respond in a timely manner, it may even prevent a fully-fledged investigation being initiated.
The TCA’s recent decision relating to five global financial institutions is a good example to highlight its tendency to sanction undertakings for aggravating conduct that complicates an investigation, regardless of whether they are found guilty of violating competition rules. In January 2020, the TCA launched an investigation into several financial institutions’ agencies in Turkey, due to alleged manipulative behaviour violating competition rules in the scope of their financial services. During the preliminary investigation, the TCA issued an RFI asking for the electronic chatroom conversation archives of the undertakings’ foreign employees trading Turkish currency. Several undertakings failed to meet the RFI claiming that the requested data was neither in their possession nor available for their access. Moreover, the undertakings also asserted that since the requested data is subject to GDPR, as well as binding banking laws in different jurisdictions, the RFIs should have been issued to their parent companies.
However, the TCA clearly ruled out GDPR related defences by addressing the exemptions stated in Article 49 (e) “when the data transfer is necessary for establishment, exercise or defence of legal claims”. Consequently, an RFI does not constitute a breach of GDPR and anonymisation is only deemed reasonable when its scope is limited to personal data and doesn’t impede the inspection of the data.
According to the TCA’s “economic unity” principle, also by referencing several European precedents and practices, any legal notice and/or request made to subsidiaries is deemed to have been made to the parent company since it is the responsibility of undertakings to inform parent companies of legal notices. Finally, the TCA held the undertakings liable due to their failure to provide the requested information and imposed administrative fines.
Another recent, similar case worth mentioning is related to an undertaking that refused to accept an issued RFI because its trade name was not listed in the “addressees”. The TCA responded by stating that as the same information had also been requested from different undertakings, there was the possibility for confusion, however, the undertaking was still subject to the RFI. Nevertheless, the undertaking failed to provide the requested information in the stated timely manner and was subsequently fined by the TCA.
Pursuant to Competition Law, the notification system for the control of mergers and acquisitions is essentially conducted by undertakings on an ex ante basis. Competitive evaluations are principally done based on this information provided by undertakings in notification forms and answers to the probable subsequent RFIs. By its very nature, giving misleading or inaccurate information to the TCA in the scope of a merger or acquisition filing is also subject to administrative fines.
The TCA’s position against misleading information is independent from its decision as to whether a relevant transaction is prohibited or permissible according to Article 7 of Competition Law. The TCA’s “DOW/ Akzo Nobel” decision is a clear representation of the former; in a clearance process related to a dust coating business transfer to Akzo Nobel from Dow Chemicals, the TCA fined Akzo for providing misleading information. The TCA stated that, if false or misleading information is given on purpose, or as a result of negligence, whether such behaviour provides an advantage, or has a negative or positive effect on the result of the notification, it will not be considered as a mitigating factor for such behaviour and is still subject to administrative fines. Nevertheless, the TCA emphasized that such sanctions do not affect its decision regarding the clearance and allowed the relevant transaction since it did not result in a significant reduction of effective competition by creating or strengthening a dominant position.
Whether the misleading information submitted is relevant to the “competition law analysis” is not a determining factor since such criteria is not sought in law. The TCA’s “Blackstone/GIC” decision, which relates to misleading information given by GIC due to a translation mistake, highlights this issue. The undertaking was fined because the relevance of the submitted information to competition law analysis is not essential, does not affect the “misleading” character of the information, and is not a determining factor in imposing an administrative fine. This decision is also notable for reminding us that even if misleading information is given accidentally, as happened here with a so-called translation mistake, undertakings can be still held liable for their “negligent” behaviour.
The TCA’s attitude to sanctioning undertakings for their “dishonest” behaviour is extensive and determined separately from any violation of competition rules. When taking into consideration that the administrative fines imposed are calculated using an undertakings’ gross revenues, undertakings may be exposed to extortionate fines even though they are not found to be in breach of the competition rules. Therefore, a cooperative approach is essential when dealing with the TCA, regardless of the allegations in a case.
 TTNet Decision No. 13-46/601-M of 18.7.2013 Case No: 2012-2-144 (https://www.rekabet.gov.tr/Karar?kararId=e314ffca-f05f-4770-8970-2d2ce16a3f98)
 State Council Decision No: 13. D., E. 2015/1299 K. 2015/3809 T. 10.11.2015
 Coşkunlar Hazır Beton Decision 19-12/146-67 of 13.03.2019 (https://www.rekabet.gov.tr/Karar?kararId=35623d6a-fc7f-475d-a29c-ead8b475a924 )
 Medyacizade Decision No: 18-03/34-21 of 18.01.2018
 Citibank; Goldman Sachs; ING; JP Morgan; Garanti Bankası Decision No: 20-32/397-179 of 02.07.2020
 APEX decision No: 20-32/410-187 of 02.07.2020
DOW/Akzo Nobel Decision No: 10-24/339-123 of 18.3.2010 (https://www.rekabet.gov.tr/Karar?kararId=ae809166-2fb3-4fad-b737-67d1b293d665 )
 Blackstone/GIC Decision No: 18-04/64-37 of 08.02.2018 (https://www.rekabet.gov.tr/Karar?kararId=e77fc290-f04a-403a-b57a-52ae6db234ac )