Turkey: Automotive Companies are Cleared of the Allegations of Stockpiling and Competitively Sensitive Information Exchange!

Introduction

The automotive sector has been on the radar of the Turkish Competition Authority (“TCA”) for a extended time. In this feeling, the TCA conducted an investigation (“Investigation”) with regards to the allegations that some undertakings running in the initial-hand and 2nd-hand automotive markets violated Law. No. 4054 on the Protection of Competitors (“Competitors Regulation”) by means of stockpiling and raising the car prices with each other.

The reasoned conclusion regarding the Investigation (“Selection”) [1] was lately published on the TCA’s formal site. As a consequence of the Investigation, the Competition Board (“Board”) determined that as the parties to the Investigation did not stockpile and improve the car charges with each other via exchanging competitively sensitive information in the relevant markets, there was no area for any administrative fine for them.

In this regard, the popular assessments of the Board in the Determination will be brought to your consideration inside this article. Inside this scope

• first of all, the basic evaluations of the Board on the allegations of violations in the initially-hand automotive sector and the next-hand automotive current market with regards to all undertakings that are occasion to the Investigation will be provided,
• subsequently, the allegedly competitively delicate data exchange happened among the Groupe PSA Otomotiv Pazarlama A.Ş. [2] (“PSA”) and Doğuş Otomotiv Servis ve Ticaret A.Ş. [3] (“Doğuş”) will be examined, and
• and finally, the considerations concerning the allegations claimed in the Investigation Report well prepared through the Investigation system that the competitively delicate data trade occurred among Borusan Otomotiv İthalat ve Dağıtım A.Ş. [4] (“Borusan”) and Volvo Car Turkey Otomobil Ltd. Şti. (“Volvo”), on which the Investigation Committee changed its belief with the More Created Feeling and concluded that there was no violation, will be introduced.

Inadequate Proof to Great the Automotive Organizations in the 1st-Hand Market

In the choice, to assess the allegations manufactured concerning stockpiling of initial-hand autos, for starters (i) the procurement procedures of the import and domestic automobiles executed by the distributors were being examined, and then (ii) evaluations were created in the framework of the facts transmitted in reaction to the information requested from the distributors. In this context, the Board highlighted that:

• despite the fact that it is seen that the strategic facts about the opponents about connectivity engineering [5] was asked for among the related undertakings, it is unclear from which opponents, what variety of information and facts and through which signifies it was obtained, and there is no evidence of communication among the the competition recognized to receive explained info,
• due to the fact the automotive sector in Turkey is a highly transparent sector, undertakings can examine the industry circumstances by accumulating facts about competitors from community sources, by employing solutions such as the thriller shopper method [6],
• approximated info on marketing expenditure quantities of makes and advertising and marketing value per motor vehicle are readily available by means of the assessment of publicly obtainable information and hence these data can not be thought of competitively delicate and
• the impact of the Covid-19 epidemic in the to start with months brought on the selection of vehicles produced in Turkey to just about end fully, and the amount of imported autos remained at a level that could not react to the increase in demand.

For these explanations, the Board concluded that the reason for the lessen in provide was not induced by stockpiling.

In conditions of the statements that the successive improve in auto rates was due to the mutual rate improve by arrangement of the distributors, the Board decided that automobile price ranges had greater because of to (i) the financial landscape of the country, (ii) the negative affect of the Covid-19 epidemic on automobile production, (iii) expanding uncooked content price ranges, (iv) the boost in exchange rates, (v) as the consumer’s tendency to car or truck buys, the motor vehicle rates are mounting, and hence, the lack of ability to launch cars to meet the expanding demand (vi) the deterioration of the offer-demand balance, and (vii) the maximize in exclusive intake tax (“SCA”) fees.

In this context, the Board concluded that there was no proof that the distributors improved the costs jointly or restricted the offer in a way that was not based mostly on the normal sector situations. Moreover, it was concluded that rate increases were being designed both for the motor vehicle styles issue to the problems and for the other motor vehicle styles that ended up declared to be the finest-promoting.

No Exchange of Competitively Delicate Facts in the Second-Hand Automotive Market

In the Choice, about the second-hand automotive market, the claims examined are:

• “the groups functioning in this marketplace this sort of as gallery rental businesses, lead to the versions of vehicles that are by now handful of in the marketplace to eliminate their availability in the to start with-hand automotive market place by acquiring them from sellers” and
• “After buying motor vehicles, they supply them for sale as a result of on-line and physical gross sales channels, well over the rate of the very first-hand cars.”

The Board decided that there was no trade of competitively delicate facts amongst the suitable undertakings owing to the subsequent reasons:

• weekly automobile income and announced car numbers are retrospective information and can be attained from open up sources by following the tender platforms,
• the system in query is employed as a aspect gross sales channel and as a result acquiring specific info about the tender is a prerequisite for the execution of the commercial partnership,
• facts on selling price changes is not commercially strategic data, but a typical assessment of automotive businesses,
• it is not apparent which brand, phase, model, mileage, or machines amount the information relating to the inventory load and the variety of automobiles prepared to be bought in the potential addresses, and it is similar to the normal inventory standing and product sales approach of the undertaking, and
• there is no proof that information and facts relating to inventory, product sales targets, and related issues are shared consistently, systematically and in a divided way.

The Details Exchange involving Doğuş and PSA could not be Proved!

In the Investigation Report and Further Composed Viewpoint, it was claimed that a direct competitively sensitive info exchange was carried out involving Doğuş and PSA considering the fact that some of the correspondence that contains facts about PSA’s increase in rates and sales targets had been recognized inside Doğuş, and it was not achievable to get these types of facts from a supply other than the distributor. In this respect, administrative fines ended up requested both in the Investigation Report and in the Added Written Viewpoint against Doğuş and PSA for the reason that they violated the Competitors Legislation.

