The Long-Standing Judicial And Adiministrative Process Of The Turkish Competition Board’s Zeyport Decision

Maritime services are closely followed up by the Turkish Competition Board (“Board”) in the recent years and the Zeyport case is a good example for this matter. The case was first initiated in 2013 and after many backs and forths between the Board and the administrative courts, one cannot still say that it is over for good.

In 2013 and 2014, ship agent Gözcü Gemi Acentelik Hizmetleri Ltd. Şti. (“Gözcü Gemi”) filed complaints[1] to the Turkish Competition Authority (“Authority”) claiming that a terminal operator in Istanbul, Zeyport Zeytinburnu Liman İşletmeleri San. ve Tic. A.Ş. (“Zeyport”) (i) abused its dominant position, mainly by refusing Gözcü Gemi’s service requests for harboring, office and parking, (ii) engaged in discriminatory practices to exclude Gözcü Gemi from the market, and (iii) engaged in an agreement or a concerted practice to share the market with Gemtac Gemi Tali Acenteliği ve Bot Hiz. Tic. A.Ş. (“Gemtac”), another ship agent that is claimed to be an affiliated party of Zeyport.

Having found the initial concern serious, the Board decided to launch a preliminary inquiry against Zeyport and Gemtac to assess whether Articles 4 and 6 of Law No. 4054 on the Protection of Competition (“Law No. 4054”) were violated. However the Board did not find the allegations sufficient for launching a full-fledghed investigation through its decision of 26.03.2014 as (i) no evidences were found with respect to the alleged anti-competitive agreement/concerted practice and (ii) Zeyport’s activities did not amount to an abuse since the rejection of Gözcü Gemi was mainly due to rational reasons.[2]

Gözcü Gemi filed an administrative lawsuit for the annulment of the Board’s decision and claimed that the Board should have conducted a thorough examination with an investigation. On 17.11.2016, Ankara 2nd Administrative Court accepted Gözcü Gemi’s request and decided to annull the Board decision on the ground that, the Board’s examination within the preliminary inquiry phase was not sufficient and that it was possible only through a full-fledged investigation to demonstrate whether there was a competition law infringement in Zeyport’s activities.[3]

Based on this annulment decision, the Board launched a full-fledged investigation against Zeyport and Gemtac and conducted a thorough examination that expanded to nine months of an investigation period, as pointed out by the court. However the Board found at the end, on 15.03.2018, that the investigated undertakings did not violate Articles 4 and 6 of Law No. 4054, and that there was no need to impose administrative monetary fines against them.[4] The Board’s reasoning in the 2018 decision was open to discussion for many aspects, such as; (i) on one hand, it was stated that there was no need to define a relevant geographic market whereas on the other, the Board stated that Zeyport could not be deemed as a dominant player in harboring services by taking into account the harboring capacity of certain facilities in Istanbul, (ii) the claim that there is an affiliate relationship/actual management link between Zeyport and Gemtac was overruled, (iii) the criteria of refusal to supply were not fulfilled, including the fact that the services of Zeyport was not deemed indispensable or essential for Gözcü Gemi.

Thenafter, Gözcü Gemi filed another annulment lawsuit against the Board’s 2018 decision and on 20.12.2019, Ankara 13th Administrative Court dismissed the lawsuit by confirming the Board’s following reasonings: (i) Zeyport is not in a dominant position, (ii) there are indeed alternatives (i.e., substitution) of Zeyport, (iii) Zeyport refused to provide harbour services to Gözcü Gemi because of its capacity limits/i.e. rational reason, (iv) although Gözcü Gemi was informed that a space for one boat may be allocated upon its request due to the capacity increase; Gözcü Gemi did not respond positively, and (v) the limited harbour capacity has been filled by allocating the space in a chronological order of the application dates and not based on an agreement or concerted practice between Zeyport and Gemtac.[5]

Gözcü Gemi appealed Ankara 13th Administrative Court’s dismissal decision, and on 31.03.2021, the 8th Administrative Law Chamber of the Ankara Regional Administrative Court accepted Gözcü Gemi’s request, overturned the dismissal decision and decided to annul the Board’s 2018 decision[6] with the following remarks:

