Information Exchange

Last verified on Friday 12th May 2017

Turkey

Gönenç Gürkaynak and K Korhan Yıldırım
ELİG, Attorneys-at-Law
  1. 1.

    Describe the principal competition rules governing information exchange in your jurisdiction.

  2. The main legislation that applies to information exchange is article 4 of Law No. 4054 on the Protection of Competition (Law No. 4054). It prohibits all agreements between undertakings, decisions by associations of undertakings and concerted practices that have (or may have) as their object or effect the prevention, restriction or distortion of competition within a Turkish product or services market or a part thereof.

    Article 4 provides a particular list of cases that are deemed as agreements, concerted practices and/or decisions restricting competition, which is, to some extent, similar to article 101 of the Treaty on the Functioning of the European Union (TFEU). Accordingly, such cases are as follows:

    • fixing the purchase or sales price of goods or services, factors such as cost and profit which form the price, and any terms of purchase or sale;
    • allocating markets for goods and services, and sharing or controlling all kinds of market resources or elements;
    • controlling the amount of supply or demand in relation to goods or services, or determining them outside the market;
    • obstructing and restricting the activities of competing undertakings, or excluding undertakings operating in the market by boycotts or other behaviour, or preventing potential new entrants to the market;
    • applying different terms on equal rights, obligations and acts to persons with equal status, except for exclusive dealing;
    • contrary to the nature of the agreement or commercial usages, obliging to purchase other goods or services together with a good or service, or tying a good or service demanded by purchasers acting as intermediary undertakings to the condition of displaying another good or service by the purchaser, or putting forward terms as to the resupply of a good or service supplied.

    The Board has also published a significant secondary legislation instrument, namely the Guidelines on Horizontal Cooperation, which contain a general analysis of articles 4 and 5 of the Competition Law, and general competition law concerns on, inter alia, information exchanges. Pursuant to the Guidelines on Horizontal Cooperation Agreements, the restrictive effects of information exchanges are assessed on the basis of their adverse impact on at least one of the parameters of the competition in the market, such as price, output, quality, product variety or innovation.

    Apart from the legislation cited above, information exchange cases are usually evaluated in line with the previous case law of the Board and the relevant guidelines. Landmark cases such as the Automotive Market decision are elaborated below in depth.   

  3. 2.

    Which bodies are responsible for enforcing competition rules on information exchange in your jurisdiction?

  4. The national competition authority for enforcing competition law in Turkey is the Competition Authority, a legal entity with administrative and financial autonomy. The Competition Authority consists of the Competition Board, presidency and service departments. As the competent body of the Competition Authority, the Competition Board is responsible for, inter alia, investigating and condemning agreements, concerted practices and decisions restricting competition. The Competition Board has seven independent members and is seated in Ankara. The service departments consist of five main units. There is a "sectorial" job definition of each main unit.

  5. 3.

    Describe the types of information exchanges that may be caught under the competition rules in your jurisdiction.

  6. The Competition Board finds that exchange of information is mainly carried out in three ways: directly among parties, by the third parties, or via using publicly available platforms (PETDER II decision of 22 September 2011, 11-48/1215-428).

     The exchange of data and information between competitors is the most obvious way of exchanging information (through horizontal relations). However, even if there is no direct exchange of information between competitors, indirect information exchange may also raise competition law concerns. In this respect, information may be directly exchanged among undertakings, or indirectly via associations of undertakings such as sectoral associations, market research institutions and similar third parties or via the supply or distribution network of undertakings (as set out in para 40 of Guidelines on Horizontal Cooperation Agreements).

    The nature of the information that is exchanged carries vital importance for the analysis. Only exchange of strategically valuable information that may affect the market behaviour of the undertakings is considered to be caught by the competition rules. The notion of strategic information is usually considered to be a factual interpretation subject to change per circumstances of the case. However, there are certain usual suspects that appear often in the Competition Board’s decisions such as information on prices, stocks, prospective strategies, services or goods, pricing stirs or any other strategically valuable commercial information. 

