Antitrust Litigation 2023 Comparisons

As the Turkish competition law practice has evolved over the last 25 years since its establishment, antitrust litigation has developed alongside it. Accordingly, as the number of Turkish Competition Board (TCB) decisions has gradually risen over the years, competition law awareness has also increased, as has private antitrust litigation. The courts have recently ruled a significant amount of damages in favour of claimants in major cases, such as the case against Mey/Diageo, the largest alcoholic beverage company in the country.

Together with the legislative change in Law No 4054 in 2020, commitment and settlement mechanisms are introduced to the Turkish competition law practice, which in turn has increased the amount of ongoing private antitrust litigation initiated. With the legislative change, the wording of Article 5 of Law No 4054, regulating individual exemptions, is slightly changed when the mention of TCB is removed the from the clause, enabling the courts to grant individual exemption decisions theoretically. This change reflects the legislative intention to invite the courts to be more active on such decisions and that in the upcoming period, such changes together seem to increase the amount of private antitrust litigation proceedings brought before the courts.

In respect of public litigation, where annulment proceedings were initiated against the TCB’s decisions, the Turkish Constitutional Court rendered a milestone judgment this year, which may affect the future of the on-site inspections the TCA conducts. It ruled that on-site inspection conducted without obtaining a judicial decision violated the applicant’s right to immunity of residence, protected by the Constitution of 1982. Following a series of antitrust litigation proceedings, and as a result of the individual application made to the highest legal body for constitutional review in Turkey, the Turkish Constitutional Court evaluated that the TCA’s on-site inspection authority, set forth in the Law No 4054 on the Protection of Competition (Law No 4054) contradicts with the fundamental right in the Constitution. For more detail, please see the Turkey Trends & Developments section of this guide.

In the recent years, the TCA has gradually become more active in detecting competition law violations. Indeed, this ongoing trend can easily be observed both when the amount of the TCB’s decisions imposing administrative monetary fines, and the exponential growth of the on-site inspections conducted, are considered. Not surprisingly, this trend also increases the cases brought before the courts, both in private and public antitrust litigation. Besides, as competition law awareness increases through the country, the number of cases heard increases as well. 

Regarding the public antitrust litigation enforcement practice, there have been comparably more developments than on the private side. The TCB has fined various undertakings based on hindering or complicating on-site inspections, and these have been subject to antitrust litigation even before the legislative change introduced to the Turkish competition law in 2020, rendering the TCA’s authority broader in scope. The TCB’s zero tolerance on deletion of data during on-site inspections manifests itself in the increase in the total amount of monetary fines imposed between 2020 (TRY2.5 million) and 2022 (TRY115 million). As a result, there are various ongoing cases brought before the Turkish Administrative Courts to annul the TCB’s relevant decisions.

Amongst such cases, Ankara 2nd Administrative Court’s Sahibinden decision [2022/254] constitutes an important example where the standard of proof in the TCB’s decision is found to be insufficient. Contrary to the TCB’s firm stance on deletion of data during on-site inspections where it does not consider whether the deleted data is related to business, or whether it is retrieved or not; the Court has considered the fact that the company gave explicit instructions for its employees to not delete any data as of the start of the on-site inspection, the TCA’s personnel were able to recover the deleted data from a mobile phone of another employee, and that the deleted data was not related to the business. Setting the bar for the standard of proof with respect to the TCB’s decisions on hindering or complicating on-site inspections, the Court ruled that there is no concrete information or documents on which the TCB can base its claim, and stayed the execution of the decision. Reflections of the Administrative Court said judgments were observed in the TCB’s A101 (Yeni Mağazacılık) decision, one of the leading chain supermarkets in Turkey; which ONaL represented. Indeed, even though there was a doubt of data deletion, the TCB had set a high standard of proof and decided not to impose any administrative monetary fine on the undertaking concerned.

