A Comment on GSM Market

Dear Mr. Patrick Byrne had left a comment concerning Turkish Mobile Phone Market. I share his comment below. If you have an explanation or objection, please feel free to join in:

” The incredibly high level of charges for mobile phone users and for mobile data download in Turkey when compared to other countries in Europe would lead one to assume that there was no competitition in Turkey. Yet there are several mobile carriers. Perhaps one could think that Turkey is a small market for mobile phones and that the benefits of large scale delivery did not yet apply here. Yet, Turkey is one of the largest mobile phone markets in the world. In the light of this, the obvious suspicion arises that the existing carriers are involved in some kind of cartel through which they are fixing prices together and only allowing marginal competition for presentation purposes.

Perhaps there is another explanation. Anyone out there have one?”

Away (No More)

Hello everyone!

If you are regularly checking out our blog you may have noticed that we have been away for some time. That wasn’t because we are lazy but 2 out of 3 members of our team were busy with moving abroad. Yes you heard it right. Harun now resides in Ann Arbor, Michigan and Ökmen is in New York City. While Harun taking a long vacation (about 2 years) Ökmen will be studying Public Administration at Columbia University also for 2 years.

So now the burden is mine to fill these pages with posts and news. I’ll be doing my best to keep you guys updated. Keep following 🙂


GCR Awards 2013

GCR has announced finalists of the annual competition law awards. You can see and vote here for the nominees. Turkish Competition Authority is nominated for Agency of the Year (Asia-Pacific, Middle East & Africa) along with the India, Japan and Pakistan Authorities. I’m pretty sure that Turkish Authority will win this category cause as we know one of the many rules of internet is that if there is a Turkish nominee in an online voting he/she surely wins.

The hardest category to decide who to vote for me was the Academic Exellence Award. I was torn between Daniel Sokol and Damien Geradin but Mr. Geradin has won me over on our one day trip to Cappadocia last Saturday. So if he reads these lines I hope Mr. Sokol forgives me.

Banking Investigation: Grand Finalé

the-endOn Friday the March 8th the TCA has announced its long waited final decision on banking investigation: guilty as charged! Decision has set new all time high fining records due to the size of the sector and the undertakings (check out Harun’s post for details). Investigation on 12 banks (including 3 state-owned banks) had started in November 2011 and banks were alleged to had agreed to jointly set maximum deposit rates and credit card fees and charges as well as to increase loan rates between 2007 and 2011.

Being the Authority employees we have abstained from making comments on the ongoing investigation process as you know. Before seeing the reasoned decision we still have a little to say on the investigation but there are a few things to mention about.

First of all banking sector executives kept tacitly implying during the process that the “sector” must be exempted from the competition rules due to the “special circumstances” of the sector. Accordingly one of the first impacts of the decision was a press release by the Banks Association of Turkey (BAT) which says as follows:

 “…In addition, in order to avoid such a situation which is far from reflecting the realities of the industry and, therefore, is fundamentally unjust, the relevant legislation needs to be reviewed to take into account sector characteristics. For this purpose, under the supervision of the relevant institutions and organizations, it has been put on the agenda of the BAT to work on the legislative amendment proposals.”

According to the statement of the BAT, so the banks, are going to use their powers to create a competition law exemption for the sector. But why? I believe that the TCA’s investigation was built upon tangible evidence and the decision is just antitrust wise. I suppose such a statement can be interpreted as the Turkish Banking Sector’s standard operating procedure has been collusion and instead of complying with the law they want to amend it (a good example of how collusion worked back in 90’s, can be found here in Turkish).  Moreover reading bank executives statements following the decision, it is attracted my attention that they are confused about some basic competition law concepts such as object, effect and information exchange, even after having two different investigations within three years. Here is the statement of the Garanti Bank CEO for instance:

“..It is said that a number of conversations and e-mails have been identified. People who know each other, talk to each other in all sectors. This does not mean that a violation of the competition. It must be examined if we did give any instruction to branches thataway. Do we have a common interest rate applied through the all branches of the banks? No, not. So how competition are being violated?”

Another issue that caught my attention during the investigation was the wording of some lawyers during the oral hearings. I have observed watching the hearings that some attorneys chose to speak ill of the rapporteurs and the investigation report itself instead of pointing out to the weak points of the report sedately and picking a hole in it. It’s not a much wise strategy in so many ways.

Last thing I’d touch upon is the private litigation process which probably will follow the decision. Articles 56, 57 and 58 of Turkish Competition Act allows competitors and consumers to claim damages they suffer as a result of the infringement of competition, that is to say the difference between the cost they paid and the cost they would have paid if competition had not been limited. During the investigation some NGOs had announced that they would appeal to the court for compensation against the banks once the violation is detected by the TCA. Since the private litigation way has never been implemented successfully within the Turkish Jurisdiction so far and the wording of the Act is disputable, those litigation cases will illuminate the road. I personally wonder how the Judges approach this case. The biggest challenge that they may face is the calculation of the damages while another important issue is the determination of grounds for triple damages. The Act states that if the resulting damage arises from an agreement or decision of the parties, or from cases involving gross negligence of them, the judge may, upon the request of the injured, award compensation by three-fold of the material damage incurred or of the profits gained or likely to be gained by those who caused the damage.

All in all the fat lady has sung her song and the decision has taken its place as a remarkable one within the Turkish Competition Law cases and we may expect to hear more of its impacts sooner.

Meeting on Fining Regulation and Implementations

Loyal followers of this blog would easily acknowledge that we meditate upon and spend much time on the fining regulation and the implementation of the regulation by the TCA. The reason behind this obsession is a subject of a whole another post maybe an article. Anyways, when it comes to the fining regulation, I must admit that our co-author Harun Gündüz is the man who you should ask your questions.

Now here is the opportunity those who are in Ankara nowadays. Tomorrow on February the 26th  Harun will be the guest speaker of Rekabet Derneği‘s (Competition Association) monthly meeting and he is going to share his thoughts on fining regulation and implementation of it.

PS: In order to join the meeting please contact the organization using the link above.