Dominance in Turkish Competition Law

Article 3 of Law No. 4054 on the Protection of Competition (Law No. 4054) sets forth the definition of dominance as the power of one or more undertakings in a particular market to determine economic parameters such as price, supply, the amount of production and distribution, by acting independently of their competitors and customers. Accordingly, the Guidelines on the Assessment of Exclusionary Conduct by Dominant Undertakings (Guidelines) states that an undertaking with the power to behave to an appreciable extent independently from competitive pressure is considered to hold the dominant position. Accordingly, unilateral activities prohibited by Turkish competition law generally fall under the ambit of Article 6 of Law No. 4054, which prohibits abuse of dominance. While Article 6 of Law No. 4054 does not categorically define what would constitute an abuse, it does provide a non-exhaustive list of examples. It also does not prohibit dominance itself, but rather the abusive conduct exercised by the undertaking(s) in question through the utilisation of such power. Dominant position is also a parameter taken into account for merger and acquisition transactions, and Article 7 of Law No. 4054 deems it illegal to establish or strengthen the dominant position by merger and acquisition transactions in a way that restricts the effective competition in the relevant market.

Relevant market definition is a prerequisite in establishing dominant position under the Guidelines. Accordingly, the definition of relevant product and geographic markets is the initial steps in terms of the analysis conducted under Article 6 of Law No. 4054. Afterwards, when evaluating a dominant position, the main factor to be investigated is to what extent the undertaking being examined can act independently from competitive pressures and while this is being conducted, the specific circumstances of each case should be taken into account in the relevant assessment.

As asserted in the Guidelines, the main principles considered in the determination of the dominant position are the relative market positions of the undertaking that is being examined and its competitors, entry and expansion barriers in the market, and the bargaining power of the buyers. In terms of market share thresholds for dominance, it is accepted in the Board’s precedents that undertakings with a market share below 30% are unlikely to be in a dominant position, and a more detailed examination is required for undertakings with a market share above this level.

For more information on dominance test in Turkey, please feel free to reach out to ELIG Gurkaynak at +90 212 327 1724 or through gonenc.gurkaynak@elig.com.