The legal basis for a claim for damages is both the general principles of tort (as well as those of contract, in case the violation stems from an agreement) set forth in the Code of Obligations (COO) and the Law No 4054. In fact, based on the tortious acts, there are specific provisions in Law No 4054, which enable the claimant to claim for damages based on the COO.

There aren’t any particular rules for follow-on or standalone claims in Turkish competition law practice. Accordingly, it is theoretically possible to initiate a compensation lawsuit without waiting for a TCB decision or filing a complaint to the TCA. Having said that, in practice, to rule on a case for a claim of damages arising from competition law, the courts either require a TCB decision, or at least a complaint or an application filed before the TCA. Indeed, in its precedents, the Court of Cassation, the last instance for reviewing decisions of the civil courts in Turkey, has ruled that even though the TCB’s final decision is not a prerequisite to bring a compensation claim, it will be evaluated as a preliminary issue and the court will wait for the TCB’s final decision before ruling on the merits of the claim. Please see 2.3 Decisions of National Competition Authorities for detailed information.

Currently, there are no specialist competition courts/judges in Turkey. However, the need for such specialised courts, both for the supervision of the TCB’s decisions arising from competition violations and for the effective implementation of the Law No 4054, have been frequently discussed between the Turkish academics and practitioners.

As there aren’t any specialist competition courts, actions for damages are heard as per the Civil Procedure Law (CPL) and the general competent courts are the civil courts. Having said that, such cases may also fall into private courts’ jurisdiction depending on the claimant’s legal status and the subject matter of the dispute. For instance, if the claimant qualifies as a ”merchant” in an action for damages lawsuit, that case is heard before the commercial courts. In addition, disputes regarding the consumers that are below certain thresholds, may also be brought to the Arbitration Committee for Consumer Problems in accordance with the Consumer Protection Act.

The administrative courts have exclusive jurisdiction for proceedings on public antitrust litigation. Accordingly, investigated parties that violate competition rules may appeal the TCB’s final decisions, measures, and administrative monetary fines imposed, but not its interim decisions. Administrative court decisions may be appealed to the regional administrative courts and finally to the Council of State, the highest administrative court in Turkey. In cases where a private enforcement action is brought before a civil court before the final decision of an administrative court, the court may render it as a preliminary issue, waiting for the final judgment of the administrative court.

As per the Turkish Constitution, the courts are bound to apply the laws, and interpreting Law No 4054 is not only at the TCB’s exclusive discretion. Accordingly, in theory the courts are not bound by the TCB’s decisions. However, in its precedents, the Court of Cassation has ruled that the damaged parties can file a lawsuit right after they are aware a person violated Law No 4054, and in the presence of damage. The court also underlined that the TCB’s final decision is required for compensation claims. Accordingly, even if the injured parties can bring action for damages before the civil courts; considering that the TCB’s precedents are evaluated as a preliminary issue, a final TCB decision will be sought before ruling on the merits of the case. As a result, considering that cases initiated at the civil courts before the TCB’s final decision are usually dismissed/halted and resumed when such decision is finalised, it would be preferable to wait until TCB’s decision is finalised to bring an action for damages before the courts.

Theoretically, if the TCA has legal benefit in obtaining the same outcome with the claimant or the defendant, it can intervene in a private litigation proceeding. However, considering that the civil courts do not rule on the legality of TCB decisions, but instead only rule to compensate damages that stem from competition law violations, there is no legal interest of the TCA to intervene in such proceedings in practice. As regards the administrative proceedings that are initiated to annul TCB decisions, the TCA usually intervenes, as it has an explicit legal benefit in doing so.

According to the general principles of torts that are applicable to Turkish private antitrust litigation, the burden of proof lies on the claimant seeking compensation based on the allegation that the relevant party’s acts violated competition law. Indeed, Articles 49 and 50 of the COO provide that the claimant shall demonstrate that an unlawful act is formed, the defendant is at fault, damage incurred as a result, and a causal link in between.

