Minor Issues-I

I believe that one of the significant issues of Turkish Competition Law is that it does not have a provision which instructs a way to deal with the relatively insignificant restrictions (depending on the size of the undertakings or the market). Pursuant to the Act, any restriction of competition regardless of concerned undertakings’ size or the market shares would fall under the scope. As any colleague of mine would agree that this deficiency creates a large amount of job burden and causes time and labor loss. Cases that involve (bread) bakeries have always been among those troubled ones in my experience along with local bus line and traditional convenience store cases. When I was reading about the bakeries decision ruled by Croatian Competition Agency (CCA), which made me smile sadly, I thought that similar problems exist in different jurisdictions as well.

Being the first fining decision since the implementation of the new act in 2010, it is considered by the CCA as a deterrent measure and public warning to other entrepreneurs and their interest associations that may infringe competition law prohibitions. According to the decision, 17 bakeries in Osijek tried to fix prices under the leadership of local Craftsmen Association and symbolically fined of 66 Euros (for bakeries that attended to meeting but have not increased prices), 200 Euros (for bakeries which raised their prices) and 6600 Euros (for Craftsmen Association). In its decision, the CCA explained the reason of symbolic fining as follows:

“…distortion of competition in this case was not significant due to the fact that the 17 bakers-craftsmen who participated in the prohibited agreement do not have significant market power in a market in which they operate, and the agreement itself has had limited geographic scope (only in Osijek-Baranja County), lasted a short period of time and, in addition, not all bakers, though undoubtedly participated in the agreement, after the meeting actually raise the price of bread.”

Reading those lines I wondered whether spending scarce resources of both time and labor on that case worth it? For the CCA, the answer is apparently affirmative since the Agency used the decision to promote and introduce the “new” act. But how would it be like if you have to deal with such relatively insignificant cases frequently?

There are two ways of relieving such a burden. First one is using a prioritization mechanism which will allow Authority to ignore minor issues and focus on the major cases. I’m aware that this could be possible within the UK and EU competition law enforcement (more on this issue will be shared by Harun soon). Second and more suitable one for the Turkish jurisdiction is to implement a truncated process for those minor (depending on the size, market share or total income of the parties) violations instead of launching a full throttle investigation process. Such a shortcut could be applied without any amendments if the Authority abdicates it’s own time limits for investigation process.

Anyhow, until a mechanism to dodge those minor issues is developed TCA experts will be visiting small enterprises for interviews and dawn raids, spending worthy time on these cases.

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