Turkey: Emphasis On "Awareness" And "Consent" In Information Exchange: The Board Found That The Unilateral Information Exchange Of An Employee Of Arçelik Does Not Violate Article 4 Of Law No. 4054

The Authority recently published the Board's decision¹ concerning the full-fledged investigation conducted against Arçelik Pazarlama A.S. ("Arçelik") and Vestel Ticaret A.S. ("Vestel"), in order to determine whether the relevant undertakings have violated Article 4 of Law No. 4054 through an exchange of competitively sensitive information.

The decision is noteworthy given that, after evaluating the case file, the Board concluded that since Arçelik was genuinely not aware of any anti-competitive conduct of its employee and the employee shared information without Arçelik's knowledge or consent, there would not be an agreement or concerted practice between Arçelik and Vestel and therefore the conducts of Arçelik's employee subject to the exchange of information would not violate Article 4 of Law No. 4054.

Pursuant to Article 4 of Regulation on Active Cooperation for Detecting Cartels ("Leniency Regulation"), through its request of immunity from fines ("Leniency Application") dated August 27, 2020, Arçelik alleged that Arçelik and Vestel have violated Article 4 of Law No. 4054 by exchanging competitively sensitive information.

Within the scope of its Leniency Application, Arçelik pointed out that it has been putting an effort into compliance with competition law legislation for a long time and with the implementation of management responsible for compliance in 2014, efforts and training in that front have accelerated. Arçelik's efforts included (i) providing "Ethical Conduct Rules and Application Principles" booklets which set out liability to comply with competition law legislation and "Competition Law Guide" which was provided to Arçelik employees in return to their signatures, (ii) e-mail messages from senior management emphasizing the importance of complying with competition law legislation, sent at least on annual basis, and (iii) providing competition law training to the employees in critical positions. Apart from Arçelik's above-mentioned efforts towards complying with competition law, it was also stated that, pursuant to its internal policy, Arçelik does not attend to meetings of undertaking associations without the attendance of an external legal counsel and e-mail messages of certain senior managers have been periodically examined by way of conducting periodic audits within the scope of Arçelik's competition compliance program.

During the periodic audit conducted in February 2017, an exchange of competitively sensitive information towards Vestel was detected. Consequently, Arçelik decided to conduct a more comprehensive internal review. In light of the information obtained from the correspondences examined within this internal review, Arçelik determined that the company was damaged through its employee's information exchange towards Vestel and requested immunity from fines pursuant to Article 4 of the Leniency Regulation within its Leniency Application submitted to the Authority.

Within the scope of its assessment, in order to detect any exchange of competitively sensitive information, the Board conducted on-site inspections in Arçelik and Vestel premises during the investigation period, mainly by way of collecting information and documents including but limited to competitor retail sales data, competitor turnover data, current/oncoming price increase rates, special sales applications and current/oncoming campaigns, etc.

While assessing the information obtained through the Leniency Application and data gathered during the on-site inspections, the Board stated that the nature of the information exchanged is of vital importance for the analysis regarding the legality of the conduct in question. The Guidelines on Horizontal Cooperation Agreements ("Horizontal Guidelines"), which qualifies as the main guide on information exchange assessment, sets out that, for information exchange to have restrictive effects on competition within the meaning of Article 4 of Law No. 4054, it must be of a nature to decrease the uncertainty, increase the transparency and ease the corporation in the relevant product market -which was left open since the Board found it ineffective to define a specific product market for the purpose of the relevant case.

Furthermore, the Board pointed out that Article 4 of Law No. 4054 prohibits agreements and concerted practices between undertakings which have as their object or effect or likely effect the prevention, distortion or restriction of competition. Thus, independent and single-sided actions of an undertaking do not fall within the scope of Article 4 of Law No. 4054. However, it has also indicated that the mere fact that Arçelik's information was unilaterally shared does not mean that there cannot be any concerted practices between the undertakings since Vestel did not explicitly reject the information flow.

That being said, as a result of its detailed assessment on the case and the markets that the undertakings are active in, the Board found that (i) Arçelik was not aware of such information exchange, therefore, (ii) it was not in a position to make its strategic calls based on the information conveyed to Vestel and/or Vestel's strategic behaviour further to the receipt of that information and (iii) the market data did not project any sign or indication of concerted practices between the two undertakings.

Therefore, the Board found that there were no grounds to accept the existence of an anti-competitive agreement or concerted practice between the two companies. It ultimately decided with majority that the information exchanged by the Arçelik employee was against the interest of Arçelik and Arçelik was neither aware of nor had consent for the relevant information exchange; thus the conducts of a single employee within the scope of information exchange would not violate Article 4 of Law No. 4054.

Finally, according to the dissenting opinion of one of the Board members, Arçelik and Vestel did violate Article 4 of Law No. 4054 and thus an administrative monetary fine should have imposed considering that the Board itself determined that unilateral information sharing can also amount to a violation, if the counterparty who received the competitively sensitive information does not explicitly reject the shared information.

This article was first published in Legal Insights Quarterly by ELIG Gürkaynak Attorneys-at-Law in September 2020. A link to the full Legal Insight Quarterly may be found here

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