    Moreover, undertakings may also potentially violate competition law via transferring strategic information through the intermediary of a supplier or costumer. However, the Board has not found an infringement perpetrated via the agency of a third party. 

  7. 4.

    Are some information exchanges regarded as more serious breaches of the competition rules than others?

  8. Exchange of information raises serious competition law concerns if the information contains parameters like prices, customer information, sales, orders or future strategies. Information such as market shares, production volumes, capacity utilisation rates or terms of sales also have a potential to distort the competitive process when exchanged.

    Direct exchanges between competitors of information relating to future pricing and output decisions are usually considered to be more risky. In a recent decision, the Competition Board expressed that exchanging information to facilitate, monitor or execute collusion would be met with allegations greater than exchange of information since the information exchange may lead to a cartel or concerted practice (Aegean Cement Producers decision of 14 January 2016, 16-02/44-14). For this reason, it is imperative for parties to expressly object to such an exchange of information regardless of the nature or the number of exchanges between the undertakings. Moreover, the Competition Board is apathetic to the effects of the conduct on the competition when finding a violation.

    The Aegean Cement Producers decision is the product of the Board’s inclination to find information exchanges as a facilitating factor of cartel. The Board found exchange of competition sensitive information as a part of the pre-existing cartel in its Ceramics (24 February 2004, 04-16/123-26), Wood Board I and II (6 September 2002, 02-53/685-278; 25 February 2003, 03-12/135-63), Fertilizer (8 February 2002, 02-07/57-26) decisions.

    The Board also accepts exchange of competition sensitive information as a form of agreement and a standalone violation. On this front, Automotive Market decision (18 April 2011, 11-24/464-139) is the landmark decision where the Board distinguished the set of facts from cartel or concerted practice cases. The Board found that the frequency and depth in which trade secret grade information was exchanged violated competition law. It is noteworthy that the Board adopted a draconian approach in its decision regarding data on future strategies, targets and stocks.

    The Board is very strict against exchanges of information on prices. The Board stated that “competition law prohibits competitors not only to make an agreement on prices, but also to consult and communicate in this regard” in the Media Investigation decision (1 February 2000, 00-4/41-19). The Board assessed the exchange of information on the prices of raw materials and tax payments as exchange of confidential information that may increase coordination in its Automotive Manufacturers Association decision (20 September 2012, 12-44/1350-455). 

  9. 5.

    To what extent is it necessary for an information exchange to have a negative effect on competition to prove a competition infringement in your jurisdiction?

  10. The effect of information exchange on competition depends on elements related to the structure of the market, such as the degree of concentration, transparency and stability of the market and the similarity of the undertakings in it (symmetry), as well as on the nature of the information exchanged, since it can render the relevant market more favourable to coordination between competitors (para 43 of Guidelines on Horizontal Cooperation Agreements).

    Moreover, information exchange among competitors is considered a cartel and fined as such if it shows the nature of an agreement with the object of fixing prices or quantities.

    Any information exchange with the objective of restricting competition in the market will be considered as a restriction of competition regardless of its effect. The legal and economic context in which the information exchange took place will be taken into consideration when assessing whether an information exchange constitutes a restriction of competition by object. To this end, it will be evaluated whether the information exchange would lead to a restriction of competition by nature.

  11. 6.

    What types of information exchanges are not caught by the competition laws in your jurisdiction? For example, are certain types of information exchanges viewed as pro-competitive?

  12. Information exchanges may generate various efficiency gains as expressed in the Guidelines on Horizontal Cooperation Agreements of 30 April 2013. For instance, information exchange may eliminate problems of information asymmetries between parties. Regulated exchanges between market players may offer them reliable benchmarks to gauge their effectiveness against. Sharing information may also help undertakings to better micromanage their inventories, ensure quicker delivery of products to consumers, or lower their perception of market volatility. This may result in direct benefits for the consumers who would have reduced search costs, increased choices and better overall quality of service.

  13. 7.

    To what extent can public information be caught under the competition rules governing information exchange in your jurisdiction?