In the Final decision, it was established that info pertaining to Peugeot mild industrial vehicles was bundled in the inside correspondence designed by Doğuş on 11.03.2020 and the price approaches prepared to be executed were discussed. The Board also stated that the information and facts on Peugeot’s product sales volumes brand name light commercial automobiles in January and February 2020, the record costs as well as ultimate responses to the buyer, doable financial loan campaigns, etcetera., had been discussed to take motion on the pricing of a Doğuş light-weight business design. The Final decision, analysed the related correspondence, such as:

• in March, certain styles of Peugeot will be brought to Turkey,
• Peugeot Lively 100hp automobiles will be introduced only as fleet motor vehicles,
• Peugeot Active Comfort and ease autos will not be brought in March,
• which design Peugeot manual automobiles will be introduced to Turkey predominantly in March, and which kinds will be brought in rather smaller quantities,
• for a sure model, Peugeot was working on a new marketing campaign such as a Try out 50,000 mortgage with 12-month maturity and .69 interest amount.

On the other hand, the Board evaluated that the statements utilized in the correspondence had been not ample to establish the existence of conversation concerning Doğuş and PSA taking into consideration the details that:

• no very clear source is specified in the related correspondence relating to how the competitively sensitive information attained Doğuş workers, and
• it is widespread for undertakings to assess market disorders by checking details pertaining to competitors received through publicly obtainable sources, this sort of as the mystery shopping technique.

In this context, the Board decided that it could not be proved that there was an details trade in between Doğuş and PSA in the scope of the conclusions, and appropriately there was no will need to impose fines on the undertakings.

The Board and the Investigation Committee Parted Their Techniques: Volvo and Borusan are Cleared of the Allegation of Selling price Data Exchange

In an internal correspondence attained through the inspection carried out within Borusan, it was established that Borusan workers shared inside their corporation the details that the delivery quotas of specified Volvo models for the January-March time period were previously exhausted.

The Investigation Report concluded that Borusan and Volvo violated Short article 4 of the Competition Law because (i) the inside correspondence amongst Borusan officials was about getting the data that the supply quotas for some of Volvo’s automobiles have been fatigued within the scope of the technique of raising the vehicles’ selling price and (ii) Borusan ideas to abolish the campaigns to optimize the earnings to be received from the sale of autos of related styles with Volvo. In this respect, an administrative wonderful was asked for in opposition to Borusan and Volvo in the Investigation Report.

In this context, Borusan alleged that the information in issue is received from unbiased analysis companies and by the thriller shopper process. In addition, Volvo alleged that the information and facts relating to motor vehicle availability can be very easily recognised by a consumer who wishes to get a car or truck, and the only way to get the data pertaining to Volvo’s stock information is not to exchange facts with Borusan. In addition, the statements utilized in the connected correspondence ended up not sufficient to clearly show the existence of any conversation between Borusan and Volvo.

The penned plea submitted by Borusan that the supply of the details relating to Volvo is an unbiased investigation enterprise was found appropriate by the Investigation Committee, and in this regard, the Committee transformed its viewpoint in the More Written Viewpoint and concluded that Borusan and Volvo did not violate the Opposition Law. The Board mentioned in its Decision that:

• the automotive sector in Turkey is a very clear marketplace and a great deal of facts, like potential revenue forecasts, is routinely shared inside the Automotive Distributors’ Association and the Automotive Makers Affiliation, and
• undertakings in the appropriate current market are presently able to obtain data about market place conditions by next details about rivals from public sources via procedures this kind of as thriller consumers.

In this regard, the out there evidence was not certified to prove that Post 4 of the Levels of competition Legislation was violated as a result of the exchange of information and facts relating to costs among Borusan and Volvo.

Conclusion

With the Selection, the Board finished the Investigation, the result of which has been eagerly awaited by the events to the Investigation and the overall level of competition regulation local community, without imposing a wonderful on any endeavor. We consider that the Decision is critical in phrases of expressing the conventional of evidence foreseen by the Board in direction of competitively sensitive details exchange.

To sum up, with the Final decision, the Board underlined that:

• to confirm the alleged competitively sensitive information exchange between rivals, the resource of the info shared in the internal correspondence ought to be bundled in the suitable correspondence or there will have to be other evidence exhibiting this,
• respecting the pleadings of the undertakings social gathering to the investigation, the mere sharing of facts inside the rival companies that the Board deems to be accessible from publicly offered resources can not, by alone, show the existence of an infringement and,
• there was no evidence that the distributors raised the costs at the same time or restricted the source in a way that was not regular with the dynamics of the market.

Even though the information is limited to the developments explained earlier mentioned, looking at the heritage of Turkish opposition legislation and the dynamic mother nature of the automotive marketplace, we foresee that the automotive sector is most likely to continue to be on the Competitors Board’s radar. In this respect, we will continue on to hold you current on the latest developments in the sector.

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[1] The Board’s determination dated 03.03.2022 and numbered 22-11/170-69.

[2] Groupe PSA is the distributor of Citroen, DS, Peugeot and Opel brand names.

[3] Doğuş is the distributor of Volkswagen Passenger Automobile, Audi, SEAT, CUPRA, Škoda, Bentley, Lamborghini, Porsche, Volkswagen Professional Automobile, and Scania manufacturers.

[4] Borusan is the distributor of BMW, MINI, BMW Motorrad, Jaguar and Land Rover manufacturers.

[5] Connectivity engineering can be defined as just one that enables a auto with an Net relationship and WLAN community to communicate with other world-wide-web-related parts by using sure protocols with the assistance of these kinds of a connection.

[6] The thriller shopper technique entails a researcher acting as a buyer without the need of the consumer company staff’s awareness.