THE EXCHANGE OF INFORMATION UNDER COMPETITION LAW

  • Posted on: 28 Dec, 2021
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Journal of Intellectual and Industrial Rights, Volume No.:17, Issue No.:61, 2021, pp.95-116.

THE EXCHANGE OF INFORMATION UNDER COMPETITION LAW

Av. Dr. Oğuzkan GÜZEL*[i]

Av. A. Satuk Buğra İSMAİLEFENDİOĞLU**

Abstract

Information exchange between competitors, although serve consumer welfare by increasing the transparency in the market, raises serious competition law concerns. Many competition authorities, including Turkish Competition Authority, are closely scrutinizing the information exchange between undertakings. As well as information exchange is being targeted as an anticompetitive practice by competition authorities, lack of specific regulations dealing with such a conduct requires particular attention to be paid in assessing the anticompetitive effects of exchange. Anticompetitive effects of information exchange between competitors should be evaluated based on the specific characteristic of each case and requires careful examination of the circumstances of exchange.

Keywords:  Competition, The Exchange of Information, Competitively Sensitive Information, Effect, Market

  1. EXCHANGE OF INFORMATION IN COMPETITION LAW
  • General Information Exchange

Although there are many different definitions in the literature, information exchange or information sharing in terms of Competition Law can be defined as the information sharing of one or more commercial undertakings that may affect the independent decisions of undertakings within the scope of competition, either unilaterally or mutually. In the natural flow of commercial life, it is inevitable for undertakings to exchange information directly or indirectly, regardless of whether they are competitors or not. In this respect, information sharing by undertakings directly or indirectly through undertaking associations, market research and consultancy companies, customers, suppliers or distributors makes the relevant markets somewhat transparent. In addition to that, it is also clear that in some cases, sharing information provides effectiveness to undertakings and therefore to all relevant stakeholders. However, it is observed that information exchanges between undertakings are prohibited by competition authorities if they have a restrictive effect on competition or have anti-competitive purposes.

The scope of the issues that can be described as information exchange cannot be drawn with precise lines. Shares such as price, supply, demand, production amount, capacity information, customers, current sales figures, future investment plans, changes in pricing policy are included in this scope. With the evaluations to be made on the qualifications of the listed elements, it is determined whether there are issues that violate competition in case of changes.

  • Efficiency Evaluation in Information Exchanges

One of the most important issues that the competition authority pays attention to in the exchange of information is ‘efficiency’. It is stated that the transparency that concerns and reflects on all people in the markets where information sharing takes place increases efficiency. Due to the positive effects of efficiency-enhancing shares on both consumers and other market stakeholders, it also provides a moderate approach by the competition authority.

Explanations on the subject are also included in the Guide on Horizontal Cooperation Agreements [1] published by the Competition Authority. The ‘information exchange in the guide can eliminate the problem of information asymmetry between the parties. It can also increase the efficiency of undertakings by enabling them to compare themselves with their competitors. In addition, information sharing can also help enterprises reduce their stocks, deliver perishable products to consumers faster, or reduce costs caused by instability in demand. Consumers, whose research costs have decreased and their options have increased, can directly benefit from this situation.’ statement shows the moderate attitude of the Competition Board in terms of providing efficiency or benefit to all stakeholders within the scope of information exchange.

However, the main issue to be considered within the scope of Competition Law is information exchanges that may cause restriction of competition. Information exchanges between competitors, which are not intended for all stakeholders, are carried out confidentially and contain sensitive information that may distort the competitive environment, are prohibited by competition law. The nature of the information shared and its impact on the market are the determining factors in the infringement assessment.

  • The Quality of the Changed Information

Information such as price and production quantities, production, cost, pricing, sales data, stocks, capacities, conditions of existing contracts, which enable the transparency of the variables that affect the competition dynamics of the relevant market and enable the undertakings to compete with each other, are considered sensitive because they form the basis of competition and these changes of information are generally prohibited. If the exchange of information between competitors occurs in the form of sharing information sensitive to competition, it can be considered as restrictive of competition. Competition sensitive information is expressed as information that increases the predictability of the future competitive market behavior of competitors, such as price, cost, sales, production, capacity utilization, bid specifications, stocks, and trade secret information by the Board. [2] The exchange of information sensitive to competition among competitors will make the market transparent and may lead to the coordination of competitive behavior. For this reason, it is important that the exchange of information sensitive to competition is limited and that it does not create coordination among competitors. In this respect, information exchanges that affect the independent commercial and economic decisions of undertakings can be considered as a violation by being included in the scope of sensitive information that is forbidden to be changed by the Board. In the ‘Guidelines for the Assessment of Horizontal Cooperation Agreements’ [3] published by the European Commission, information exchanges between competitors regarding individualized/personalized future prices and production quantities are considered as restricting competition in terms of purpose. In addition, it has been stated that private/confidential information exchanges between competitors regarding future pricing or production quantities, as they have the purpose of determining or determining prices or production quantities, will be considered as cartels under normal conditions and will be penalized.

Information sharing, which may affect and prevent the undertakings to make decisions in line with their independent preferences, is generally prohibited. However, the Board’s discretion regarding whether an information is sensitive information or whether the information is infringing is reserved. It is also seen that the information listed as sensitive above is not considered to be of a nature to cause a violation in some Board decisions. It can also be evaluated that information that is considered sensitive by the Board will not cause a violation because it is not up-to-date. However, although there is no definite and clear criterion in this regard, a final decision on the violation will be made by evaluating the effects of the exchanged information on the market or the decisions of the undertakings. For this reason, the up-to-dateness of the information and what it means exactly are also taken into consideration in the evaluation.

