7 May 2020 - In April, the Turkish Competition Authority ("TCA") continued to issue decisions, receive online filings and submissions, and initiate preliminary investigations despite working from home. It can be said that it is nearly business as usual. The only exceptions are the final decisions regarding on-going investigations, as they require an oral hearing and there is no online oral hearing system in place, at least not at present.
It currently appears that the impact of global economic recession has not yet had a severe impact on the number of merger control decisions issued by the TCA (see graph). Moreover, in April, the TCA decided on 14 new merger control filings. (The monthly average for 2019 was 17 decisions).
In addition, after a series of harsh statements in its press releases on price gauging, the TCA offered its first "carrot" to undertakings after the COVID-19 outbreak. On 17 April, the TCA announced on its website that it would approve all extension requests for the submission of written defences, as the internal coordination of undertakings that are being scrutinised may suffer during the coronavirus crisis.
A new economic regulator: Unfair Price Assessment Board
As a measure against price gauging practices observed in the early days of the COVID-19 outbreak, the Unfair Price Assessment Board ('UPAB') has been established by an amendment to Law No. 6585 on the Regulation of Retail Trade. UPAB will monitor all undertakings that operate at the retail level for possible excessive pricing activities that may cause a scarcity of goods in the market, distort market balance and free competition, or prevent consumers from accessing goods. This new watchdog appears to be the Turkish government's shortcut response to the legal and economic literature revolving around excessive pricing in competition law, as competition law procedures take a great deal of time and effort.
UPAD can impose an administrative fine from TRL 10,000 (USD 1,400) up to TRL 500,000 (USD 70,000) 1. UPAB is a completely different authority from and has a different scope than the TCA, and thus the same actions can be investigated under both competition law and by the UPAB. It is unclear whether UPAB will use the tools borrowed from competition law, such as the economic value test. The scope of the assessment that will be conducted by UPAB is expected to become clear after the secondary legislation is prepared and UPAB starts to operate.
Spotlight - End of ABI/SABMiller's Corona Saga?
The Turkish beer market has been historically characterised as a quasi-duopoly, with Efes Pilsen and Turk Tuborg being the largest breweries. Since 2012, Efes Pilsen has been jointly controlled by SABMiller and its local shareholders. When Anheuser-Busch InBev ('ABI') filed for the acquisition of SABMilller in 2016, the Turkish filing was investigated under a Phase-II analysis by the TCA after Turk Tuborg filed a complaint against the deal. The main assertion of Turk Tuborg, among others, was that it will lose the distribution licence of SABMiller's Corona, Hoegaarden and Leffe brands after the realisation of the deal, as ABI would likely to start distributing them through Efes Pilsen, its arch rival, after the acquisition of SABMiller and its shares in Efes Pilsen.
Interestingly, the ABI/SABMiller deal was granted a green light by the TCA after the Phase-II analysis without any commitments, even if ABI committed not to grant any distribution rights to Efes Pilsen regarding the Corona, Hoegaarden and Leffe brands for approximately two years. The TCA's approval decision was brought before the court by Turk Tuborg, and the Ankara Administrative Court (which is the court of first instance) annulled the decision of the TCA on the basis of a lack of in-depth assessment in 2018. This ruling forced the TCA to re-open a Phase-II investigation regarding the ABI/SABMiller transaction.
While the TCA's new Phase-II investigation continued, so too did the judicial proceedings, as ABI appealed the Ankara Court's annulment decision. In December 2019 the Ankara District Administrative Court annulled the decision of the court of first instance, leaving the Phase-II proceeding before the TCA groundless. As a result, on 12 March 2020, the TCA closed its on-going Phase-II proceedings against ABI/SABMiller, which means that the transaction is once again approved without any commitments and that it may be the end of road for the deal in Turkey. However, court proceedings are still on-going, as the case was brought before the Council of State, which is the highest administrative court in Turkey. If the Council of State sides with the Ankara Administrative Court by annulling the district court's decision, the beer saga may continue.
The TCA approved the following merger control filings in April at the Phase I stage:
- Acquisition of joint control of Engineering Igneria Informatica S.P.A by Bain Capital Investors L.L.C. and Neuberger Berman L.L.C.
- Acquisition of joint control of Akdeniz Pe-tur Turizm Seyahat Acentasi ve Ticaret A.S. by AERTICKET International Conso Holding GmbH via AER Picasso Holdings LLC.
- Establishment of a joint venture between J.M. Voith SE & Co. KG and MOOG Gesellschaft mit Beschrankter Haftung.
- Acquisition of sole control of South32 SA Coal Holding Proprietary Limited by Seriti Resources Holdings Proprietary Limited via Thabong Coal Proprietary Limited.
- Acquisition of the sole control of Özen Kisisel Bakim Ürünleri Üretim A.S. by Daio Paper Corporation.
- Establishment of joint control of PolygenX 2 SAS and its subsidiaries by ArchiMed SAS and Warburg Pincus LLC as a result of acquisition of these undertakings by Pinot Acquisitions Limited.
- Acquisition of sole control of Stemcor Global Holding Limited by Prosperity Kingsfield Limited, a subsidiary of Cedar Holdings Group Co. Ltd.
- Acquisition of the various tangible and intangible assets and operations of Stoll Grubu and shares of the group companies Stoll Ameraica Kinitting Machinery Inc., Stoll Italia S.r.l., Stoll India Pvt. Ltd., and Stoll Bangl. Ltd. by Mayer Grubu.
- Acquisition of the sole control of Luxi Chemical Group Co., Ltd. by Sinochem Investment Development Co., Ltd. via Sinochem Investment (Liaocheng) Co., Ltd.
- Acquisition of joint control of Reliance BP Mobility Limited, solely controlled by Reliance Industries Limited, by BP plc. via BP Global Investments Limited.
- Acquisition of joint control of Thyssenkrupp Elevator AG by funds managed by the affiliates of Advent International Corporation and funds managing by Cinven Capital Management (VIII) General Partner Limited.
- Acquisition of mineral activities of Metso Oyj by Outotec Oyj.
- Acquisition of sole control of Ingenico Group S.A. by Worldline S.A.
- Acquisition of sole control of the branch of Güç Çözümleri of Johnson Controls International plc by Brookfield Asset Management Inc.
1. USD figures are approximate and calculated based on the exchange rates on 05.05.2020.
Article originally published on 7 May 2020.The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.