  14. In general, exchanges of genuinely public information are not expected to constitute an infringement under article 4 of Law No 4054. Genuinely public information is defined in the Guidelines on Horizontal Cooperation Agreements of 30 April  2013, as information that is equally accessible to all competitors and customers in terms of costs of access.

     Some markets such as banking, insurance and advertisement rely greatly on availability of reliable and accurate data. The data cannot be considered to be genuinely public if the cost of collecting the relevant data that is frequently exchanged among the competitors is deterring new players from entering the market (paragraph 72 of Guidelines on Horizontal Cooperation Agreements). A possibility to obtain necessary information from the market does not necessarily mean that such information constitutes market data readily accessible to competitors.

    Exchange of information readily available to the public may decrease the likelihood of distortion of competition in the market, to the extent that cooperative effects of the exchange of information can be constrained by other undertakings, potential competitors and customers. However, genuinely public exchanges of information would not mean that the possibility of a collusive outcome in the market is completely eliminated (paragraph 74 of Guidelines on Horizontal Cooperation Agreements). The Board elaborated on this distinction in Petroleum Industry Association decision (21 November 2013, 13-64/904-384). In this decision, the Board resolved that circulating price lists on a monthly basis among petroleum industry members would likely raise competition law concerns as it would greatly increase the price transparency in the market. 

    Furthermore, certain information exchanges may be sanctioned by the Competition Authority when these exchanges are considered to be contributing to the public welfare. For example, Block Exemption Communiqué Concerning Insurance Sector No. 2008/3 permits insurance related databases to be formed by pooling risk information of multiple insurers. These databases receive exemption from the general rule even though they may contain strategic and valuable information.

  15. 8.

    Are there any specific competition rules in place for certain types of information exchange or certain sectors?

  16. Certain markets may facilitate coordination among undertakings due to their characteristics in the relevant market. Exchanges of information in such markets may lead to more restrictive effects compared to markets that do not have such characteristics. Code sharing agreements in the air freight sector are disputed on the same grounds respect to the characteristic of the market. Banks are capable of exchanging customer credit risk information granted that they adhere to specifications in article 73 of the Banking Law No. 5411. The insurance sector was assigned specific competition rules based upon the nature of service offered and the structuring of the sector. The relevant communiqué is Block Exemption Communiqué Concerning Insurance Sector No. 2008/3. It sets the prerequisite conditions for the exemption of certain agreements in the insurance sector such as pooling insurance related risk information into databases or exchanging the same information between different players in the insurance market. Moreover, the cement market has also being examined carefully in terms of sharing information. 

  17. 9.

    Have public bodies in your jurisdiction published any guidance on the competition rules governing information exchange?

  18. The Competition Authority has published the Guidelines on Horizontal Cooperation Agreements on 30 April 2013. The mentioned guideline contains a section that handles the competitive assessment of exchange of information.

  19. 10.

    What defences are available for information exchanges caught by the competition laws in your jurisdiction. 

  20. Defences that may be raised before the Competition Board are not limited to a certain type or extent in Turkey. The Competition Board is obliged by law to recognise and take account of any and all defences that may be raised by the defendants. Defendants are able to argue their case by employing arguments from a large spectrum of defences. Most common defences are derived from evidentiary disputes, counter arguments or evidences, economic arguments or projections that seek to undermine the Competition Authority’s assertions.

    Most prominently, defendants may seek to dispute the strategic or transparency increasing effects of the object data of the information exchange. The Competition Board’s previous landmark decisions consistently find a dichotomy between current and past information (Fertilizer Producers decision of 8 August 2002, 02-47/586-M; Automotive Distributers Association decision of 15 April 2004, 04-26/287-65). According to these precedents, exchange of current information or future plans risk changing the competitive landscape of the market and are hazardous from a competition law perspective. On the other hand, the Board finds that dated data that is no longer relevant to the circumstances of the market may be exchanged in certain circumstances without invoking competition law repercussions.

    In cohesion with the answer to question 11, another common point of defence is to dispute whether the information exchange actually took place. The Competition Board accepts a low evidentiary threshold regarding allegations of information exchange. It is then for the defendant to show and prove that the alleged information exchange did not take place. 