  • Market Structure in which Information is Shared

In order to evaluate the effect of the exchanged information on the market, first of all, the market structure should be examined. The structure of the markets in which the undertakings operate determines the effect of the shared information on the market. In markets that are already competitive, the circulation of information between parties is often seen as beneficial and is thought to bring the market to equilibrium. The situation is different in oligopolistic structures. In these markets, information exchange is approached more cautiously. In oligopolistic structures where there are few sellers, it is easy for competitors to negotiate with each other and act in accordance with the agreement. For this reason, in these markets, it is possible to implement information exchange as anti-competitive or restrictive competition between the parties. [4] However, the transparency of the market structure is effective in preventing the impact of information exchange from reaching serious dimensions. It is thought that the exchanged information will not have a serious impact on the market, since it is possible for market stakeholders to easily access the aforementioned information due to the transparent structure. However, in markets that are not transparent and where relevant information cannot be easily obtained, information exchange is not tolerated by the Competition Authority, as the impact of information exchange is much greater and can directly serve the purpose of restricting competition. Again, it should be noted that the discretion in determining the impact and importance rests with the Competition Board.

  • The Way of Information Sharing

When the cases of realization of Information Exchanges are examined, it is seen that there are more than one way. Information may be shared between competitors directly or indirectly through the supplier or distribution network of undertaking associations, market research institutions and similar third parties or undertakings. Undertakings may share or exchange information directly through the verbal interviews of their representatives or by using communication tools. Indirectly, information exchange can take place through associations of undertakings, companies collecting information to provide consultancy services, or the public. It is useful to remember that customers also provide indirect exchange of information due to their relations with undertakings.

It is also possible to exchange information unilaterally or mutually. In the event that undertakings unilaterally disclose sensitive information regarding competition to other undertakings, it is expected by the Competition Board that the other undertakings should not accept this information and that the sharing should be opposed. If the disclosed information is accepted explicitly or implicitly, it may cause a violation of competition. Mutual exchange of information is not necessary for the violation to occur, and unilateral explanations are considered sufficient. The unilateral transfer of the above-mentioned and sensitive information by the undertakings through various communication channels or face-to-face meetings will be considered as a violation by the Competition Board, as it may have an effect that restricts competition in the relevant markets and may pave the way for concerted practices/agreements of undertakings.

Associations of undertakings are also at a critical and sensitive point in terms of competition law regarding information exchange. These institutions, where the representatives of the undertakings have the opportunity to meet regularly, provide an environment for the exchange of information. It is regularly followed up by the competition authorities as the undertakings have agreements on many issues, especially price determination, through their unions, and have the possibility to shape their future policies.

As stated, unilateral or mutual exchange of information does not directly affect the situation of violation. However, providing information exchange at a certain interval or performing it only once is not sufficient for a violation assessment alone. While a situation where information exchange is made regularly is not considered as a violation by the Board, it is possible for a one-time exchange of information to be considered as a violation. With a single change, if the activities of the undertakings in the market are harmonized and competition is restricted, it can be concluded that competition is violated.

  1. EXAMPLES OF INFORMATION CHANGE FROM THE WORLD

Information exchange is a subject that has been examined and evaluated not only by the Turkish Legal System, but also by other legal systems in the world. In order to understand the subject more clearly, some cases related to information exchange in the USA and the European Union will be mentioned under this title.

  • Information Exchange Decisions in US Competition Law

The USA has become one of the effective systems in the formation of today’s understanding with its decisions on information exchange within the scope of Competition Law. For this reason, there is a need to include a few decisions in order to draw the framework on the subject more soundly.

First, the US Supreme Court’s 1969 United States vs. The Container Corporation of America[5] decision should be reviewed. In this decision, the court considered the effect of the exchange of information on prices rather than its purpose. In the aforementioned case, it was seen that 18 companies within the scope of the case shared the prices they determined for their products with each other. Although there is no agreement between the parties, information is not shared regularly and prices tend to decrease; It has been stated that the price is critical and sensitive at the point of limiting competition. For this reason, the Supreme Court has considered sharing up-to-date price information in an industry where concentration is high, product demand elasticity is low, and essential competition is above prices, as it has anti-competitive effects because it restricts competition. [6]

Another important decision is related to the result of the investigation conducted against the National Association of Music Merchants [7]. In the investigation carried out by the US Federal Trade Commission, it was determined that sensitive information regarding competition among manufacturers, distributors and dealers was exchanged during the meetings held in the Association for the past 2 years, and this information particularly includes sales prices and sales strategies. It has been stated that this situation limits competition and paves the way for the agreements of undertakings. In the face of the alleged violations detected, a commitment was requested by the Association and in accordance with the commitment, it was forbidden to engage in any activity for the sharing of prices and other competitively sensitive information between manufacturers or distributors. [8]

As can be understood from the decision examples presented above, it is understood that if the exchange of information has restrictive effects on competition, it will be penalized by the authorities and measures will be taken against these activities.

