Investigation on Mey İçki

According to the TCA’s website, an investigation was initiated on the country’s biggest liquor company, Mey İçki. Mey was established by the joint venture group, comprising Nurol Holding, Özaltın Construction, Limak Construction and Tütsab, that bought the alcoholic beverages department of Tekel (State Monopoly for Alcoholic Beverages and Tobacco) in 2004. Undertaking was acquired by Diageo in 2011 for $ 2,1 billion.

Alleged accusations contain establishing exclusivity on retail selling points and foreclosing the market to rivals thereby violating both the articles 4 and 6 of the Competition Act. Mey İçki is considered to be the dominant company at several liquor markets including the traditional Turkish drink “rakı”.

Since the privatization in 2004, company had been subjected to 5 preliminary inquires but those inquires had never ended up into an investigation. Relying on the statistics that we shared earlier within this blog, we expect that the investigation to be concluded within the first quarter of the 2014.

Turkcell Judgment of The Council of State

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Last week, we have been informed that the Council of State has rendered a stay of execution order (available here) with regard to the TCA’s decision imposing nearly 92 million Turkish liras (equivalent to 42 million Euros) fine to Turkcell, the largest mobile phone operator in Turkey. The reasoning behind the court judgement is again related to procedural grounds.

As a reminder, the TCA’s decision, which was adopted in June 2011, concluded that Turkcell had abused its dominant position by its practices directed at its distributors and dealers and it was resolved that an administrative fine of TL 91,942,343.31 be imposed on Turkcell. That is still the highest fine ever imposed on a single company. However it was a highly controversial decision that 2 members had dissenting opinions while other 4 members concluded that Turkcell committed an infringement although one of them had a concurring opinion.

According to the Council of State, opinion of one of the Competition Boards’ members is not a concurring opinion despite its title says so, instead it was a dissenting opinion in its nature. Therefore the Competition Board must have been met second time to be able to decide on the matter due to the Article 51 of the Competition Act. Since that article, which sets out meeting quorum for the Competition Board, stipulates;

“In its final decisions, the Board convenes with the participation of at least a total of five members including the Chairman or the Deputy Chairman, and it decides via the parallel votes of at least four members.

Where the necessary quorum for the decision cannot be attained in the first meeting, the Chairman ensures that all members participate in the second meeting. However, if not possible, the decision is made via the absolute majority of the participants in the meeting. In this case, the quorum for the meeting may also not be less than the one mentioned in the first paragraph. In case of a tie vote in the second meeting, the vote of the side of the Chairman is deemed preponderant.”

At this point, it not difficult to guess what the TCA will do. In the light of its previous practice in relation to similar judgments of the court, it will cure this procedural defect in its decision and adopt a new decision imposing the same amount of fine. Hence we will reach to the same place by following a different path.