Being lazy as an author in this blog is getting more difficult. Having delays in adding new posts, you face a pressure from our beloved co-editors. Well, I hope this post will make them smile. ;). I know they want this for the good of our readers and to keep them up to date. So do I.
You may remember my first post on the discussions about the privatization of IDO and rocket-prices afterwards. It seems that the behaviors of IDO have been examined by the TCA as it announced its reasoned decision (in Turkish) four days ago. Let’s try to focus on the highlights of this decision.
First of all, I think that it is interesting to see so many complainants including, beside a number of individuals, “Association of Consumers” and “Consumer Protection and Market Supervision Dept. of Ministry of Customs and Trade”. This might indicate that NGOs and governmental bodies become more and more aware of the practices of the TCA. Well, please do not get surprised. In Turkey, the TCA has still lack of reputation about its duties and authorities. But this may be a subject of another post.
Secondly, after the decision, we see that the TCA is now out of the game. It says, in its decision, that after analyzing the “flexible” prices, costs and profit levels, complaints were rejected and there was no need to start an investigation. In its competitive analysis, where no relevant markets were defined, it is stated that although IDO charged higher prices in its specific lines, in general, the profit levels were quite reasonable as IDO was incurring loses in some lines, while Pendik-Yalova line was a bit more profitable compared to others. And the flexible pricing system was found not exploitative since IDO, as stated in the decision, had tried to direct consumers to advantageous options and transferred the low costs created by those options to the customers via low-priced tickets.
Lastly, the ‘dissenting opinion’ of the TCA board member İsmail H. Karakelle in the reasoned decision is worth to be mentioned. Mr. Karakelle, in his dissenting opinion, refers to the TCA’s Official Opinion, which was given in the preliminary examination of the privatization of IDO before the tender. In the official opinion, the TCA expressed its competitive concerns on the block sale of IDO without any price regulation in specific lines. After emphasizing these points, Mr. Karakelle points to the need of a price regulation by the municipality or the relevant ministry.
All in all, we will see whether these episodes continue in the forthcoming days. The winter is coming!