Turkish Competition Authority Fines Electronics Giants For RPM Practices: Beko, LG, Samsung And Others

The Turkish Competition Authority (the “Authority“) announced two important final decisions regarding resale price maintenance on August 9, 2023.

Both decisions involve violation determinations regarding the resale price maintenance.

Both decisions resulted in high administrative fines.

The First One1: Arçelik (owner of Arçelik, Beko, Grundig and Altus brands)

The review is about Arçelik Pazarlama A.Ş. (“Arçelik“) and was initiated with the Turkish Competition Board’s (“Board“) decision dated 09.09.2021 and numbered 21-42/617-M.

Arçelik operates in the consumer durables and consumer electronics sectors with sales, marketing and after-sales support services. Arçelik offers products and services all over Turkey with its 4 brands (Arçelik, Beko, Grundig and Altus) and brand collaborations. Arçelik has the largest indoor sales area in Turkey with nearly 3000 authorized dealers and is one of the largest representatives of modern retailing in Turkey with its wide and extensive authorized sales and service network.

The Authority found that these companies intervened in the resale prices of authorized dealers. Article 4 of Law No. 4054 on the Protection of Competition (very similar to TFEU Article 101) was violated.

The Board imposed an administrative fine on Arçelik based on its annual gross revenues at the end of the fiscal year 2021, as determined by the Board.

Fine amount: approximately TRY 365 million (approximately EUR 12 m)

The decision is appealable at the Ankara Administrative Courts and the reasoned decision will be published later. The publication of the reasoned decision may take 10-12 months.

The Second One2: Samsung, LG, SVS

The investigation was initiated with the Board’s decision dated 09.09.2021 and numbered 21-42/617-M, and administrative fines were imposed on the companies listed below:

  • Samsung Electronics Istanbul Pazarlama ve Ticaret Ltd. Şti.
  • LG Electronics Ticaret A.Ş.
  • SVS Dayanıklı Tük. Mall. Paz. ve Tic. Ltd. Şti.

The Authority found that these companies intervened in the resale price of authorized resellers. The Authority decided that there was a violation of Article 4 of the Law No. 4054 on the Protection of Competition (very similar to Article 101 of the TFEU).

The Board imposed an administrative fine on all three undertakings based on their annual gross revenues at the end of the fiscal year 2021, as determined by the Board.

The fine amounts are as follows:

  • 🖍Samsung Electronics Istanbul Pazarlama ve Ticaret Limited Şirketi: approx. TRY 227 m (approx. EUR 7.5 m)
  • 🖍LG Electronics Ticaret A.S.: approx. TRY 34 m (approx. EUR 1.1 m)
  • 🖍SVS Dayanıklı Tüketim Malları Pazarlama ve Ticaret Limited Şirketi: approx. TRY 2 m (approx. EUR 66 k)

The decision is appealable at the Ankara Administrative Courts and the reasoned decision will be published later. The publication of the reasoned decision may take 10-12 months.

In recent years, the Turkish Competition Authority has imposed record fines in the area of resale price maintenance. It is critical for undertakings to be vigilant in this area, prioritize their competition law compliance programs and implement measures to avoid even any misunderstandings in the area of resale price maintenance, taking into account the the Authority’s harsh and interventionist approach to RPM practices. Investigations lasting two years are exhausting for undertakings and also usually result in administrative fines, as resale price fixing is considered a hardcore violation. In private law, the penalties might be even more severe, as injured parties are entitled to up to three times the amount of compensation.

Footnotes

1. https://www.rekabet.gov.tr/tr/Guncel/arcelik-pazarlama-as-hakkinda-yurutulen–e531852cf535ee118ec500505685da39 (Official Announcement of the Turkish Competition Board dated August 2023, available only in Turkish, Access Date: 09.08.2023).

2. https://www.rekabet.gov.tr/tr/Guncel/samsung-electronics-istanbul-pazarlama-v-eda8e450f535ee118ec500505685da39 (Official Announcement of the Turkish Competition Board dated August 2023, available only in Turkish, Access Date: 09.08.2023).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

First published by Mondaq on 11 August 2023

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