A more flexible burden of proof regime is foreseen in Law No 4054 for a specific instance laid out in Article 59. Accordingly, if the claimant presents specific evidence (ie, de facto sharing of the market, stability of the market price for a long time or increase in prices within close intervals by the undertakings concerned) demonstrating an impression of an agreement or distortion of competition in the market; proof that the parties are not in a concerted practice shifts to the defendants.

Regarding the pass-on defence, there is no distinction between follow-on and pass-on defences in Turkish competition law, and both are applicable. Even though not specifically recognised in the Turkish legal system, it is practically possible to claim a pass-on defence. However, since the asserting party is bound to demonstrate its claim, in order to prove that the other party concerned is not injured, the party asserting a pass-on defence may request the commercial books and bills of the other party through the court.

As per the Constitution, the courts shall apply the laws. Accordingly, since the courts are not bound by the TCB’s decisions, theoretically it appears as if standalone defences are adopted in the Turkish legal system. However, in practice, the courts generally evaluate the TCB’s precedents as a preliminary issue and wait until the TCB issues its final decision.

Even though Law No 4054 provides that injured third parties are able to claim damages, Section 5 of that law does not provide any definition of an injured party who has incurred damage as a result of a competition law violation. Regardless of the purchasers being direct or indirect, anyone who can demonstrate a link between the violation and the damage incurred can bring their claims forward. As a result, there is no distinction between direct or indirect purchasers in terms of bringing claims. Having said that, since qualifying as a “claimant” in private antitrust proceedings requires the establishment of a connection between the competition law violation and presence of damages, indirect purchasers may face difficulties when bringing claims before the courts.

In any case, due to the vagueness of the legislation and the fact that there is no specific definition with regards to an “injured party”, it is suggested that the indirect purchasers should also be able to seek damages resulting from competition law violations. On the other hand, some academics also underline that allowing indirect purchasers to pursue private antitrust damages would result in a dramatic rise in legal proceedings, which would then lead to multiple parties making the same claim for the same damage.

Judicial proceedings do not have a definite period from the issuance of a claim through a trial, and the parties do not have any right to accelerate them. However, by not requesting an extension, they may accelerate the proceedings in practice. In practice, legal proceedings take a comparably long time and, including the appeal phases, the total length would generally amount to three years.

As regards administrative proceedings, filing a lawsuit does not automatically stay the execution of the TCB’s decision, which is an administrative act itself. However, upon the plaintiff’s request, the court may order a stay of execution decision. According to Article 27 of the Code of Administrative Procedure, administrative courts may stay the execution of the decision if the execution of the TCB’s decision is likely to cause irreparable damage or damage that is hard to compensate and that such administrative act is explicitly contrary to law.

The party suffering from a competition law violation does not have to wait for the issuance of a TCB decision and can file a lawsuit before the competent court as soon as submitting a complaint to the TCA. However, it is widely accepted that it is preferable for a court to postpone hearing a case that has been filed following an alleged violation of the competition law until the TCB makes its decision and it has become finalised in the event of an appeal, as outlined in 2.3 Decisions of National Competition Authorities. Therefore, in general, a standalone action will be pending if there is an ongoing competition law inquiry. As a result, the courts frequently grant stay of execution decisions until the TCB finalises its decision on the alleged violation of competition law.

Class actions are not available in the Turkish judicial system. However, even though highly limited in scope, collective actions are set forth in the CPL. Accordingly, associations and other legal entities can have legal standing of their own and file a lawsuit to protect the interests of their members or the people they represent. It is not possible to define the class on a case-by-case basis since the class is already defined as the members of the association or legal entity whose rights have been violated.

As per Article 113 of the CPL, associations and other legal entities may initiate a collective action to “protect the interest of their members”, “to determine their members’ rights”, and “to remove the unlawful situation or prevent any violation in the future”. However, as the statute only permits a “determination of illegality” type of claim, it is not possible to seek compensation through such a course of action. The judgment encompasses all members of the group.

The claimants may opt in in accordance with Article 57(c) of the CPL if their claims share a common legal basis or set of facts. They are also able to opt out if they wish to. Opting out, however, might prevent the right of the claimants from bringing the same complaints again in the future.