  • Information Exchange Decisions in European Union Competition Law

European Union competition law also has an important and guiding experience regarding the attitude towards information exchanges with its regulations and decisions at the point of exchange of sensitive information sensitive to competition. Today, it is seen that in the investigation reports prepared by the Competition Authority and the decisions of the Competition Board, frequent references are made to the decisions of the European Commission and the Court of Justice of the European Union.

Among the first decisions regarding the information exchange in the EU practice, the most important decision was the one regarding the 1992 UK Agricultural Tractor Registration Exchange. [9] It is worth examining because the Court of Justice made a decision on the merits in the exchange of information. The UK Tractor decision is about the establishment of a system that provides a significant exchange of information between tractor manufacturers and importers. Members can obtain detailed information through this system. In addition, members have the opportunity to access the aggregated data of other companies that are not included in the system through this system. It has been stated by the Commission that the majority of the market consists of the member companies of the system, that the products in the market are relatively homogeneous and that there are structural barriers to entry. When it comes to the examination of the exchanged information, it is seen that the Commission underlines an important point. First of all, the aggregated data may be appropriate for exchange between members, so that individual sales data cannot be determined; however, if the aggregated data for any geographical area, product group or time period contains less than 10 total sales, even the aggregated data will directly or indirectly lead to the determination of the individual sales amounts of the competitors, and therefore, the aggregated data containing the total sales below this number should not be exchanged. In the light of what has been said, the Commission has been determined that competition is prevented due to information exchange in the market, which has a concentrated nature, and entry barriers are increased for undertakings outside the system. In the file that came before it with a request for appeal, the Court of Justice upheld its decision stating that the information exchange system, which is the subject of the case, reduces or completely eliminates the uncertainty regarding the functioning of the market, and that it has a negative effect on the competition among the producers in this regard, and has once again revealed that competition is violated. [10]

One of the most important decisions of the Court of Justice of the European Union in recent years is the “T-Mobile” [11] decision made in 2009. It has been determined that the representatives of five GSM operators operating in the Netherlands came together and held a meeting and it was decided to reduce the commissions paid to the dealers in prepaid line subscriptions. In the market where the GSM undertakings mentioned during the investigation period are operating, only the 5 GSM companies mentioned are still operating and have a structure with high barriers to entry. Regarding the subject, the Dutch Competition Authority ruled a penalty on the grounds that the parties restricted competition through concerted practice/agreement, and this decision was also approved by the local court. The process progressed until the CJEU gave a preliminary decision with appeal requests. In the mentioned process, it was also argued that five GSM operators held a meeting only once, and it was stated that for this reason, the purpose of restricting competition could not be found. In the file brought before the CJEU, it has stated that there is no need for an additional impact assessment if it is determined that the action is against competition in terms of purpose. It has been accepted by the CJEU that the uncertainty between the undertakings has been removed with the meeting held regarding the timing and details of the discount to be made in the commissions planned to be paid to the dealers of the 5 GSM operators mentioned, and that this information exchange was made for anti-competitive purposes. In addition, the defense that there was only one meeting between the undertakings was not accepted by the CJEU. It has been stated that the format and number of the meetings will vary according to the market conditions. For this reason, it was stated that even a single meeting would be sufficient in order to harmonize the behavior of the undertakings that are within the scope of the present case and that are in a rival situation. [12] This decision had a significant impact on the evaluations of the Competition Board. The fact that the violation in terms of purpose is deemed sufficient for the detection of violation without the need for an impact assessment is an evaluation made by the Board in the decisions today.

Another important decision regarding the sharing of the price strategy, which is defined as sensitive competitive information, among undertakings is the 2011 decision regarding The Royal Bank of Scotland (RBS) and Barclays Bank, announced by the United Kingdom Fair Trade Office (OFT). [13] The investigation is an example of one-sided information sharing. In the investigation it was determined that RBS officials and employees conveyed private and trade secret information regarding future pricing strategies to Barclays Bank. Barclays Bank did not object to this information communicated to it through various channels, on the contrary, it used this competitively sensitive information in its pricing strategy. Within the scope of the investigation, it was stated that the information regarding the pricing strategies of the undertakings is sensitive to competition and sharing this information constitutes a violation. Although Barclays Bank was not subject to any criminal sanctions due to its filing of repentance, RBS was sentenced to an administrative fine.

The above-mentioned decisions are among the decisions that have an important place in EU Competition Law and form the basis of today’s practice. It should be noted that especially the decisions of the European Union Commission and the CJEU are taken into account in the Turkish Competition Board decisions and that the Competition Board frequently refers to the European Union decisions and regulations in its decisions.

  1. DECISIONS OF THE COMPETITION BOARD ON INFORMATION EXCHANGE

Pursuant to Article 4 of the Law No. 4054 on the Protection of Competition, agreements between undertakings, concerted practices, decisions and actions associations of undertakings that aim to directly or indirectly prevent, distort or restrict competition in a certain good or service market, or that have or may cause such an effect are illegal and prohibited. The issue of information exchange, explained above, is subject to criminal sanctions if it causes these behaviors that are strictly prohibited by law. Since the establishment of the Competition Authority, many investigations carried out by the Competition Board regarding the exchange of information and information exchanges in the examination of exemptions have been examined and application case-law has been developed with the decisions made.