  21. 11.

    What is the standard of proof and on whom does the burden of proof fall in information exchange cases? Are there any scenarios in which the burden of proof is or could be reversed?

  22. The standard of proof typically rests with the Competition Authority to substantiate its case. The Board’s review of information exchange cases is twofold. The information exchange may be an end in and of itself or be the means of a much dire competition law violation such as concerted practice or cartel (Aegean Cement Producers decision of 14 January 2016, 16-02/44-14). The applicable standard of proof varies according to this separation and on the specifics of the market in question. According to Board’s past decisions, an oligopolistic market with high levels of transparency invokes different competition law concerns than a highly competitive market with low entry thresholds (Automotive Market decision of 18 April 2011, 11-24/464-139). In exchange of information cases, the Board looks for factual, structural and/or behavioural evidence that information is exchanged between the parties (Flat Steel decision of 16 June 2009, 09-28/600-141; Petroleum Industry Association decision of 21 November 2013, 13-64/904-384). Frequency, relevancy and level of detail of the information exchanged are also pertinent to the analysis.

    The burden of proof may not be reversed at the outset in exchange of information cases; the initial burden is on the Competition Authority to demonstrate its case. It then falls on the defendant to prove that the alleged information exchange did not take place. 

    However, there are cases where the Competition Authority may easily shift the burden of proof onto the investigated parties. This is called “the presumption of concerted practice” which can be found in concerted practice cases. Similar to the EU competition law regime, a concerted practice is defined as a form of coordination between undertakings that, without having reached the stage where a so-called agreement has been properly concluded, knowingly substitutes practical cooperation between them for the risks of competition. The allegation of concerted practice is common in cases concerning exchange of information. 

  23. 12.

    What are the sanctions for anticompetitive information exchanges in your jurisdiction?

  24. The sanctions that could be imposed for anticompetitive information exchanges under Law No 4054 are administrative in nature. Therefore, the competition law leads to administrative fines (and civil liability), but no criminal sanctions. However, certain competition law violation types such as bid rigging are also criminally prosecutable – they may trigger criminal sanctions in addition to administrative monetary fines and civil liability.

    Undertakings and associations of undertakings condemned by the board for violating article 4 through an illegal information exchange may be given administrative fines of up to 10 per cent of their Turkish turnover generated in the financial year preceding the date of the fining decision (or, if this is not calculable, in the financial year nearest the date of the fining decision). Employees or members of the executive bodies of the undertakings or association of undertakings that had a determining effect on the creation of the violation would also be fined up to 5 per cent of the fine imposed on the undertaking or association of undertaking.

    The Regulation on Monetary Fines for Restrictive Agreements, Concerted Practices, Decisions and Abuses of Dominance ('the Regulation on Fines') is applicable for calculation of monetary fines in the case of an antitrust violation, including information exchange. According to the Regulation on Fines, fines are calculated by first determining the base fine, which in the case of non-cartel behaviour ranges between 0.5 per cent and 3 per cent of the company’s turnover in the financial year preceding the date of the decision to impose a fine. If this is not calculable, the turnover for the financial year nearest to the date of the decision is to be considered in calculation. Aggravating and mitigating factors are then factored into the calculation of monetary fines within the scope of the Regulation on Fines. 

    In addition to the monetary sanction, the Board is authorised to take all necessary measures to terminate the restrictive agreement, to remove all de facto and legal consequences of every action that has been taken unlawfully and to take all other necessary measures in order to restore the level of competition and status as before the infringement. Furthermore, such a restrictive agreement shall be deemed legally invalid and unenforceable with all its legal consequences. Similarly, the Competition Law authorises the Board to take interim measures until the final resolution on the matter in case there is a possibility of serious and irreparable damages.

  25. 13.

    Describe any recent cases in the area of information exchange of note in your jurisdiction and how they were decided.

