On September 22, the Authority disclosed its reasoned decision on its website regarding the preliminary inquiry initiated against entities engaged in the production and wholesale of ophthalmic lenses, investigating potential violations of Article 4 of Law No. 4054 through price fixing activities. Following a thorough examination, the Board decided to close the case without initiating a full-fledged investigation, pursuant to Article 41 of Law No. 4054, citing an absence of unequivocal evidence pertaining to information exchange and price fixing among the investigated entities.
Investigation Scope and Phases
The TCA received a complaint on 4 May 2021, accusing EssilorLuxxotica S. A ("EssiLux") of infringing Article 4 (which prohibits cartels and other agreements that could disrupt competition) and Article 6 (which prohibits abuse of dominance) of Law No. 4054 through exclusionary and complicating conduct towards competitors. Consequently, a preliminary investigation commenced on 15 June 2021 against EssiLux, Beta Optik Sanayi ve Ticaret Ltd. Şti. ("Beta"), Hoya Turkey Optik Lens Sanayi ve Ticaret Anonim Şirketi ve Seiko Optical Europe GmbH Merkezi Almanya İstanbul Merkez Şubesi ("Hoya"), Cemfa Optik San. ve Tic. AŞ, Gelişim Optik AŞ ("Gelişim Optik"), Merve Gözlük Camı San. ve Tic. AŞ, Opak Lens San. ve Tic. AŞ ("Opak Lens"), and the Turkish Eyewear Manufacturers Association to explore potential anti-competitive information exchange and price fixing engagements in the ophthalmic lens production and wholesale markets. The TCA determined that a full-fledged investigation was unwarranted for the said entities, except possibly for Opak Lens and Gelişim Optik, who might have partaken in customer sharing and price fixing. Nevertheless, the Board exonerated all entities, citing insufficient evidence of price fixing or anti-competitive information exchange.
The Board's Evaluation
The Board observed attempts by ophthalmic lens manufacturers/wholesalers to acquire sensitive competitor information, typically via their customers, yet deduced that such endeavours aimed at devising competitive pricing strategies and fostering competitive trading conditions against competitors. The Board scrutinized price alterations by market players from 2016 to 2022 to ascertain any price or quantity fixing agreements, revealing that price changes predominantly occurred at disparate times, barring Beta and Opak Lens, and Merve Optik and Altra Optik Sanayi ve Ticaret A.Ş. (an EssiLux subsidiary, "Altra") - each having a single overlapping date within the pertinent time span. The Board opined that a solitary overlapping date amidst numerous other price alterations does not substantiate an agreement between the implicated entities. For Merve Optik and Altra, the Board attributed the coinciding date for price change (i.e., November 2021) to abrupt exchange rate hikes during the month, thereby disassociating the price updates from any agreement between the entities. The Board decided that price alterations largely signified competitive undertakings, devoid of concerted practices. This conclusion drew reference to a prior precedent1, underscoring that similar timing and rates of price increases do not inherently denote a concerted practice, and competitors monitoring each other's pricing activities is a commonplace commercial phenomenon, which doesn't invariably dictate their pricing strategies. Based on the on-site inspection documents and case facts, the Board discerned no explicit indicators of an anti-competitive agreement nor evidence of detailed, consistent, and systematic sharing of competitively sensitive information among the investigated entities.
Remarks
The decision reveals that information exchanges in the ophthalmic lens production and wholesale markets neither aimed nor resulted in competition restriction, rather they bolstered competition within the relevant markets. The decision underscores the requisite standard of proof for price fixing arrangements, dismissing speculative conclusions bereft of solid evidence. It bears significance as it amplifies the Board's demand for the TCA to substantiate its investigative conclusions on price-fixing agreements and anti-competitive information exchanges through price/market analysis of the alleged market conducts, particularly when only internal correspondences hint at such wrongdoings, which do not inherently prove agreement existence – thus necessitating a certain level of standard of proof.
Footnote
1. The Board's Particle Board decision dated 23.11.2017 and numbered 17-38/609-265.
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