I. Introduction

The Turkish Competition Board's ("Board") and the High State Court's two very recent decisions carry great importance regarding the interpretation and application of the ne bis in idem principle under the Turkish competition law regime.

These new decisions have bolstered the High State Court's earlier approaches, where the ne bis in idem principle was applied to administrative sanctions, e.g., disciplinary sanctions.1 Indeed, before these new decisions, the High State Court had stated that "The global 'ne bis in idem' principle is a principle that should also be applied to disciplinary law."2 With these new decisions, the Board and the High State Court did not only adopt a consistent approach for the implementation of the principle of ne bis in idem in cases concerning administrative sanctions, but also confirmed and paved the way for the implementation of this generally accepted legal principle in competition law cases.

Although the internationally accepted ne bis in idem principle first originated in criminal law, it is also pertinent to Turkish competition law.3 This principle, by definition, provides that multiple lawsuits cannot be initiated, multiple judgments cannot be rendered, or multiple jeopardies cannot be imposed against the same person due to the same act. The principle applies to administrative sanctions that have the characteristics of criminal penalties,4 and thus, to administrative monetary fines imposed by the Board, since they qualify as administrative sanctions of such nature.

II. The Board's Non-Fining Decision in Raki Market5

In September 2011, the Turkish Competition Authority ("Authority") initiated a preliminary investigation against Mey Içki, a subsidiary of Diageo plc. in order to determine whether it had violated Article 6 of Law No. 4054 on Protection of Competition ("Law No.4054") in the Turkish market for raki (traditional Turkish spirit). In November 2011, the Board found that there is no need for a full-fledged investigation. At this point, however, one competitor active in the same relevant product market initiated an appeal process against the Board's no-go decision. After a lengthy process, the High State Court decided to annul the Board's no-go decision, by a majority of votes in November 2018.

In May 2019, the Board initiated an investigation against Mey Içki in order to comply with High State Court's reversal decision. The investigation aimed at exploring the validity of allegations of abuse of dominance in the Turkish raki market.

Following the investigation, the Board found with unanimous vote that (i) Mey Içki holds a dominant position in the raki market, (ii) Mey Içki has violated Article 6 of Law No. 4054, and (iii) Mey Icki has been subjected to an administrative monetary fine for the consequences of the same strategy in the raki market for the same period (2008-2011)6 and that there is no room for further administrative monetary fine imposition, through its decision of March 11, 2021.

While the reasoned decision is not yet available, the Board acknowledged that the ne bis in idem principle should be applied. Therefore, the decision is a candidate to set a landmark precedent in terms of the interpretation of the ne bis in idem principle under Turkish competition law regime. The reasoned decision, which is expected to be published in the following months, is likely to provide insight on the direction the Turkish competition enforcement will be heading to in the coming years concerning the approach on the ne bis in idem principle.

III. The High State Court's Decisions Upholding the Board's Non-Fining Decision in Vodka and Gin Markets7

In April 2016, the Board launched an investigation against Mey Içki aiming to explore the validity of the allegations regarding Mey Içki`s abuse of dominance in the Turkish markets for vodka and gin.

After eighteen months of investigation, the Board found that (i) Mey Içki holds a dominant position in vodka and gin markets, (ii) Mey Içki has violated Article 6 of Law No. 4054 in the vodka and gin markets, and (iii) as Mey Içki has already received an administrative monetary fine for the consequences of the same strategy in the raki (traditional Turkish spirit) market,8 there is no room for another administrative monetary fine through its decision of October 25, 2017 ("Non-Fining Vodka and Gin Decision").9

Thus, the Board acknowledged once again that ne bis in idem principle should be taken into account in competition law cases. The decision was set to become a landmark precedent regarding the interpretation and application of the ne bis in idem principle under the Turkish competition law regime.

At that point, however, two competitors active in the same relevant product markets for vodka and gin initiated two separate appeals against the Board's Non-Fining Vodka and Gin Decision. Both lawsuits were dismissed as the first instance courts found that the non-fining part of the decision was lawful. Nevertheless, following these judgments, this time these competitors submitted their appeals to the regional administrative courts.