  26. There were a few exchanges of information cases in the year in review:

    Banks Association’s Risk Centre decision (20 April 2016, 16-14/217-94): The Competition Board granted negative clearance to the Turkish Banks Association’s Risk Centre on the exchange of information on business partners. Parameters to be disclosed comprise of turnover information of the business partner, the number of the banks that source the turnover information and the identification number of the business partner. The information would be circulated among member banks via an online platform. The Board resolved that the proposed scheme would not cause any competition law concerns since it focuses on the exchange of credit risk information of clients.

    Aegean Cement Producers decision (14 January 2016, 16-02/44-14): The Board concluded that six cement companies operating in the Aegean region of Turkey violated article 4 of Law No. 4054 by allocating regions and increasing resale prices in collusion in the Aegean region. The Board fined the cement producers a total of approximately 71 million Turkish lira. The fines ranged between 3 per cent and 4.5 per cent of each company’s 2014 annual income. The fines are considered to be relatively high in the Turkish jurisdiction in terms of turnover percentage. The decision has been criticised in that no information or evidence was collected during the investigation in addition to the information and documents collected during the pre-investigation phase to link the defendants to the allegations. Exchange of information has been an important part of the dispute as the Competition Authority argued that information exchange facilitated collusion in the oligopolistic and exceedingly stable market.  

    EBS Automotive decision (30 March 2016, 16-12/194-88): The Competition Board granted negative clearance to EBS Automotive’s initiative to share new and second-hand vehicle sales data with the market and third parties through its website. The Board emphasised in its decision that the data to be shared is already open to public via easily accessible public records. It rested its analysis on the fact that the initiative would only be presenting publicly available data in a leaner and more accessible manner.

  27. 14.

    Are there any proposals to reform the rules governing information exchange in your jurisdiction?

  28. The most significant development regarding Turkish competition law is the draft proposal for the amendment of the Law No. 4054 (the Draft Law). It was submitted to the Grand National Assembly of Turkish Republic on 23 January 2014. In 2015, the Draft Law became obsolete after the general elections in June 2015. As reported in the 2015 Annual Report of the Competition Authority, the Competition Authority has requested the re-initiation of the legislative procedure concerning the Draft Law. However, the Draft Law does not have any provisions at this time that would drastically change the playing field with regards to exchange of information. 

  29. 15.

    Are there any other noteworthy characteristics or practical examples specific to your jurisdiction?

  30. Development of competition law in the Turkish jurisdiction closely follows the advances in the EU while adding its own connotations to match the circumstances of the Turkish market. Turkish Competition Authority is a very active and innovative competition authority. 

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Questions

  1. 1.

    Describe the principal competition rules governing information exchange in your jurisdiction.


  2. 2.

    Which bodies are responsible for enforcing competition rules on information exchange in your jurisdiction?


  3. 3.

    Describe the types of information exchanges that may be caught under the competition rules in your jurisdiction.


  4. 4.

    Are some information exchanges regarded as more serious breaches of the competition rules than others?


  5. 5.

    To what extent is it necessary for an information exchange to have a negative effect on competition to prove a competition infringement in your jurisdiction?


  6. 6.

    What types of information exchanges are not caught by the competition laws in your jurisdiction? For example, are certain types of information exchanges viewed as pro-competitive?


  7. 7.

    To what extent can public information be caught under the competition rules governing information exchange in your jurisdiction?


  8. 8.

    Are there any specific competition rules in place for certain types of information exchange or certain sectors?


  9. 9.

    Have public bodies in your jurisdiction published any guidance on the competition rules governing information exchange?


  10. 10.

    What defences are available for information exchanges caught by the competition laws in your jurisdiction. 


  11. 11.

    What is the standard of proof and on whom does the burden of proof fall in information exchange cases? Are there any scenarios in which the burden of proof is or could be reversed?


  12. 12.

    What are the sanctions for anticompetitive information exchanges in your jurisdiction?


  13. 13.

    Describe any recent cases in the area of information exchange of note in your jurisdiction and how they were decided.


  14. 14.

    Are there any proposals to reform the rules governing information exchange in your jurisdiction?


  15. 15.

    Are there any other noteworthy characteristics or practical examples specific to your jurisdiction?