Türkiye opens dominance probe into instant noodle maker and orders interim measures

Türkiye's Competition Board has opened an investigation into Adkoturk Gıda Sanayi ve Ticaret Limited Şirketi over alleged abuse of a dominant position in the instant noodle market and has imposed interim measures while the case is pending, the Competition Authority said in an announcement dated 7 October. The Board took the decision, numbered 26-35/988-M, at its meeting of 23 September. The announcement says Adkoturk produces, sells and distributes the Indomie and Supermie brands.

The alleged conduct

The Board is examining four practices, according to the announcement: obstructing rivals and foreclosing the market to competitors, maintaining buyers' resale prices, restricting active and passive sales by dealers, and imposing non-compete obligations of indefinite duration on dealers. The announcement does not name the article of Act No. 4054 on which the investigation rests. Article 6 of the Act is the abuse-of-dominance provision, and its listed examples include preventing another undertaking from entering the area of commercial activity, discriminating between purchasers of equal status and imposing limits on the terms of resale.

The announcement records the Board's decision to investigate and the practices under examination. It does not state a finding that an infringement has occurred, and it does not say how long the investigation will take or whether a hearing will be held.

Interim measures

While the final decision is pending, the Board has barred Adkoturk from giving points of sale free products, delisting budgets, activity budgets, visibility support and similar commercial advantages, the announcement says. The stated aim is to prevent competition infringements and unrecoverable damage in the relevant market, and the announcement cites Article 9(4) as the basis.

That paragraph of the Act lets the Board impose interim measures where serious and irreparable damage is likely before a final decision, to preserve the pre-infringement situation without going beyond the scope of the final decision. Article 17 sets a daily fine of five in ten thousand of annual gross revenues for failing to comply with obligations set by an interim measure decision.

What follows under the Act

Where the Board starts with a preliminary inquiry rather than a direct investigation, the rapporteur must report within 30 days and the Board then meets within ten days to decide whether to open a full investigation, under Articles 40 and 41 of the Act. Article 43 requires an investigation to be concluded within six months at the latest, with one extension of up to six months, according to the Act. The same article allows undertakings to offer commitments in abuse cases, which the Board can make binding if it finds them sufficient, as it did in the EssilorLuxottica case on 9 October. Commitments cannot be accepted for naked and hard-core infringements, such as price fixing between competitors. Infringements of Article 6 can be fined up to ten per cent of annual gross revenues under Article 16.

The case joins a busy autumn docket. The Authority's hearing notices show the Board scheduling a hearing on 22 September for the pilotage and towage companies Anadolu Kılavuzluk, Deniz Kılavuzluk, Marin Römorkör ve Kılavuzluk and Sanmar Denizcilik, in an investigation into alleged bid rigging in application and tender processes and exchange of competitively sensitive information in labour markets. Labour markets also featured on 7 September, when the Authority opened an investigation into 37 undertakings and two associations of undertakings.

A hearing in the investigation of the wood-panel producer Yıldız Entegre Ağaç Sanayi ve Ticaret AŞ, which operates in the MDF and particle board sector, was set for 6 October on alleged collusion under Article 4, according to its notice. A hearing for the construction company Tarlak Yapı İnş. Mad. San. AŞ is scheduled for 20 October, also under Article 4, the notice says. In each case complainants and third parties wishing to make a statement must petition the Authority before the hearing, and others may follow online by completing a participation form.