Evaluations on this subject first came to the fore in the yeast and cement industry. The Turkish Cement Manufacturers’ Association applied to the Authority in 2005 and requested negative clearance due to the regular sharing of information among its members. It has been determined that the operation of the Union at the time of application contains anti-competitive aspects and in return, recommendations regarding change have been made. Preparing the data in a way that does not allow to be known on the basis of undertakings or groups of undertakings constituting an economic union, not preparing tables comparing undertakings with each other based on any data group, not discussing data at meetings where undertaking representatives come together, not sharing any interpretations that may affect competition with undertakings, not making estimations about information which are sensitive to competition and not sharing the tables showing monthly data with undertakings within two months after the end of the relevant month were notified by the Competition Authority to the relevant undertaking union in order to eliminate anti-competitive violations. [14]

In the “Enameled Coil Wire Investigation” decision dated 04.07.2007 and numbered 07-56/672-209, the Competition Board stated that the price lists of four of the six large-capacity enterprises operating in the Enameled Coil Wire market were changed at the same time, and found that the prices of nearly 40 products in the lists were exactly the same. An investigation was carried out on the suspicion that the same prices were in question, that the prices were determined together and that the list prices of the other two undertakings might be the same. Evidence obtained from undertakings operating in the relevant sector; It has been observed that the price lists are communicated to each other between the parties, the lists are sent between the undertakings during the periods of price change, and it has been determined that there is an ongoing, anti-competitive or restrictive coordination regarding the exchange of information. The statements of some undertaking officials and the undertakings’ sharing sensitive competition-sensitive information (prices, capacity utilization, production quantities, customer-based sales figures) with each other, the decision to adopt a single price application from a certain date in a meeting held within the association of undertakings, and within this framework, a single price application between the parties lead to the decision to impose an administrative fine on the parties as it was concluded that there was an agreement on the implementation of the list. [15]

In the investigation initiated regarding the flat iron and steel products market, the Board reached the conclusion of violation due to information exchange with its decision dated 16.06.2009 and numbered 09-28/600-141. It was understood from the documents obtained by the investigation committee that there was a regular exchange of information between Erdemir and Borcelik, which was within the scope of the investigation. Information on the sales and purchase amounts, export amounts and premiums of the undertakings were accepted as sensitive to competition in the relevant market, and a fine was imposed on the grounds that their changes caused violations. [16]

In the investigation launched against various undertakings operating in the automotive market in 2010, the Board’s decision dated 18.04.2011 and numbered 11-24/464-139, it was considered as a violation to share trade secret information, especially regarding price strategy, through a meeting or personal communication. Determining that some of the undertakings within the scope of the investigation held meetings regarding the future price policy, target, stock and sales strategy, both through meetings and through personal communication, the Board stated that the purpose of the meetings was to eliminate the risk arising from the obscurity of competitors’ behavior. In addition, it has been stated that the negotiations of the undertakings regarding the target, stock and sales strategy are also the negotiations regarding the price policy. It has been stated that the competitor’s stock, target and sales strategy can provide awareness about the pricing policy, and if such information is obtained, strategies to be used for reaching the target and destocking, raises and discounts will be predicted. For this reason, it considered the sharing of the information expressed by some undertakings within the scope of the investigation with each other as anti-competitive, concluded that most of these communications were restrictive of competition, and ruled that undertakings should be penalized with administrative fines. [17]

One of the decisions of the Competition Board that can be a reference on the limits of information exchange is the exemption decision about the Automotive Distributors Association (ODD). In the ODD individual exemption decision of the Competition Board dated 14.7.2011 and numbered 11-43/916-285, it was requested that a negative deduction or exemption be granted to the decision of the association of undertakings regarding the publication of the information in ODD’s website, database and reports. It has been expressed by the Board that since the disaggregated data on a province basis, launch information and information on the fleet sales figures of brands to be published by ODD through its website, database and other means have the potential to facilitate the prediction of competitor behavior by increasing the transparency in the market, it is seen that the sharing of these data has the risk of limiting competition. Considering that the publication of this information may cause the market to stabilize in a shorter time and encourage undertakings to innovate and develop more effective sales and marketing strategies, the Competition Board granted individual exemption to sharing the sales data of passenger cars and light commercial vehicles on a provincial basis provided that they do not include brands, models and sub-breakdowns. [18]

In the Competition Board’s ODD-TUIK exemption decision dated 12.4.2012 and numbered 12-20/520-M ODD’s request regarding province-based sales data regarding both new and second-hand passenger and commercial vehicles are sold by TUIK, separated by brand and product type had evaluated. ODD applied to the Competition Authority and stated that it wanted to share this information with its members by purchasing the TURKSTAT report or by preparing a report in the same scope, and an application was made to the Competition Board for an evaluation within the scope of competition law. The Competition Board stated that ODD could purchase the information from TURKSTAT or prepare a similar report, but that it should not include model sub-breakdown information and evaluated the application within the scope of the ODD decision taken in 2011. [19]

In the investigation initiated regarding the banks providing loans to corporate customers in Turkey, an evaluation was made on syndication loans in the Competition Board decision dated 28.11.2017 and numbered 17-39/636-276, and it was concluded that competition was violated by some undertakings. The Board, which separates the syndicated loan processes, stated that it would be contrary to competition law for banks to share their intention to bid for the purpose of being a regulatory bank or the conditions they would offer to undertake this task. In addition, it has been stated that the exchange of information about the conditions under which banks will want to participate in the syndication loan in the period before the authorization may also lead to a violation of competition law. As a result, the Board has identified some information as competitively sensitive. It has concluded that the exchange of information regarding price, amount, maturity and/or their participation in the relevant credit transaction, in general terms, information exchange regarding the sharing of price information constitutes a concerted practice/agreement with the aim of restricting competition. [20]