There is no certification process, since collective proceedings are not specifically intended for private enforcement of competition law. Only an association or a legal entity may initiate collective procedures to defend the rights of its members, according to Article 113 of the CPL, as expressed above. As per the same article, the legal entity must comply with its articles of association and not go beyond the bounds imposed by that statute.

Law No 4054 does not mandate collective settlements; however, as a general rule, the opposing parties are allowed to agree on an out-of-court settlement which does not require a judicial oversight to become effective. As per the relevant articles of CPL, parties may settle at any point before the court makes its final judgment and once settled, the lawsuit is effectively terminated.

The “strike-out” mechanism, which would allow the court to assess the case on its merits during the pre-trial phase, is not provided under the civil procedure rules. The Court starts to consider the merits of the case after the examination phase. In the Turkish legal system, the concept of “summary judgment” does not exist; as a result, the defendant is not permitted to request the disposal of all or part of an action before a thorough trial is conducted.

Under normal circumstances, if the parties concerned are Turkish, the Turkish courts shall have the jurisdiction to handle the case, and Turkish law applies. As set forth in the CLP, the court having general territorial jurisdiction is the court at the domicile of the defendant or legal person, when the lawsuit is filed. In matters relating to tort, the CPL further regulates that at lawsuits arising from tort, the court at the place where the tort is committed or the place where damage occurred or, depending on the damage, the court of domicile, has the jurisdiction. In the presence of a contract, the lawsuit can be filed at the court where the contract is performed. Having said that, unless the relevant subject matter is within the Turkish court’s exclusive jurisdiction; ie, employment disputes, consumer contracts etc, contracting parties can choose between the jurisdictions. In addition, such contracting parties can also choose a foreign law as the governing law. However, to choose a foreign law in cases stemming from tort, the Code on International Private and Procedural Law (IPPL) requires the existence of a foreign element such as at least one party not being a Turkish citizen, that a related tort has occurred in another country, execution or performance of the contract is in another country, etc.

If the dispute in question contains a foreign element, IPPL regulates the rules on jurisdiction. Under Article 34 of the IPPL, obligations arising from torts are governed by the law of the country where the tort was committed. If the related damage and the action causing the effect occurred in different countries, the law of the country where the damage occurred applies.

Law No 4054 does not set out any specific rules on the limitations of claims for damages arising from competition law violations. However, the COO specifically defines different limitation periods for disputes arising from contracts and torts. Article 72 of the COO outlines three separate limitation periods for torts that also apply to compensation claims at private antitrust litigation in Turkey: (i) two years after the time the claimant becomes aware of the damage and the person(s) liable therefor; and (ii) ten years after the date of the infringement. However, if the compensation stems from an act that requires a longer limitation period as per the criminal law, such limitation period shall apply. As regards to competition law violations arising from contracts, Article 146 of the COO foresees a ten-year limitation period.

Having said that, the Court of Cassation has adopted an eight-year limitation period on the basis of the longer limitation periods foreseen in cases where the damage claim stems from an act which requires a longer limitation period as per the criminal law, in tort claims. Considering that the Law No 5326 on Misdemeanours envisages an eight-year limitation period, and the criminal characteristics of the administrative fines imposed by the TCA, in practice, the Court of Cassation has extended the period foreseen in tort claims, by its precedents. In addition, as also set forth by the Court of Cassation’s precedents, the limitation period shall start once the complaint is filed to the TCA (see judgments of the 11th Chamber of the Court of Cassation dated 1.07.2019 and numbered 2019/1672 E., 2019/5015 K., dated 30.03.2015 and numbered 2014/13296 E.,2015/4424 K., dated 27.10.2015 and numbered 2015/3450 E., 2015/11139 K).

Prior to the trial, there are no discovery tools that allow parties to get information about any non-privileged information that is related to their claims or defences. However, in accordance with Article 16 of the CPL, during the preliminary examination hearing the court provides the parties a timeframe of two weeks, which cannot be extended, to present any further evidence.

