Turkcell fined for abuse of dominance as Council of State annulled the previous decision

According to the Turkish Competition Authority’s (TCA) press release, Turkcell, the leading GSM operator in Turkey, was fined approximately TL 40 million  (USD 20 million) by the TCA although it had avoided a fine in the first decision of the preliminary inquiry–which was annulled. The decision, dated 19 December 2013, concluded that Turkcell had abused its dominant position in GSM services used in Vehicle Tracking Services (VTS) market in Turkey by “complicating its competitors’ activities by means of its exclusive practices related to vehicle tracking services….

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According to the press release, in the decision it was also stated that Turkcell should avoid similar conduct and it is expected to announce that its business partners in vehicle tracking services market and their dealers can cooperate with competing operators, there are no barriers to launch competing operators’ services and they could participate in competitors’ campaigns and they are not under any contractual or actual obligations to the contrary- in order to establish competition, in accordance with the Article 9/1* of  the Act on The Protection of Competition no 4054.

It would be interesting to recall the annulled decision (here in Turkish) of the preliminary inquiry on the same issue, dated 02 April 2008 and numbered 08-27/306-97. In this decision the Turkish Competition Board concluded that an investigation was not needed and Turkcell had not breached the Article 4 and 6 of the Act on The Protection of Competition no 4054, which are on anti-competitive agreements and abuse of dominance, respectively. The analysis of abuse of dominance in the annulled decision pointed the infant market structure of vehicle tracking systems and stated that “no evidence was found on whether Turkcell has closed the market to the competitors and excluded them, despite its high market share”. However with its judgement dated 13 February 2012, the Council of State annulled (the judgement is here in Turkish) this decision of the preliminary inquiry as the complainant and plaintiff Vodafone –the main competitor of Turkcell in Turkey- appealed.

In its judgement the Council of State pointed that the TCA had already detected that Turkcell is in a dominant position in the market and an increase in its market share is certain. Moreover, the Council also stated that the case of alleged abuse of dominance should have been analyzed in an investigation where Turkcell’s behavior of forcing its consumers to refuse to deal with Vodafone should have been taken into account as the inferior infrastructure, low market shares and alleged opportunities of the competitors were not enough to conclude, without assessing Turkcell’s influence, that the market is not closed to the competitors. And, as a result, the TCA had started the investigation on the issue, which was resulted with the above-mentioned fine.

This fine is almost half of the approximately TL 92 million fine imposed by the TCA on Turkcell, the leading mobile phone operator company (having 35 million customers in mobile market only in Turkey) which does business also in other fields of communication industry and also in different countries (like Georgia and Azerbaycan),  for a different conduct in 2011 (here is the related post) where it was decided that Turkcell had abused its dominant position by its practices directed at its distributors and dealers.

* Article 9/1 of  the Act on The Protection of Competition no 4054:  If the Board, upon informing, complaint or the request of the Ministry or on its own initiative, establishes that articles 4, 6 and 7 of this Act are infringed, it notifies the undertaking or associations of undertakings concerned of the decision encompassing those behaviour to be fulfilled or avoided so as to establish competition and maintain the situation before infringement, in accordance with the provisions mentioned in section Four of this Act.