The Association of Insurance, Reinsurance and Pension Companies of Turkey applied to the Competition Authority with a request for negative clearance or individual exemption for the “Traffic Insurance Reference Scoring Project”, which was prepared to ensure the effective calculation of traffic insurance policy premiums. The Authority has decided on this matter with its decision dated 27.09.2017 and numbered 17-30/500-219. In its decision, the score, which is the subject of the project, is an important item of the calculation techniques of the undertakings, and because the risk score determined by the project is related to one of the basic elements in the pricing of all insurance companies, is considered as risky information in terms of competition. In addition, it is seen that the calculation of the information exchange under the association of undertakings is also taken into account. The application, which was not included in the scope of negative clearance for the reasons explained, was exempted for a period of two years because it met the exemption conditions. [21]

The exemption decision, dated 15.02.2018 and numbered 18-05/79-43, regarding the negative clearance application made by the Association of Financial Leasing, Factoring and Financing Companies, is one of the examples of the Board decisions on information exchange. The applicant association applied to the Board with a request for negative clearance/exemption from the transaction of periodically obtaining data and some additional data in the financial statements of its members regarding financial leasing, factoring and financial services markets and sharing them with its members as historical data. In the decision of the Board, it was stated that the Union does not have a purpose of restricting competition at the point of information exchange, and that some information that is the subject of the application may be given a negative clearance due to the publication of the information by the public authority. At the point of evaluation of the information planned to be shared, the Board divided the information into four groups. It has decided that because the information included in the first group is published by the public authority and it is consolidated data sharing, a negative clearance can be recognized. It has decided that negative clearance can be recognized because the information that it considers to be under the fourth group is not sensitive to competition and is consolidated. At the point of sharing the information under the remaining two categories, it is stated that it cannot be included in the scope of negative clearance, since it is competition sensitive data and it is foreseen to be shared on an individual basis. Nevertheless, it has been decided that sharing the information that is categorized as the third group can be included in the scope of exemption since it meets the exemption conditions in Article 5 of the Law No. 4054. Due to the effects that would cause by sharing distribution by asset codes, distribution by sectors, financial data, ratios analysis; number of customers, number of contracts, total contract amount information, turnover report, receivables report, important balance sheet items and general information data of the undertakings that are members of the union on an individual basis; it was decided that it could not be included in the scope of both negative clearance and exemption. [22]

In the exemption decision of the Competition Board dated 14.11.2019 and numbered 19-40/655-280, the negative clearance/exemption application made by the Turkish Port Operators Association has been evaluated. The Board, which included the assessment that the purpose of the information exchange system, which is the subject of the notification, is not to restrict competition, stated the data on the quantity (handling amounts on the basis of cargo) as risky in terms of competition, but determined the data such as the number of ship admissions and the number of personnel as less risky areas. It has been stated that data sharing, which does not contain any details regarding the number of personnel and personnel costs, and consists only of the number of persons employed at the port, does not constitute a violation of competition, therefore it can be considered within the scope of negative detection. In addition, it has been stated that the number of ships accepted by the ports is not a data that will lead to the coordination of competitive behavior among the ports. However, it has been determined that the amount of cargo handled in ports, of which one of the main activities is loading-unloading, corresponds to the sales amounts related to loading-unloading services in terms of ports, and therefore it is sensitive to competition. It has been decided to exempt this change, which may result in facilitating coordination if it is known by the competitors, on the condition that the delay period of its sharing is regulated as two months, since it carries the exemption conditions. [23]

In the much more up-to-date decision of the Board, dated 23.01.2020 and numbered 20-06/61-33, it has been determined that some undertakings operating in the discretionary insurance market for businesses with a large risk capacity (including project financing) violate the Law No. 4054. The decision contains very important details in terms of the evaluations of the information exchanges between the parties that are distorting the competition. Information such as policy terms, price, premiums were evaluated as sensitive to competition; Determining that this information was shared by the undertakings or that negotiations were made, the Board stated that the undertakings shaped their activities according to this information and that the uncertainty in the market was reduced by these exchanges of information. The criterion on which the Board evaluates in the detection of violations was whether the undertakings provided the exchange of this information during or before the proposal process. Timing has been an important determinant of the violation in the evaluation of the communications included in the investigation. The Board, which concluded that although some of the very similar information exchanges were considered as violations, some of them were not infringing; considered that the exchange of information during the policy formation phase or while the policy negotiations are in progress, as a violation of competition. [24]

The brands of Audi, Porsche, Volkswagen, Mercedes-Benz and BMW located in Germany and called the Group of Five shared information between them. In the context of cooperation on security they shared information on the maximum speed limit at which the radar cruise control system can operate and determining the maximum speed at which the roofs of vehicles can be opened and closed; within the scope of cooperation with the environment they shared information on preventing the use of gasoline particulate filters and delaying their release on the market, shared competitively sensitive information regarding SCR technology (SCR software and dosing strategy, including certification and cost aspects) and the findings regarding the allegations including ‘determination of the size of the AdBlue tank’. The aforementioned shared information found serious and sufficient by the announcement of the Competition Authority dated 01.07.2020. In the context of the aforementioned allegations, it has announced that an investigation has been launched to determine whether Article 4 of the Law No. 4054 has been violated and whether the alleged acts have had an impact in Turkey. [25] The investigation initiated by the Institution reaches a serious scope as it is an extension of the investigation carried out by the European Commission against the mentioned undertakings. Although the Commission has not yet reached a decision on the investigation, it is thought that both the German Competition Authority and the Commission have serious findings on the subject and information exchanges restricting competition are at serious levels. It is foreseen that with the completion of the investigation carried out by the Commission, extremely wide-ranging effects will arise and that the competition authorities will act in line with the Commission’s decision and serious evaluations will be made at the point of anti-competitiveness.