Attorney-client privilege is not explicitly recognised in the Turkish legal system. It is directly linked to the right to a fair trial under the European Convention on Human Rights (ECHR). The ECHR and other international conventions to which Turkey is a party make this principle applicable.

The provisions of the CPL govern the court’s actions during the trial, rather than the TCA’s procedural regulations. Accordingly, the Turkish courts must ensure that sufficient safeguards are in place to protect legal privilege, including documents and electronic communications. The claimant has no right to demand the defendant to provide evidence on correspondence between itself and the lawyers.

The parties may request the court to keep confidential documents in the court’s secure lockers. According to CPL Article 161/2, examination of, or access to, confidential papers requires the explicit authorisation of the court. The courts have the authority to order any party or third party to submit case-related papers or to seek any such documents from the TCA’s file.

There isn’t any provision that provides protection of such agreements with competition authorities from disclosure. To the best of the authors’ knowledge, neither is there any precedent on this. Still, it would be recommended to request confidentiality for the leniency and settlement agreements for the purpose of the protection of business secrets. Please see 5.2 Legal Professional Privilege for more information.

In the Turkish private law, as per regulated under the CLP, the general principle is that the judge cannot obtain evidence ex officio, but instead the parties shall bring the evidence of any nature – ie, e-mails, WhatsApp correspondence, witness statements, etc. Accordingly, the witnesses of facts submitted by the parties are relied on, however since they are regarded as “discretionary” evidence, the courts are not bound by such statements.

Turkish courts accept both written and oral witness statements; when a judge directly questions a witness during a cross-examination; no third party is permitted. During the proceedings however, the attorneys of the parties are free to ask questions of the witness as long as they don’t disrupt the courtroom’s order – which as per Article 152 of the CPL – they can only do so through the judge.

Similar to witness statements, expert evidence is allowed, but it is regarded as “discretionary” evidence. Depending on the court’s discretion, an appointed expert informs the court about the subject at hand and provides the findings of their research verbally or in writing. Experts may be chosen from the court’s registry of sworn experts and appointed by the court, typically ex officio and occasionally at the request of the parties. The parties are also able to offer expert opinions. However, the court generally tends to rely on the reports of court-appointed experts.

The damage incurred as a result of a competition law violation can be demonstrated by any evidence, depending on the case at hand, since the general principles of tort set forth in the COO apply. However, Article 58 of Law No 4054 sets forth a calculation method specific for cartel cases.

Indeed, as per the relevant clause, the injured parties may claim the difference between the price they paid and the price they would have paid if the competition had not been restricted. The same article also sets forth that, in the calculation of the damage incurred by the competitors, all profits that such undertakings expect to obtain will be calculated by considering the balance sheets of the previous years. Assessment of damage suffered by competitors is based on the profit that is deprived. Therefore, the calculation of the losses of the undertakings is based on the difference between the current amount of the undertakings’ assets and the amount they would have reached if the competition had not been restricted.

As outlined above in 2.1 Legal Basis for a Claim, Law No 4054 sets forth a distinctive provision of the rule of triple damages. Accordingly, if the damage is caused by the “agreements” or “decisions” or “severe negligence” of the undertakings concerned, the judge may, upon the request of the injured parties, award compensation for up to three times the material damage suffered, or the profits obtained or likely to be obtained by those who caused the damage. When the wording of the clause is observed, it is seen that such request of triple compensation is at the judge’s discretion since it is explicitly regulated that the judge “may” award such compensation at the party’s request.

Please see 2.4 Burden and Standard of Proof.

As of the date of the relevant violation, damages resulting from competition law violations may be subject to interest claims. Direct default interest shall apply to such a request, but not contractual interest since there is no contract between the parties in tort. Default interest is determined by Law No 3095 on Legal Interest and Default Interest, which is applied by reference of Article 88/1 of the COO.