  • With the decision of the Governorship of Istanbul to prevent informality and crimes[7]; Zeyport Port, Ambarlı Port and Kartal Pier were designated as bonded departure points in order to control the contacts with ships (Ambarlı and Kartal did not enter into service), and the movement of agent boats from other departure points were prohibited. Pursuant to this decision, Istanbul Port Authority stated that 8 boats can be accommodated in Kumkapı harbour, 22 boats can be accommodated in Zeyport, and the other agent boats can be accommodated in Yenikapı breakwater. Further to that, the boats waiting outside Zeyport have to come to Zeyport for service and complete the necessary procedures, and then depart from this port.
  • Zeyport evaluated the applications for harbour to fill the capacity of 22 boats in a chronological order starting from the earliest date of the application[8], and rejected Gözcü Gemi’s first application dated 12.05.2009 on the ground that the capacity was already full.
    Upon complaints of the agents, the Governorship further decided on other measures in order to prevent the inconveniences of monopolization[9], such as (i) terminating the practice of requesting letters of credit from the agent boats who receive services from the Zeyport customs departure points for the damages they may cause to the port, (ii) ensuring that the port operator allocates the harbour areas fairly, (iii) applying the same service tariff to all agents, and charging the mooring fees only if the service is provided. However, considering that (i) most of the transactions cannot be carried out at Karaköy Port, (ii) the termination of customs application at Karaköy Port due to the Galataport Project, (iii) the inability to conduct food and personnel exchange to the ships from Haydarpaşa, and (iv) the failure to accommodate the agent boats in both ports; the court determined that Zeyport is in fact the only port where all port services can be provided, especially for ships in the southern anchorage areas.
  • The court found that Board’s decision to not define a geographic market since”it will not change the final assessment in line with the information and documents obtained during the investigation process” was erroneous.[10] According to the court; the relevant geographic market should have been defined as Zeyport, considering that the only place where the services can be provided is Zeyport[11] and the competitive conditions are noticeably different from the neighboring regions in the market for agent services for transit ships.
  • Despite the emphasis in the Governorship’s decision that the port operator should provide fair use of the sheltered areas of the facility as a harbour; almost all of the spaces have been used by the same undertakings from the beginning, and the complainant’s request was rejected without any work being done. Accordingly, the court found that Article 4 (d) of Law No. 4054 has been violated by being engaged in an agreement that constitutes ‘complicating and restricting the activities of competing undertakings, or excluding undertakings operating in the market by boycotts or other behavior, or foreclosing the market to potential new entrants”.

This noteworthy ruling of the 8th Administrative Law Chamber of the Ankara Regional Administrative Court was of course appealed by the Board, however the 13th Chamber of the High State Court approved the annulment decision on 04.11.2021.[12]

Prior to the High State Court’s ruling, the the Board re-evaluated the Zeyport file in accordance with the Regional Administrative Court’s annulment decision through its decision dated 24.06.2021 with number 21-32/420-212 . In line with the Regional Court’s ruling, the Board finally decided to define a relevant geographic market, as Zeytinburnu Port (i.e. Zeyport’s location) for harboring services. At the end, in line with the conclusion of the Regional Court that the act of “Complicating and restricting the activities of competing undertakings, or excluding undertakings operating in the market by boycotts or other behaviour, or foreclosing the market to potential new entrants” in subparagraph (d) of the second paragraph of Article 4 of the Law No. 4054 had occurred, the Board too concluded that Zeyport and Gemtac had indeed violated Article 4 of the Law No. 4054 to ensure the execution of the court decision. The ratio of administrative monetatry fine is blackened in the Board’s reasoned decision as it reveals the relevant undertakings’ revenues, but in short, the Board did not apply any aggravating factors whereas Zeyport’s active efforts to find a solution to the harbouring problem throughout the investigation process was considered as a mitigating factor.

The reasoned version of the Board’s decision dated 24.06.2021 was published on the Authority’s website on March 2022. Considering that the reasoned decisions of the Board are usually notified to the relevant parties just a few days prior to being published, one may say that the Zeyport case is still not over as the relevant parties (especially Zeyport and Gemtac) may pursue administrative lawsuits for the annulment of the Board’s 2021 decision. In any case, the final outcome of this matter will be determinant for the players of maritime industry, especially in terms of the application of refusal to supply criteria.

[1]. Gözcü Gemi filed a total of three complaints on 25.11.2013, 13.02.2014 and 24.02.2014 respectively.

[2]. The Turkish Competition Board’s decision dated 26.03.2014, and no. 14-12/223-99.

[3]. Ankara 2nd Administrative Court’s decision dated 17.11.2016, and no. E. 2014/1379, K. 2016/2917.

[4]. The Turkish Competition Board’s decision dated 15.03.2018, and no. 18-08/152-73.

[5]. Ankara 13th Administrative Court’s decision dated 20.12.2019, and no. E. 2018/1738, K. 2019/2780.

[6]. Ankara Regional Administrative Court 8th Administrative Law Chamber’s decision dated 31.03.2021, and no. E. 2020/795, K. 2021/676.

[7]. Governorship of Istanbul’s decision dated 17.08.2005, and no. 2005/56.

[8]. All 10 boat requests of Gemtac were met on 01.10.2005, 8 out of 9 boat requests of Istanbul 34 were met on 18.10.2005, 1 out of 2 boat requests of Alden were met on 21.10.2005, 3 boat spaces were provided to Ekspres as of 12.10.2006 after leaving Gemtac on 08.09.2006 (although there were previous applicants whose the requests were not met or partially met), and 1 boat space was given to Zeyline as of 12.03.2009, upon Zeyline’s request on 22.07.2008, based on Alden’s departure on 10.03.2009.

[9]. Governorship’s decision dated 27.06.2007 and no. 2007/213

[10]. The Board’s 2018 decision, para. 45.

[11]. Indeed, the alternative port of Zeyport, Ataköy Marina, is located within 2.2 km at the nearest and costs a much higher accommodation fee and causes more transportation costs and loss of time.

[12]. 13th Chamber of the High State Court’s decision 04.11.2021, E. 2021/3448, K. 2021/3683.

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