Resale Price Maintenance in Turkey

Article 4 of Law No. 4054 on the Protection of Competition (Law No. 4054) lists certain restrictions which are prohibited under Turkish competition law. Fixing the purchase or sale price of products or services, or those elements such as cost and profit which form the price, and any terms of purchase or sale, fall within the prohibition set out in Article 4(1)(a) of Law No. 4054. In order for a restriction on competition falling under Article 4 of Law No. 4054 to be in compliance with the law, the restriction should either benefit from a block exemption or an individual exemption pursuant to Article 5 of Law No. 4054. However, Block Exemption Communiqué No. 2002/2 on Vertical Agreements (Communiqué No. 2002/2) strictly prohibits “preventing the purchaser from determining its own selling price” by way of fixing the resale price or setting the minimum resale price, and pursuant to Article 4(1)(a) of Communiqué No. 2002/2, resale price maintenance (RPM) is considered to be a hard-core violation that cannot benefit from the block exemption. Communiqué No. 2021/2 on the Commitments to be Offered in Preliminary Inquiries and Investigations Concerning Agreements, Concerted Practices and Decisions Restricting Competition, and Abuse of Dominant Position, and Communiqué No. 2021/3 on Agreements, Concerted Practices and Decisions and Practices of Associations of Undertakings that do not Significantly Restrict Competition also regard RPM practices as hard-core violations.

Accordingly, inter alia, instructing dealers and/or customers not to sell below a certain price level or at a certain profit margin; or monitoring the resale prices and taking actions for the implementation of such prices through monitoring practices would be considered as RPM and thus would violate competition law. Indeed, the Guidelines on Vertical Agreements explicitly provide that besides having an explicit RPM term in a vertical agreement, setting the profit margin of the buyer, setting the maximum rate of discount that may be implemented by the buyer over a recommended price level, providing discounts to the buyer to the extent that the buyer complies with recommended prices, or threatening the buyer with delaying and suspending deliveries, or terminating the agreement in case the buyer does not comply with those recommended prices or the actual implementation of such penalties are accepted as examples of indirect RPM practices.

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