Turkish Competition Authority Concludes Investigation into Gentleman's Agreements on the Labor Market

The final decision regarding the competition investigation conducted on certain enterprises to determine whether they violated Article 4 of Law No. 4054 on the Protection of Competition, by engaging in gentlemen's agreements not to hire each other's employees in the labor market, in accordance with the Competition Board decisions dated 01.04.2021 and numbered 21-18/213-M, 05.08.2021 and numbered 21-37/527-M, and 16.12.2021 and numbered 21-61/875-M, has been announced to the public, today.

The Competition Board has classified employee solicitation agreements as cartels and has identified bilateral agreements among 16 enterprises in this regard. As a result, a total of approximately 151 million Turkish Lira administrative fine has been imposed.

With respect to the mentioned investigation, based on the Report and Additional Opinion prepared in relation to the investigation, collected evidence, written defenses, statements made during the oral defense meeting, and the scope of the examined dossier, the enterprises subject to the investigation were found to have violated Article 4 of the Law No. 4054 on the Protection of Competition[1] by engaging in anticompetitive agreements, and it was determined that the actions in question cannot benefit from individual exemptions under Article 5 of the Law No. 4054 on the Protection of Competition[2], thereby leading to the application of Article 16 of the same Law and Article 5, paragraph (a) and paragraph (b) of the first paragraph, as well as the second paragraph, of the Regulation on Administrative Fines to be Imposed in Cases of Abuse of Dominant Position ('Regulation').

In accordance with the provisions of the first paragraph of Article 7, based on the annual gross revenues determined by the Board at the end of the fiscal year 2021, as estimated,

• D-Market Elektronik Hizmetler ve Ticaret AŞ: 4,834,124.55 TL,

• Vodafone Telekomünikasyon AŞ: 5,319,292.25 TL,

• Zeplin Yazılım Sistemleri ve Bilgi Teknolojileri AŞ: 192,973.74 TL,

and based on the provisions of the third paragraph (a) and the first paragraph of Article 7, on the annual gross revenues determined by the Board at the end of the fiscal year 2021, as estimated,

• Arvato Lojistik Dış Ticaret ve E-Ticaret Hizmetleri AŞ: 2,159,522.60 TL,

• Çiçeksepeti İnternet Hizmetleri AŞ: 517,883.20 TL,

• Sosyo Plus Bilgi Bilişim Teknolojileri Danışmanlık Hizmetleri Ticaret AŞ: 1,094,131.66 TL,

• TAB Gıda Sanayi ve Ticaret AŞ: 7,293,869.36 TL,

• Vivense Teknoloji Hizmetleri ve Ticaret AŞ: 1,218,089.30 TL,

• Türk Telekomünikasyon AŞ: 41,022,658.16 TL,

based on the provisions of the third paragraph (a) and the first paragraph of Article 7, on the annual gross revenues determined by the Board at the end of the fiscal year 2020, as estimated,

• Zomato İnternet Hizmetleri Ticaret AŞ: 20,827.94 TL,

and based on the provisions of the third paragraph (b) and the first paragraph of Article 7, on the annual gross revenues determined by the Board at the end of the fiscal year 2021, as estimated,

• Binovist Bilişim Danışmanlık AŞ: 49,831.55 TL,

• Bilge Adam Yazılım ve Teknoloji Anonim Şirketi: 2,183,227.89 TL,

• Flo Mağazacılık ve Pazarlama AŞ: 18,021,702.86 TL,

• Koçsistem Bilgi ve İletişim Hizmetleri AŞ: 6,513,239.09 TL,

• LC Waikiki Mağazacılık Hizmetleri Ticaret AŞ: 59,590,457.10 TL,

• Veripark Yazılım AŞ: 1,116,070.57 TL.

administrative fines were imposed;

and as for the other mentioned enterprises[3], it has been decided that since the allegations in the file have not been established as a violation of Article 4 of Law No. 4054 on the Protection of Competition, there is no need to impose an administrative fine in accordance with the third paragraph of Article 16 of the Law No. 4054 on the Protection of Competition.

