Discrimination Claims in Competition Law: Evaluation of Unilateral Behavior of Undertakings within the scope of Law No. 4054 on the Protection of Competition

Article 4 of the Law No. 4054 on the Protection of Competition (“Act”) stipulates that “Agreements between undertakings, concerted practices and such decisions and practices of associations of undertakings that directly or indirectly prevent, distort or restrict competition in a particular goods or services market, or that have or may have the effect of preventing, distorting or restricting competition, are unlawful and prohibited“. In subparagraph (e) of the aforementioned Article, “Except for exclusive dealership, the application of different conditions to persons in equal situations for equal rights, obligations and performances” is listed as an example for the behaviors that are considered as a violation under Article 4.

Article 6 of the Act stipulates that “It is unlawful and prohibited for one or more undertakings to abuse its dominant position in the market for goods or services in the whole or a part of the country, either alone or through agreements or joint actions with others” and subparagraph (b) of the said article states that “Direct or indirect discrimination against equal purchasers by imposing different conditions for the same and equal rights, obligations and performances” is considered as an example of abuse.

As accepted in the decisions of the Competition Board (“Board“), in order for discrimination claims to be evaluated within the framework of Article 4 of the Act, the discriminatory behavior must be based on an agreement or a concerted practice or a decision.

• In its ADIDAS decision dated 21.04.2022 and numbered 22-18/300-133, the Board stated that in order for any undertaking’s behavior to be subject to a discrimination claim under Article 4, paragraph two, subparagraph (e) of the Act, the discriminatory behavior must violate Article 4 of the Act, and this practice must be “in violation of the Article 4 of the Act. In order for any undertaking’s conduct to be subject to a discrimination claim under subparagraph (e) of the second paragraph of Article 4 of the Act, the discriminatory conduct must be in violation of the article of the Act and this practice must be “through an agreement/ concerted action between undertakings or as a result of decisions taken by associations of undertakings“, in other words, “unilateral conduct of undertakings without an agreement and/or concerted action between undertakings” cannot be evaluated under Article 4 of the Act.

The Board also decided that since the allegations raised by the complainant only included unilateral behavior of ADIDAS and the on-site investigation conducted within the scope of the file did not reveal any evidence of discrimination by ADIDAS “through an agreement”, the conduct subject to the complaint did not have any aspect that would require examination under Article 4 of the Act.

In the same decision, the Board stated that in subparagraph (b) of the second paragraph of Article 6 of the Act, “directly or indirectly discriminating against equal buyers by offering different conditions for the same and equal rights, obligations and performances” is listed among the cases of abuse, and in this context, since the acts subject to the complaint may correspond to the act of “discrimination”, which is one of the cases of abuse of dominant position, the allegations subject to the file are handled within the framework of the aforementioned subparagraph provision.

• Similarly, in the Board’s decision dated 01.04.2021 and numbered 21-18/229-96 regarding the undertakings operating in the MDF and particleboard market, the Board decided that in order for the discrimination claims to be evaluated within the scope of Article 4 of the Act, the conduct alleged to have been practiced by the producer undertakings “must be carried out with a common will“, in other words, “unilateral acts of undertakings” “without agreement and/or concerted practices between undertakings” cannot be evaluated within the scope of the Act.

In the aforementioned decision, the Board evaluated the discrimination allegations within the scope of Article 6 of the Act, and examined whether Article 6 of the Act was violated or not within the framework of the elements related to the practice of discrimination, assuming that the undertakings were in a dominant position. In the aforementioned decision, the Board defined discrimination in competition law practice as the treatment of undertakings in a dominant position differently or equally to undertakings in the same or equal position, or equally to undertakings in different positions, without rational grounds.

• In the Brisa decision dated 24.07.2020 and numbered 20-35/455-202, the Board stated that in order for the discrimination claim to be handled within the scope of Article 4 of the Act, it is not sufficient for a vertical agreement to be concluded between the supplier and the other buyer, in this case the competitor dealer, with better conditions than the vertical agreement concluded between the supplier and the complainant undertaking, assessed that there must be collusion between the provider and another undertaking to the detriment of the discriminated undertaking and concluded that the examination of the file did not reveal any evidence of such an agreement or concerted practice.

As a result, it is understood that in its decisions, the Board draws attention to the fact that in order for the discrimination claims to be evaluated within the scope of Article 4 of the Act, the discriminatory practices must be carried out through agreements/ concerted practices between undertakings or as a result of decisions taken by associations of undertakings, and that only unilateral acts of the undertaking without agreements and/or concerted practices between undertakings shall not be evaluated within the scope of Article 4 of the Act, the Board also examines the claims regarding discrimination practices within the scope of Article 6 of the Act, if the undertaking alleged to have discriminated is in a dominant position.

Based on the Board’s approach on this matter, it is possible to say that, especially for the undertakings that are not in a dominant position, “unilaterally” applying different sales conditions to its dealers or distributors and/or imposing different commercial terms to its dealers or distributors will not constitute discrimination and such conduct alone will not lead to a competition law violation under Article 4 of the Act..

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