Refusal to Deal in Turkish Competition Law

In principle, any company, whether dominant or not, has the right to freely choose the counterparts with which it will do business. That said, in certain exceptional circumstances, refusal to deal by a dominant company may be considered abusive, in which case the dominant company may be required to deal and also face sanctions. Refusal-to-deal cases are analysed under Article 6 of Law No. 4054 on the Protection of Competition (Law No. 4054) as a form of abuse of a dominant position. Refusal to deal can take the form of halting an ongoing supply relationship concerning the goods, services or inputs, or it can be in the form of refusing the demands of potential customers for supply. Moreover, refusal to deal may also take the form of conditional and unconditional refusal. A dominant undertaking imposing certain conditions to supply the requested goods or services, such as non-compete clauses in the downstream market or exclusivity clauses, on the other hand, is considered conditional refusal to deal. If there are no such requirements, then it is deemed to be an unconditional refusal.

When assessing claims of refusal to deal, the Turkish Competition Board (Board) looks for the presence of all of the following three conditions in order to find a violation: (i) the refusal should relate to a product or service that is indispensable to be able to compete in a downstream market; (ii) the refusal should be likely to eliminate effective competition in the downstream market; and (iii) the refusal should be likely to lead to consumer harm. In addition to these factors, the Board examines whether there is an indicator of anti-competitive intent.

When evaluating anti-competitive intent, the Board also looks at whether the company refusing to deal with a certain party is active in the upstream or downstream market in which the relevant party is active. If this is not the case, the Board is less likely to find that the conduct was motivated by a desire to disrupt competition. When the dominant undertaking and the undertaking it refused to supply in the downstream market are competitors (i.e., when the dominant undertaking is vertically integrated), the refusal to deal is more likely to lead to a restrictive effect on competition. In general, it is observed that the Board has rejected refusal-to-deal allegations relating to supplier and reseller relationships by concluding that there is no meaningful competition between a supplier and a reseller.

For more information on refusal to deal in Turkish competition law, please feel free to reach out to ELIG Gurkaynak at +90212 327 1724 or through gonenc.gurkaynak@elig.com.