Article 6 of Law on the Protection of Competition No. 4054 ("Competition Law") prohibits the abuse by one or more companies of their dominant position in a market. It provides a non-exhaustive list of abusive behaviors, which have as their object or effect or likely effect the prevention, distortion or restriction of competition, when carried out by a dominant company. Limiting output (production/supply or technical development) is on that list of exemplary abusive behaviors.
Output restrictions, be it in the form of limiting production or in the form of fixing production quotas, reduce the available supply of a particular good or service. This reduction artificially increases demand for the product and, ultimately, leads to an increase of the price. A dominant company may choose to limit its production because the price of a product depends on the relationship between consumer demand and the availability of supplies of the product. Dominant companies may combine this abusive behavior with predatory pricing, excessive pricing or refusal to supply. These types of violation are explained in separate sub-categories.
The enforcement track record of the Turkish Competition Board ("Board") for the time being indicates no cases where the incumbent firms were fined as a result of engaging in the aforementioned abusive behaviors. Similar behavior by multiple companies has been condemned under Article 4 of Law No. 4054 as a form of cartel (White Meat Cartel, 25.11.2009; 09-57/1393-362).
The Suction Glass Tubes (02.02.2017; 17-08/100-43) might be instructive in providing an example of the criteria used by the Turkish Competition Board ("Board") while evaluating the existence of an output restriction allegation. In this decision, the Board evaluated the correspondence between Aslanlar, Solar-San and other undertakings, and found that Aslanlar and Solar-San were making proposals to other undertakings regarding the restriction of supply of suction glass tubes. However, the Board stated that the evidence was not sufficient to conclude that Aslanlar and Solar-San had entered into an agreement pertaining to the restriction of supply. Therefore, the Board proceeded to examine the market behaviour of the accused undertakings in order to determine whether an output restriction was in existence between the accused undertakings. The Board evaluated the accused undertakings' (i) established capacity; (ii) rate of capacity utilisation; (iii) current output; (iv) end product stock; (v) sales amount of the products subject to the investigation; (vi) sale price of the products; and (vii) the price-cost trend of the products subject to the investigation. Ultimately, the Board came to the conclusion that the acts of the accused undertakings could be reasonably justified, thus the Board decided that there was no need to impose an administrative fine on Aslanlar and Solar-San.