The regional administrative courts accepted the appeals of the plaintiffs, overturned the judgments of the first instance courts and annulled the Board's Non-Fining Vodka and Gin Decision. The regional administrative court noted that the vodka and gin markets are distinct from the raki market and then went on to state that a violation that occurred in the vodka and gin markets should also be subject to a sanction. In this respect, the Non-Fining Vodka and Gin Decision was found to be unlawful "considering that it is possible to calculate the administrative monetary fine to be imposed, as a percentage of the annual gross revenue, set within the prescribed rate scale."10 

Upon these decisions of the regional administrative court, this time, it was the Authority that initiated an appeal process before the High State Court. Eventually, the High State Court, which is the highest plenary judicial body for administrative cases, accepted the arguments on the necessity to apply the principle of ne bis in idem. The High State Court very recently reversed the regional administrative court's decisions, and accordingly, the non-fining part of the Board's Non-Fining Vodka and Gin Decision regained its validity. All in all, the administrative procedure before the courts against the Board`s Non-Fining Vodka and Gin Decision was accurately concluded in favor of the implementation of the principle of ne bis in idem in competition law.

The High State Court stated that the violations committed by undertakings with the same conduct within the scope of the execution of a single commercial policy, regardless of the markets involved, are not independent in terms of "the market, nature and chronological period" (emphasis added). They should therefore be evaluated as a single action and should not be penalized more than once.

Accordingly, the High State Court pointed out that the conducts that were found to constitute a violation in the vodka and gin markets (i) were the same as the conducts that were considered to constitute a violation in the raki decision of 2017 and subjected to administrative fines, (ii) took place in the same period and (iii) were part of the whole general strategy of the undertaking. It therefore decided that (i) the Board`s Non-Fining Vodka and Gin Decision had been lawful and (ii) the regional administrative court decisions were devoid of legal accuracy.

By reversing the decisions of the regional administrative courts, the High State Court once again ensured that ne bis in idem principle would be consistently applied in Turkish competition law and emphasized that the Board should not render duplicate sanctions against the same undertakings for the same alleged conduct taking place at the same time period.

This article was first published in Legal Insights Quarterly by ELIG Gürkaynak Attorneys-at-Law in June 2021. A link to the full Legal Insight Quarterly may be found here

 Footnotes

1 See for example, the decision of the 5th Chamber of High State Court (4.1.2018; 2016/20351 K. 2018/619).

2 Ibid. For a parallel approach, see the decision of the 12th Chamber of the High State Court (12.10.2017; E. 2017/599 K. 2017/4803).

3 Karabel, Gözde. Rekabet Hukukunda Ne Bis In Idem Ilkesi (Ne Bis In Idem Principle in Competition Law), 2015, Ankara s. 4. See: https://www.rekabet.gov.tr/Dosya/uzmanlik-tezleri/142-pdf#:~:text=Ne%20bis%20in%20idem%20ilkesi%2C%20ayn%
C4%B1%20fiilden%20dolay%C4%B1%20ayn%C4%B1%20ki%C5%9Fi,veya%20ceza%20verilmemesini%20ifade%20etmektedir.(last accessed: April 15, 2021) 

 4 Ibid.

5 The Board's decision dated March 11, 2021 and numbered 21-13/173-74.

6. The Board's decision dated June 12, 2014 and numbered 14-21/410-178.

7. The Decisions of the 13th Chamber of High State Court ((02.12.2020, E:2020/1941 K:2020/3508) and (02.12.2020, E:2020/1939 K:2020/3507)).

8.The Board's decision dated February 16, 2017 and numbered 17-07/84-34.

9. The Board's decision dated October 25, 2017 and numbered 17-34/537-228.

10. See Article 16(3) of the Law No. 4054: "To those who commit behavior prohibited in Articles 4, 6 and 7 of this Law, an administrative fine shall be imposed up to ten percent of annual gross revenues of undertakings and associations of undertakings or members of such associations to be imposed a penalty, generated by the end of the financial year preceding the decision, or generated by the end of the financial year closest to the date of the decision if it would not be possible to calculate it and which would be determined by the Board."

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