The Ankara Regional Administrative Court's 8th Administrative Chamber ("Regional Court") annulled the decision of the 13th Administrative Court of Ankara ("Administrative Court"),1 where the Administrative Court had dismissed a lawsuit against the Board's Duru decision,2 due to a lack of legal standing on the part of the plaintiff (i.e., a citizen filing a lawsuit in his capacity as a consumer).3
The Board had rendered its Duru decision following an ex officio preliminary investigation, which had been initiated due to the allegations that Duru Bulgur Gida Sanayi ve Ticaret A.Ş. ("Duru") had violated Article 4 of the Law No. 4054 by way of intervening in the resale prices of the retail chains, by determining their shelf prices and limiting their discount rates.
While it was found that Duru had interfered with the retailers' shelf prices based on the documents seized during the on-site inspection, which mainly consist of the communications between Duru and the retailers, the Board unanimously decided not to launch a full-fledged investigation against Duru by taking into consideration the following factors: (i) intra-brand competition in the market, (ii) competitive pressure in the retail market from discount stores and retailer chains, (iii) Duru's low market share in the grains and legumes market, (iv) low concentration level in the market, (v) the fact that retailers often priced their products below the recommended prices, and (vi) lack of evidence regarding any enforcement or monitoring mechanism for the implementation of the recommended prices set by Duru. Having said that, the Board also issued an opinion letter stating that Duru should terminate its practices that could be considered as resale price maintenance, such as determining shelf prices and discount rates or fixing resale prices by any other means.
Subsequent to the Board's Duru decision, the plaintiff filed for an annulment lawsuit against the Board. The Administrative Court, through its interim decision, requested explanations about the plaintiff's legal standing within the scope of the Board's relevant decision, along with any information and documents that may prove his legal interest and benefit in this case.
The plaintiff contended in his reply petition that his interest as a consumer of Duru products had been violated by Duru's actions, which were intended to increase consumer prices in various cities in Turkey, including Ankara, where the plaintiff resided.
The Administrative Court examined whether a citizen, merely by being a consumer, could have legal standing as a plaintiff in an administrative lawsuit for the judicial review of a Board decision. The Administrative Court stated that, although a Board decision is an administrative action which has an outweighing public nature, the plaintiff should nevertheless have a legitimate, personal, actual and concrete interest in the relevant administrative action to be able to file a lawsuit; otherwise, every citizen would be able to file a lawsuit regarding any matter that is considered in the interest of the public. With this understanding, the Administrative Court ruled that the plaintiff lacked legal standing to file a lawsuit against the Board's decision, and dismissed the lawsuit pursuant to Article 15/1-b of the Law No. 2577 on Administrative Adjudication Procedures.4
The plaintiff appealed the Administrative Court's decision before the Regional Court. The Regional Court indicated that the dispute had arisen from the determination of the retail prices of the products that were released directly to the market for consumers, by notifying the retailers about the sales prices or discount rates which were intended to determine the sales prices by way of preventing resale prices from being set within the market conditions on their own terms. In this regard, the Regional Court highlighted the Board's decision to issue an opinion letter to Duru stating that the company should terminate its practices that could be considered as resale price maintenance based upon the evaluation of the correspondence and meetings between the parties and the documents collected in evidence within the scope of the preliminary investigation. To that end, the Regional Court assessed that, even though the Board had decided not to launch a full- fledged investigation against Duru, the Board's decision to issue such an opinion letter established the existence of practices that could amount to resale price maintenance.
Therefore, the Regional Court concluded that the Board's decision not to launch a full- fledged investigation following the preliminary investigation could be subject to a lawsuit brought by the consumers whose interests had been affected. It is evident from the Regional Court's decision that consumers who buy Duru products do, in fact, have legal standing to bring legal action, considering the effects of resale price maintenance by Duru regarding the prices of dry food products in light of the relevant competition law principles. In this respect, the Regional Court decided to grant the plaintiffs request of appeal and rescinded the Administrative Court's decision.
This article was first published in Legal Insights Quarterly by ELIG Gürkaynak Attorneys-at-Law in March 2020. A link to the full Legal Insight Quarterly may be found here
1 The 13th Administrative Court of Ankara's decision dated December 20,2018, and numbered E:2018/1875 K:2018/2595.
2 The Board's decision dated March 8, 2018, and numbered 18-07/112-59, see "A Closer Look at Resale Price Maintenance and Restrictions on Internet Sales: The JOTUN and Duru Cases," ELIG Gürkaynak Attorneys at Law, Legal Insights Quarterly September 2018 - November 2018, p. 6-9.
3 The Ankara Regional Administrative Court's 8th Administrative Chamber's decision dated November 20, 2019, and numbered E: 2019/1829, K: 2019/2624.
4 The 13th Administrative Court of Ankara's decision dated December 20,2018, and numbered E:2018/1875, K:2018/2595.
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