Information exchanges on strategic elements are generally accepted by the Competition Board as agreement/action restricting competition in terms of their purpose. This issue is also evident in various decisions of the 13th Chamber of the Council of State. In the relevant chamber decisions the Chamber stated its position on the evaluation of the shared information [26]; ‘According to Article 4 of Law No. 4054, it is sufficient for agreements, concerted practices or associations of undertakings to have a purpose of preventing, distorting or restricting competition; If this is the purpose of the said behavior, the effects of distorting competition in the market or the proof of these effects will not be sought. In other words, in cases where the anti-competitive purpose can be determined, it is of minimum importance to determine the nature of the acts and behaviors that are alleged to be anti-competitive. As a matter of fact, in summary, the transferred provisions of the Law No. 4054 and the reasons for it; It is stated that acts and behaviors aiming at infringing competition are prohibited. Sharing the competitively sensitive information about the future, of which there is no doubt that it is important for competition, with another undertaking competing in the market, will be suspected of having an infringing purpose in the market.’

  1. EVALUATION AND CONCLUSION

Information exchange has an extremely important place in the application of competition law in terms of detecting violations. Information exchange, which can provide serious benefits such as efficiency gain, is not welcomed by the competition authorities and may be subject to criminal sanctions if it creates a purpose or effect that restricts competition. However, it is not possible to draw a definitive framework for the exchange of information, which is prohibited by different legal systems in cases where competition is violated, except in exceptional circumstances. Due to the fact that the competition authorities evaluate each event in line with their own concrete facts, it becomes very difficult to determine whether there will be a violation or not, except for certain situations. Considering the decisions made, it is seen that the quality of the information that is the subject of the information exchange and the markets where the effect arises are evaluated in general, but it is seen that only one of these issues is evaluated in some decisions.

Within the framework of the Competition Board’s jurisprudence, the Board’s approach to information exchange can be summarized as follows; the main criterion in the evaluation of information exchange agreements is “to learn the future behavior of their competitors and to eliminate uncertainty in the market”. As can also be deduced from the Board’s decisions, information exchange between undertakings does not always restrict competition. Sometimes, it can also increase economic efficiency. For this reason, it is necessary to reveal the information that restricts competition or increases economic efficiency. Exchange of information on the following topics are restrictive to competition: price, cost, sales, production amount, capacity utilization, bid specification, stocks, trade secrets, etc. of competing undertakings. Exchange of information on issues restricts competition. On the other hand, the anonymous collection of all kinds of statistical information by the associations of undertakings increases the economic efficiency. Therefore, it is possible for associations of undertakings to create an anonymous joint pool of information. While the Competition Board imposes penalties through investigations when undertakings share information directly, it exempts them from collecting and sharing anonymous information through the association of undertakings, provided that they do not contain sensitive information regarding price formation. Another important point in sharing information within the scope of competition law is the age of information. At this point, although there is a jurisprudence regarding the transmission of information 3 months behind, it is considered necessary within the scope of exemption assessments to share these times at least one month behind, according to the characteristics of the sectors, in order not to use such data in instant price formations.

As a result, undertakings must be extremely careful when exchanging information. It is possible for undertakings or associations of undertakings to use information exchange for efficiency-enhancing reasons, knowingly or unknowingly, to engage in anti-competitive purposes or to cause effects. By the competition authority, it is essential that undertakings/unions of undertakings that do not want to face penalties should act in line with their independent decisions, and if information exchange is used, they should stay away from purposes and effects restricting competition. For this reason, it is necessary to implement the planned activities after careful examination and evaluation within the framework of competition law, and to implement the decisions accordingly.

REFERENCES

Arrangements

  1. Competition Authority, Guide on Horizontal Cooperation Agreements (2013) https://www.rekabet.gov.tr/Dosya/kilavuzlar/yatay-isbirligi-anlasmalari-hakkinda-kilavuz1.pdf (Access Date: 21.07.2020)
  2. Commission (EC), Guidelines on the Applicability of Article 101 of the Treaty on the Functioning of the European Union to Horizontal Co-operation Agreements, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52011XC0114(04)&from=EN (Access Date: 21.07.2020)

Academic studies

  1. PİŞMAF Ş, Information Exchange Between Enterprises in Economic and Legal Perspectives, (Published Specialization Thesis). (2012), Competition Authority, Ankara, https://www.rekabet.gov.tr/Dosya/uzmanlik-tezleri/115-pdf (Access Date: 21.07.2020)

