On 26.10.2022, Ankara Regional Administrative Court’s 8th Administrative Chamber (“Regional Court“) revoked one of the most significant annulment decisions of Ankara Administrative Courts in the latest years. The revocation concerns every multinational undertaking which has activities in Turkey as it puts a great emphasis on the limits of the Turkish Competition Board’s (“Board“) jurisdiction regarding seizure of data belonging to foreign entities and in general, the concept of economic unity in Turkish competition law.
The Board’s imposition of administrative monetary fines to five international bank for the failure to provide the requested information
The Board had decided to impose administrative monetary fines on several international banks’ (namely, Citibank, ING, JPMorgan, Goldman Sachs and BBVA) Turkish extensions (direct/indirect subsidiaries which are companies incorporated in Turkey, Turkey branches, liaison offices e.g.) through its decision of 02.07.2020 no. 20-32/397-179 for the failure to comply with the obligation to provide the information requested by the Turkish Competition Authority (“Authority“). This was due to the fact the Turkish extensions of these international undertakings were not able to (or simply declined) to provide the trade data requested by the Authority which belong to the parent undertakings abroad. In specific, the Authority requested from the Turkish extensions of these undertakings to be provided with the data pertaining to the traders who are employed in the USA and the UK (separately for each country) by ensuring that such data covers information pertaining to the main group of the relevant undertakings.
First instance court’s annulment of the Board’s administrative monetary fine decision
The undertakings filed appeals and on 16.02.2022, Ankara 3rd Administrative Court (“Court“) had annulled the Board’s decision dated 02.07.2020 no. 20-32/397-179 with file number 2021/435 and decision number 2022/270 by stating (in brief) that such information requests should have been addressed to the international undertakings due to Turkish official notifications legislations and that the principle of economic unity is a principle that serves the purposes specific to competition law and cannot be applied in procedural matters such as notifications. You may find our detailed review on the Board’s decision and the Court’s annulment ruling in our Mondaq article dated 11.03.2022.
Regional Court’s revocation decision
The 8th Administrative Chamber of the Ankara Regional Administrative Court accepted the second-degree appeal application of the Authority and revoked the Court’s annulment decision on 26.10.2022 by its file no. 2022/396 E. and decision no. 2022/1261 K. The Regional Court emphasized that the economic unity principle is applicable to all matters concerning the application of the Law No. 4054 on the Protection of Competition and noted that according to the effect doctrine, the undertaking’s location and its nationality do not matter in determining the jurisdiction of the Authority and that the important issue is that whether the undertaking’s activities have any effect in Turkey. The Regional Court referred to the EU law and accordingly stated that, if the undertaking has any presence, such as a branch or a sales office, in Turkey within the body of an economic unity, the request for the provision of the said information and documents can be directed to the companies to which it is affiliated with. The Regional Court also noted that, even if the undertaking does not have a commercial presence in the EU, it is accepted that the notification can be made to the main undertaking to which it is economically affiliated within the EU for the provision of requested data.
In this regard, the Regional Court indicated that the undertakings are obliged -to the extent possible- to provide the data requested by the Authority. Ultimately, it is found that the Board’s imposition of an administrative monetary fine to Garanti Bank (BBVA’s Turkish affiliate) was lawful as it had failed to address the Authority’s request duly and completely with respect to the information regarding BBVA’s traders employed in the USA and the UK. Therefore, the Regional Court revoked the first instance court’s annulment decision and upheld the Board’s infringement decision.
The Board’s decision that is the root of this judicial chain had a remarkable significance as, according to the undertakings, they were not able to provide such data, even if they want to, due to the data privacy restrictions that their parent undertakings are obliged to abide by in their jurisdictions (the USA and the UK, in particular). This case once again demonstrated the importance of activating and strengthening the communication channels (such as ICN) between competition authorities of different jurisdictions.
Moreover, having already been discussed by one governmental authority and two different levels of court (in addition to competition law scholars and practitioners), this chain also shed light on a different aspect of the application of the economic unity principle by being at the centre of a fruitful legal discussion, which is expected to continue for at least a few years.
The Regional Court’s revocation decision is not final, Garanti Bank (and the other relevant parties) can file a third-degree ap
. First instance administrative courts that are authorized to oversee appeal applications against the Board decisions.