Hub & Spoke Cartels in Turkey

The Turkish antitrust regime strictly prohibits cartels and deems them to be unlawful and hardcore restrictions of competition law. As the Turkish cartel legislation is administrative and civil in nature, not criminal, cartels are subject to administrative fines.

Pursuant to Article 4 of Law No. 4054 on the Protection of Competition, cartels include restrictive agreements between competitors created by way of (i) fixing the purchase or sale price of goods or services, elements such as cost and profit which form the price, and any condition of purchase or sale; (ii) allocation of markets for goods or services, and sharing or controlling all kinds of market resources or elements; and (iii) controlling the amount of supply or demand for goods or services, or determining them outside the market. Cartels may be created by way of explicit collusion, as well as by concerted practices.

Hub-and-spoke arrangements are cartels that are not coordinated through direct exchanges between the horizontal competitors, but through indirect exchanges via a vertically related supplier or retailer. Hub and spoke type cartels are established through; (i) retailer A sharing pricing information pertaining to future with supplier B, foreseeing that B could use such information in a way to affect market conditions, (ii) B, transferring such information to retailer C (under the condition that C foresees that the information was provided to B by A) and (iii) C determining its own future pricing by way of utilizing such information. Accordingly, A, B and C are parties to an agreement or a concerted practice that can restrict competition. In this context, hub and spoke type cartels are deemed as cartels that are hard to prove due to the indirect communication between competing retailers. Since competitors can harmonize their practices through a series of vertical agreements between the platform and third parties, hub and spoke type cartels deem a horizontal collusion which would necessitate direct communication irrelevant.

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