Enforcement and judicial review are the most important elements for a healthy system of checks and balances. This is particularly important for interdisciplinary practice areas such as competition law. When we assess the Turkish competition law practice from this perspective, we see that the enforcement side had a rapid development ever since it hit the ground running in 1997. However, we also see that the practice of judicial review has not matured up as efficiently as the enforcement side.

Turkish Competition Act provides a three-stage judicial review system for the decisions of the Turkish Competition Authority (“TCA”); (i) Administrative Court of First Instance, (ii) Regional Administrative Court and (iii) The High Council of State. Parties may initiate the judicial review procedure by filing a cancellation lawsuit. That said, decisions of the TCA are rarely cancelled as a result of the judicial review and the number of cases won before the courts are extremely low. Unlike the TCA decisions, the court rulings in such lawsuits lack reasoning and explanations on the rationale of the verdict. In the absence of any antitrust-specialized courts, the rulings of administrative courts refrain from providing detailed assessments and only restate the legislation. Aware of the significant need for development in this area, our Competition Law Team has been investing their time and effort into raising awareness on critical issues such as the standard of proof, the right to be heard or the right to defense concerning judicial review of the TCA decisions.

After years of advocacy and thought leadership on these issues, our efforts have finally given its due and our team has secured a landmark decision vis-à-vis the High Council of State’s 13th Chamber. In 2018, the TCA imposed a hefty fine on Henkel Turkey for the alleged resale price maintenance (“RPM”) practices. Stepping in to represent the client in a years’ long high profile cancellation lawsuit, our team managed to win this seemingly unwinnable case. In a complex pattern of interoperable arguments, our Team laid down the theoretical background of the relevant violation and challenged the fining decision based on the principles of administrative law as well as the law & economics discipline. The case team featured Partner Şahin Ardıyok, the head of competition practice, and Associate Armanç Canbeyli, supported by administrative law expertise and enforcement experience of seasoned Of-Counsels Reşit Gürpınar and Sertaç Serter.

In its decision, the 13th Chamber has challenged the status quo and delved into a detailed assessment on how to evaluate RPM practices, standard of proof, legal and economic factors to be considered along with a practical guidance on how to implement the stipulations laid in down the secondary legislation. Recognizing the “pressure” or “incentive” by the supplier as key factors for establishing an RPM practice, the 13th Chamber stated that the TCA has not set forth any actual interference with the resale prices of the retailers. On the contrary, the court highlighted that the TCA has interviewed 20+ retailers on whether they have been subject to any sort of RPM by the supplier. In response, all of the retailers provided that Henkel had no interference with the resale prices and the court reasoned that findings in the case file only reflected the supplier’s general remarks on resale of its products. Accordingly, the 13th Chamber provided that the TCA should have assessed whether the individual findings obtained during the investigation are sufficient to demonstrate a structural infringement and cancelled the fining decision due to lack of clear and concrete resolution on the infringement. Further details on the 13th Chamber’s decision may be obtained from our Blog by clicking here or from the round table discussions by clicking here.

The reflection of our arguments in the High Council of State’s decision has changed the RPM related precedent in our jurisdiction and set the bar for the TCA to establish this sort of infringement. Rendered by the highest administrative judicial authority in our jurisdiction, the ground-breaking results achieved by our team in this case will help to shape the competition law practice. We take pride in contributing to the development of judicial review in Turkey through this revolutionizing precedent. Demonstrating our deeply rooted competition and administrative law practices, this historic result is a testament that where everyone else see impossible, we see potential!

About Balcıoğlu Selçuk Ardıyok Keki

Balcıoğlu Selçuk Ardıyok Keki Attorney Partnership is an Istanbul-based full service law firm with a team of 130+ lawyers and economists. Our practice focuses on a wide range of areas including real estate, corporate, mergers and acquisitions, banking, project finance, capital markets, competition and anti-trust, employment, litigation and arbitration, telecommunication, regulatory and public law and intellectual property. We represent and advise Turkish and multinational clients, including Fortune 500 companies, in the banking and finance, private equity, real estate, manufacturing, hospitality and leisure, retail, automotive, energy, information technology, life sciences, luxury fashion and beauty, and media sectors.