Kind regards,

Zumbul Attorneys-at-Law

info@zumbul.av.tr

[1] Law on Protection of Competition, Article 4:

Agreements, concerted practices, and decisions of associations of undertakings that have as their object or effect the prevention, distortion, or restriction of competition, directly or indirectly, in a particular market for goods or services, or that may have such an effect, are illegal and prohibited under the Law No. 4054. These cases include, in particular:

a) Fixing the purchase or selling price of goods or services, determining the elements such as costs and profits that constitute the price, and all kinds of purchase or sale conditions,

b) Allocating the markets for goods or services, or sharing or controlling any kind of market resources or elements,

c) Controlling the supply or demand of goods or services or determining them outside the market,

d) Hindering, restraining, or preventing the activities of rival undertakings, or excluding them from the market by means of boycott or other behaviors, or preventing newcomers from entering the market,

e) Applying different conditions to persons in an equal position with equal rights, obligations, and performances, except for exclusive dealership,

f) Making the purchase of one product or service conditional upon the purchase of another product or service, contrary to the nature of the agreement or commercial customs, or imposing conditions for the display of another product or service requested by buyers or for the resale of a product or service that has been offered.

In cases where the existence of an agreement cannot be proven, similarities in price changes or supply-demand balance in the market or in the operational areas of undertakings, or the fact that they resemble those in markets where competition is hindered, distorted, or restricted, indicate that undertakings are engaged in concerted action. Each party may be exempted from liability by proving that they have not engaged in concerted action, provided that it is based on economic and rational realities.

[2] Law on Protection of Competition, Article 5:

In case all of the following conditions are met, agreements, concerted practices, and decisions of associations of undertakings shall be exempt from the application of the provisions of Article 4:

a) To achieve new developments and improvements in the production or distribution of goods or the provision of services, or to achieve economic or technical progress,

b) To provide benefits to consumers,

c) Not to eliminate competition in a significant part of the relevant market,

d) Not to impose restrictions more than necessary for the achievement of the purposes stated in subparagraphs (a) and (b) above.

Relevant undertakings or associations of undertakings may apply to the Board for a determination by the Board that the agreement, concerted practice, or decision within the scope of Article 4 meets the exemption criteria. Exemption may be granted for a specific period and subject to the fulfillment of specific conditions and/or obligations. Exemption decisions are valid from the date of fulfillment of the condition if the agreement or concerted action is made, the association of undertakings decision is taken, or if a condition is attached. If the conditions in the first paragraph are met, the Board may issue communiqués providing for the exemption of certain types of agreements as a group and specifying their conditions.

[3] 1- 41 29 Medya İnternet Eğitimi ve Danışmanlık Reklam Sanayi Dış Ticaret A.Ş 2- Anadolu Restoran İşletmeleri Ltd. Şti. 3- Doğuş Planet Elektronik Ticaret ve Bilişim Hizmetleri AŞ 4- Etiya Bilgi Teknolojileri Yazılım Sanayi ve Ticaret AŞ 5- Google Reklamcılık ve Pazarlama Ltd. Şti. 6- Grupanya İnternet Hizmetleri İletişim Organizasyon Tanıtım ve Pazarlama AŞ 7- Havas Worldwide İstanbul İletişim Hizmetleri AŞ 8- İş Gıda AŞ 9- Logo Yazılım Sanayi ve Ticaret AŞ 10- Meal Box Yemek ve Teknoloji AŞ 11- Migros Ticaret AŞ 12- Mobven Teknoloji AŞ 13- Mynet Medya Yayıncılık Uluslararası Elektronik Bilgilendirme ve Haberleşme Hizmetleri AŞ 14- Net Danışmanlık Eğitim ve Ticaret Ltd. Şti. 15- Noktacom Medya İnternet Hizmetleri San. ve Tic. AŞ 16- NTV Radyo ve Televizyon Yayıncılığı AŞ 17- Peak Oyun Yazılım ve Pazarlama AŞ 18- Pizza Restaurantları AŞ 19- Sahibinden Bilgi Teknolojileri Pazarlama ve Ticaret AŞ 20- Valensas Teknoloji Hizmetleri AŞ 21- Yeşil Vadi Tarım Gıda AŞ