Excessive Pricing in Turkish Competition Law

Under Turkish competition law, in addition to the exclusionary practices aimed to exclude competitors, the exploitative practices aimed to exploit consumers are also condemned as a form of abuse of dominance, even if the latter does not lead to direct harm to competition. Excessive pricing and imposing unfair and exploitative contract terms are the main examples of exploitative practices. Excessive pricing, which is the most common exploitative practice that the Turkish Competition Board (Board) analyses, is defined by the Board as the price that is constantly applied significantly above the competitive level as a result of the exercise of market power (see, Fuel Oil (13.03.2019; 19-12/137-61)).

According to the Board’s decisional practice, the main factors that the Board considers for finding abusive pricing may be summarised as (i) operating at or near monopolistic status where there are barriers to entry and (ii) being subject to or complying with the regulation. Although there are decisions where the Board analyses the behaviour of undertakings that are not monopolies, it does not impose a fine after its analysis. Moreover, the Board has previously emphasised that there is no legislation applicable in the market to the pricing strategy of undertakings, in addition to dismissing allegations solely on the ground that the sector is regulated. Having said that, the Board refrains from making a direct intervention on the price in markets where there already exists a regulatory intervention, even if it determines that the pricing strategy may have an exploitative effect.

The arguments against intervention in excessive pricing are, to some extent, based on the difficulty of applying the right remedy when abuse is established. That is because competition authorities should refrain from behaving as price regulators in order not to distort the efficient distribution of resources. This is the reason why the Board holds back from determining the competitive price level itself and merely states that the price should be reduced to the competitive level.

For more information on excessive pricing in Turkish competition law, please feel free to reach out to ELIG Gurkaynak at +90 212 327 1724 or through gonenc.gurkaynak@elig.com.