Decisions

  1. Council of State 13th Chamber, 3564/947, 06.04.2017 https://www.rekabet.gov.tr/Safahat?safahatId=a1d2fde4-0c7e-4a4c-bf4f-a03ec2477836 (Access Date: 21.07.2020)
  2. Council of State 13th Chamber, 4615/960, 06.04.2017 https://www.rekabet.gov.tr/Safahat?safahatId=9246660c-5b1e-4711-a1ed-3a15932de4eb (Access Date: 21.07.2020)
  3. Council of State 13th Chamber, 317/471, 28.02.2017 https://www.rekabet.gov.tr/Safahat?safahatId=98f1fa80-3fd7-40fe-afc3-a72155a56afa (Access Date: 21.07.2020)
  4. In the Matter of National Association of Music Merchants [2009] Federal Trade Commission, File Number: 001 0203 https://www.ftc.gov/enforcement/cases-proceedings/001-0203/national-association-music-merchants-inc-matter (Accessed on 21.07.2020)
  5. Office of Fair Trading v. The Royal Bank of Scotland & Barclays Bank [2011] Office Of Fair Trading CE/8950-08 https://www.gov.uk/cma-cases/loan-products-to-professional-service-firms-investigation-into-anti-competitive-practices (Access Date: 21.07.2020)
  6. Competition Board, 04-26/287-65, 15.04.2004 https://www.rekabet.gov.tr/Karar?kararId=b856b05d-65b5-48cb-9034-0dfa94953afa (Access Date: 21.07.2020)
  7. United States v. Container Corporation of America (1969) Supreme Court of The United States 393 U.S. 333 (Access Date 21.07.2020)
  8. Competition Board, 06-29/354-86, 24.04.2006 https://www.rekabet.gov.tr/Karar?kararId=1b9a17d4-812d-4f05-a895-3efd1c15312a (Access Date: 21.07.2020)
  9. Competition Board, 07-56/672-209, 04.07.2007 https://www.rekabet.gov.tr/Karar?kararId=404cfb46-aded-4dea-bb2c-7a2f92b93b68 (Access Date: 21.07.2020)
  10. Competition Board, 09-28/600-141, 16.6.2009 https://www.rekabet.gov.tr/Karar?kararId=558073a3-ef2e-471f-b0b3-a112c7a1a647 (Access Date: 21.07.2020)
  11. Competition Board, 11-24/464-139, 18.04.2011 https://www.rekabet.gov.tr/Karar?kararId=b2bac617-7340-433a-99b8-b9ff8d3e1934 (Access Date: 21.07.2020)
  12. Competition Board, 11-43/916-285, 14.07.2011 https://www.rekabet.gov.tr/Karar?kararId=63f91605-1070-42f3-9b8a-6fcb521a2f72 (Access Date: 21.07.2020)
  13. Competition Board, 12-20/520-M, 12.04.2012 https://www.rekabet.gov.tr/Karar?kararId=a6d1fc3b-b3e1-48fa-8a2a-2c7439135a36 (Access Date: 07.2020)
  14. Competition Board, 17-30/500-219, 27.09.2017 https://www.rekabet.gov.tr/Karar?kararId=385721c3-3557-44d5-86fe-22dd540d51be (Access Date: 21.07.2020)
  15. Competition Board, 17-39/636-276, 28.11.2017 https://www.rekabet.gov.tr/Karar?kararId=b8a26358-485b-4af7-9d42-dc40652899fb (Access Date: 21.07.2020)
  16. Competition Board, 18-05/79-43, 15.02.2018 https://www.rekabet.gov.tr/Karar?kararId=e0b3d909-3b8e-4f0d-b67c-f7b501107996 (Access Date: 21.07.2020)
  17. Competition Board, 19-40/655-280, 14.11.2019 https://www.rekabet.gov.tr/Karar?kararId=0313792a-e7ca-4df8-9c7e-b90d290451b7 (Access Date: 21.07.2020)
  18. UK Agricultural Tractor Registration Exchange, Commission Decision 92/157/EEC (1992) OJ L68/19, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:31992D0157&from=EN (Access Date 21.07.2020)
  19. T-Mobile Netherlands BV & KPN Mobile NV & Orange Nederland NV & Vodafone Libertel NV v. Raad van bestuur van de Nederlandse Mededingingsautoriteit (Case C-8/08) [2009] ECR I-04529 http://curia.europa.eu/juris/liste.jsf?language=en&num=C-8/08 (Access Date 21.07.2020)

[1] Competition Authority (2013), Guide on Horizontal Cooperation Agreements. < https://www.rekabet.gov.tr/Dosya/kilavuzlar/yatay-isbirligi-anlasmalari-hakkinda-kilavuz1.pdf  >  (Access Date: 21.07.2020)

[2] Competition Board, 20-06/61-33, 23.01.2020 < https://www.rekabet.gov.tr/Karar?kararId=add88ffd-920d-4e9c-bd17-c1498b7b1118 > (Access Date:21.07. 2020)

[3] Commission (EC), Guidelines on the Applicability of Article 101 of the Treaty on the Functioning of the European Union to Horizontal Co-operation Agreements < https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52011XC0114(04)&from=EN > (Access Date: 21.07.2020)

[4] Competition Board, 04-26/287-65, 15.04.2004 < https://www.rekabet.gov.tr/Karar?kararId=b856b05d-65b5-48cb-9034-0dfa94953afa > (Access Date: 21.07. 2020)

[5] United States v. Container Corporation of America, (1969) Supreme Court of The United States 393 U.S. 333 (Access Date 21.07.2020)