Article 57 of Law No 4054 stipulates that the parties who violated the competition law are jointly and severally liable if the damage results from the behaviour of multiple persons. In other words, the party who suffered losses has the right to seek compensation from any defendant – individually or collectively. In parallel with the provision of Law No 4054, Article 61 of the COO sets out that if more than one person causes damage together or is responsible for the same damage for various reasons, the provisions on joint and several liability shall prevail.

There is no rule that makes an exception for leniency applicants for potential private damages claims.

As explained in 8.1 Joint and Several Liability, the claimant may recover full damages from any of the defendants, and not against every person contributing to the damages caused. As per Article 62 of the COO, in allocating the compensation among the jointly and severally liable persons responsible for the same damage, all circumstances and conditions, in particular the gravity of the fault attributable to each of them and the intensity of the danger created by them, shall be taken into account.

The person who pays more than his share of the compensation shall have the right of recourse against the other jointly and severally liable party for the excess payment and shall be subrogated to the rights of the injured party. Hence, the courts will decide whether a defendant has paid more than their part of the injury, so that it may recover partial reimbursement from the other defendants. If the defendant has the right to recourse, then the court will also determine the amount for which each defendant is liable. In establishing these sums, the court considers the degree of severity of the fault committed by each defendant and its eventual effect.

Pursuant to the provisions set forth in Articles 389–399 of the CPL, an injunctive relief may be granted in cases where it is concerned that obtaining the right will become significantly difficult or completely impossible due to a change in the current situation, or that an inconvenience or serious damage will arise due to delay. With this method, the legislature ensures that the existing situation does not change to the detriment of the parties until the decision on the dispute is rendered.

As a general rule, an injunctive relief can be obtained by addressing the request to the court. The party who will file a lawsuit may request an interim injunction before the lawsuit is filed, or together with the lawsuit petition. Subsequent to the filing of a lawsuit, both parties may request an interim injunction, provided that they have legal interest.

If there is a possibility of damage to the requestor in the intervening period in the event that the other party is notified (for example, if there is a risk that the other party may make attempts to neutralise the measure), the interim injunction may be ruled without notifying the other party or holding a hearing. The judge may decide to hold a hearing if they are in doubt as regards the request of the requestor and especially if there is no risk of the other party’s behaviour that would make the measure ineffective.

Pursuant to Article 397/2 of the CPL, the injunctive relief shall continue until the finalisation of the final judgment. However, the court may also rule that the interim injunction will be withdrawn, in its decision on the merits.

Turkish law has undergone some changes in recent years to support alternative dispute resolution mechanisms including arbitration and mediation. Arbitration proceedings are admissible on the condition that parties have agreed to an arbitration clause. Alternative dispute resolution can be utilised to save time in resolving conflicts.

As there hasn’t been a precedent issued to date, it is still unclear whether alternative dispute resolution is an option for follow-on or standalone claims. The current public interest in competition law violations leads to the necessity for precedent, noting that the TCA has exclusive authority over enforcement subjects such as granting exemptions or merger controls.

In Turkey, there are no rules that forbid other parties from funding legal proceedings. Although uncommon in practice, it is theoretically possible to file an action funded by a third party to minimise the associated financial risks.

Third-party funders are not accountable for the fees incurred by other parties since only the parties to the case may be held liable for the costs incurred as a result of the lawsuit initiated.

An appeal against the ruling of the civil court of first instance may be made based on substantive, factual or procedural issues. The CPL allows for appealing the first instance court decisions to the Regional Courts of Appeal and ultimately to the Court of Cassation. However, one can file an appeal based on errors of law, fact or process before the Regional Court of Appeal.

On the other hand, the TCB’s final decisions, measures and fines can be challenged before the administrative courts, while interim decisions cannot be subject to annulment proceedings. The competent court of the first instance against the TCB’s decisions is the Ankara administrative court. The judgments might be appealed to the Ankara Regional Administrative Court, while the Council of State is the final degree in appeals.