Turkish Consumer Electronics Sector under Antitrust Investigation

Atari“The prayer of an angry gamer is so powerful that server gods hear it instantly and help the one. Thus if  you don’t want to face the rage of the gods you’d better not piss a gamer off.”

A legend from the age of empires.

In February the TCA opened an investigation into the following undertakings which operate in computer and video game consoles retail business in Turkey: Aral Game, Bimeks, D&R, Teknosa and Vatan Computer.

The reason behind this investigation was the alleged RPM aggreement and anticompetitive cooperation between Aral Game, which is a (or the) major video game importer/distributer in Turkey, and abovementioned retailers. This investigation was welcomed by the Turkish gamers as they celebrated this intervention and expected that it would solve the rocket prices in video games in Turkey. A quick googling shows that the gamers were already discussing the high video game prices and the pricing policy in forums even with a petition, with over 10,500 petitioners, calling gamers to a boycott. They also blamed world-wide game developers like Ubi-Soft, Sony and Microsoft for not acting against those high prices in Turkey.

Well, the story does not end here. A couple of days ago the TCA announced that Gold Computer and Kliksa which are other two major technology retailers, were also included in this investigation while it widened the scope of the investigation from video/console games to consumer electronics and three more undertakings, LG Electronics Turkey, Media Markt Turkey, and Türk Philips, were also included.

With this last decision almost all major electronic distributors, retailers and  producers, including international chains,  in Turkey are now under an antitrust investigation which had started with a focus on just video games but then its scope extended covering the markets for consumer electronics. The investigation may be regarded as industry wide since it would be very difficult for a Turkish consumer to think about any other electronics retailer apart from those under investigation. The widened investigation is still about the breach of Article 4 of the Act No: 4054 which is on anti-competitive agreements.

Constitutional Court of Turkey: Legislative Act Against Minimum Tariffs for Professional Unions is Constitutional

Constitutional Court of Turkey, which is the final court of appeal in Turkey before the European Court of Human Rights, just released a judgement (on the Official Gazette dated 16 July 2015, page 43 -in Turkish) that is quite crucial as it shows the approach of the judiciary to the anti-competitive acts of professional associations.

Constitutional Court of Turkey

The story may be considered to begin in 2006 when Law no: 5477 amended the relevant article of the law of Turkish Medical Association (not the dentists) no: 6023 such that the association could not fix the minimum prices for medical services given by the physicians anymore. This amendment was quite controversial at the time but the amendment is still valid. It may not be a coincidence that this amendment was compatible with the official opinion of the TCA given as a result of the decision related to the preliminary investigation on Turkish Medical Association in 2003. There are other decisions and opinions of the TCA related to the professional unions, which are not mentioned here for the sake of a medium-long post (!). But if you are interested you can read this paper (Çokgezen and Toksoy 2013) and this expertise thesis (2004) about the struggle between TCA and professional unions – sorry both are in Turkish.

Well, in 2011, similar to the story of Turkish Medical Association, a legislative decree (KHK: 663 -in Turkish-) amended the article 11 of the Law of Turkish Dental Association, which is a professional union established by law and subject to governmental regulation in addition to having administrative authorities in many areas related to the dental profession. This article had authorized the association to set the minimum prices of dental consultation and treatments every year. With the legislative decree in 2011 this authorization was limited such that the association could only release guide tariffs and could not set the prices anymore.

After this amendment CHP, (Republican People’s Party, which is not the right wing party despite the connotation of its name) the main opposition party in the Great National Assembly of Turkey (GNAT), appealed against this to the Constitutional Court of Turkey saying that the association should have the authority to set the prices relying on the Article 135 of Turkish Constitution which declares that:

ARTICLE 135- Professional organizations having the characteristics of public institutions and their higher bodies are public corporate bodies established by law, with the objectives of meeting the common needs of the members of a given profession, to facilitate their professional activities, to ensure the development of the profession in keeping with common interests, to safeguard professional discipline and ethics in order to ensure integrity and trust in relations among its members and with the public; their organs shall be elected by secret ballot by their members in accordance with the procedure set forth in the law, and under judicial supervision…

However with its judgement (Dated 04 December 2014 and numbered E.2013/114 K.2014/184) the Constitutional Court rejected the claims of CHP and approved the relevant part of the amendment implemented by the above-mentioned decree. This judgement was also appealed and again it was overturned by the court.

While rejecting the request for annulment of the amendment, the constitutional court underscored that “although fixed minimum tariffs may be considered to be compatible with the ruling (facilitating professional activities, ensuring the development of the profession in keeping with common interests etc.) of Article 135 of the constitution, this article does not entail price fixing nor does entitle the organizations to fix the tariffs…” and “... fixed minimum tariffs are not a must for efficient and competent health services” and ruled that in the light of Article 135 entitling the professional organizations to fix prices shall be appraised by the legislative body.

This is not a judgement related to a specific TCA decision which is subject to supervision of administrative courts and the Council of State as the court of appeals. However it shows that the approach of the highest judicial court in Turkey, which is apparently compatible with the TCA’s opinions and decisions, declares that price fixing can not be considered as a vested right of the professional organizations according to the constitution.