[6] Şamil Pişmaf, Economic and Legal Information Exchange Between Enterprises, (Published Expertise Thesis), Competition Authority (Ankara, 2012) 26, < https://www.rekabet.gov.tr/Dosya/uzmanlik-tezleri/115-pdf > (Access Date: 21.07.2020)

[7] In the Matter of National Association of Music Merchants [2009] Federal Trade Commission, File Number: 001 0203 < https://www.ftc.gov/enforcement/cases-proceedings/001-0203/national-association-music-merchants-inc-matter> (Accessed on 21.07.2020)

[8] Pismaf (n 6) 40-41

[9] UK Agricultural Tractor Registration Exchange, Commission Decision (92/157/EEC), (1992) OJ L68/19, < https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:31992D0157&from=EN > (Access Date 21.07.2020)

[10] Pismaf, (n 6) 47-49

[11] Case C-8/08 T-Mobile Netherlands BV & KPN Mobile NV & Orange Nederland NV & Vodafone Libertel NV v. Raad van bestuur van de Nederlandse Mededingingsautoriteit [2009] ECR I-04529 < http://curia.europa.eu/juris/liste.jsf?language=en&num=C-8/08 > (Accessed 21.07.2020)

[12] Pismaf (n 6), 50

[13] Office of Fair Trading v. The Royal Bank of Scotland & Barclays Bank [2011] Office Of Fair Trading CE/8950-08, [2011]  < https://www.gov.uk/cma-cases/loan-products-to-professional-service-firms-investigation-into-anti-competitive-practices >  (Access Date: 21.07.2020)

[14] Competition Board, 06-29/354-86, 24.04.2006 < https://www.rekabet.gov.tr/Karar?kararId=1b9a17d4-812d-4f05-a895-3efd1c15312a > (Access Date: 21.07. 2020)

[15] Competition Board, 07-56/672-209, 04.07.2007 < https://www.rekabet.gov.tr/Karar?kararId=404cfb46-aded-4dea-bb2c-7a2f92b93b68 > (Access Date: 21.07. 2020)

[16] Competition Board, 09-28/600-141, 16.6.2009 < https://www.rekabet.gov.tr/Karar?kararId=558073a3-ef2e-471f-b0b3-a112c7a1a647 > (Access Date: 21.07. 2020)

[17] Competition Board, 11-24/464-139, 18.04.2011 < https://www.rekabet.gov.tr/Karar?kararId=b2bac617-7340-433a-99b8-b9ff8d3e1934 > (Access Date: 21.07. 2020)

[18] Competition Board, 11-43/916-285, 14.07.2011 < https://www.rekabet.gov.tr/Karar?kararId=63f91605-1070-42f3-9b8a-6fcb521a2f72 > (Access Date: 21.07. 2020)

[19] Competition Board, 12-20/520-M, 12.04.2012 < https://www.rekabet.gov.tr/Karar?kararId=a6d1fc3b-b3e1-48fa-8a2a-2c7439135a36 > (Access Date: 21.07. 2020)

[20] Competition Board, 17-39/636-276, 28.11.2017 < https://www.rekabet.gov.tr/Karar?kararId=b8a26358-485b-4af7-9d42-dc40652899fb > (Access Date: 21.07. 2020)

[21] Competition Board, 17-30/500-219, 27.09.2017 < https://www.rekabet.gov.tr/Karar?kararId=385721c3-3557-44d5-86fe-22dd540d51be > (Access Date: 21.07. 2020)

[22] Competition Board, 18-05/79-43, 15.02.2018 < https://www.rekabet.gov.tr/Karar?kararId=e0b3d909-3b8e-4f0d-b67c-f7b501107996 > (Access Date: 21.07. 2020)

[23] Competition Board, 19-40/655-280, 14.11.2019 < https://www.rekabet.gov.tr/Karar?kararId=0313792a-e7ca-4df8-9c7e-b90d290451b7 > (Access Date: 21.07. 2020)

[24] Competition Board, 20-06/61-33, 23.01.2020 < https://www.rekabet.gov.tr/Karar?kararId=add88ffd-920d-4e9c-bd17-c1498b7b1118 > (Access Date: 21.07. 2020)

[25] Competition Authority, 20-28/436-M, 11.06.2020 < https://www.rekabet.gov.tr/tr/Guncel/audi-ag-dr-ing-h-c-f-porsche-ag-volkswag-e24fd7a4babbea11811c00505694b4c6 >  (Access Date: 21.07.2020)

[26] Council of State 13th Chamber, 3564/947, 05.07.2017

< https://www.rekabet.gov.tr/Safahat?safahatId=a1d2fde4-0c7e-4a4c-bf4f-a03ec2477836 > (Access Date: 21.07.2020), Council of State 13th Chamber, 4615/960, 12.07.2017 < https://www.rekabet.gov.tr/Safahat?safahatId=9246660c-5b1e-4711-a1ed-3a15932de4eb > (Access Date: 16.07.2020), Council of State 13th Chamber, 317/471, 12.06.2017 <https://www.rekabet.gov.tr/Safahat?safahatId=98f1fa80-3fd7-40fe-afc3-a72155a56afa > (Access Date: 21.07.2020)

[i] * Oğuzkan Güzel, Former Competition Authority Specialist / Lawyer, Güzel Law Firm,

< https://orcid.org/0000-0002-4695-0277 >

** A. Satuk Buğra İsmailefendioğlu, Lawyer, Güzel Law Firm, < https://orcid.org/0000-0001-6626-2298 >

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