TCA Fined Steel Straps Producers

According to the press release published today, Turkish Competition Authority (the TCA) imposed fines on two undertakings for bid-rigging, price-fixing, and information sharing on steel straps market. Although the details of the case has not been publicized yet, some prominent features of the decision, basing on the press release (in Turkish) and prenouncement (in Turkish), can be summarized as follows.

Firstly, it is inferred that the TCA regarded the above-mentioned practices as a cartel. This is an important issue in Turkish competition law in that the starting rate of the fine is determined higher for the cartels pursuant to the Fining Regulation. Furthermore, there is a lively debate on this issue since the TCA does not characterize some explicit cartel conduct as a “cartel”.

Secondly, the TCA did not apply any aggravating factors in this case as well. It is quite normal not to increase the fine where there is no aggravating factor. However the TCA has increased the fine in only 3 cases out of 29 decisions adopted after the promulgation of the Fining Regulation in 2009. Hence, it appears to be a regular practice of the TCA that it increases the fine very rarely due to aggravating factors.

Thirdly, fines reduced because of the mitigating factors. However there is no indication about what these factors and discount rates are. This practice, namely not providing adequate information as to the process in which the fines are determined, is criticized by the Council of State, the Supreme Administrative Court which reviews the decisions of the TCA, and by stake-holders.

Fourthly, leniency application of one undertaking was accepted and the fine reduced by 50 %. This is the fourth occasion in which the TCA reduced the fine due to leniency.

Last but not least, the TCA rejected the argument for the imposition of fines on directors. Although the TCA imposed fines on directors of undertakings in two previous cases regarding poultry industry and sodium sulfate market, this is the fifth occasion in which this argument is rejected.

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