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A Decision on Abuse of Dominance: The Turkish Competition Board’s Assessment on the Conflict of Law on Intellectual and Artistic Works Law and the Competition Law in the light of Data Portability Restrictions
Background Set out by the Board
As for the background to the case, the Board firstly explained the business model of Nadirkitap. The Board stated that Nadirkitap provided services to numerous undertakings that sell second-hand books which it has a contractual relationship with up-to-date data through its website, in return for a membership fee and commission from their sales. The Board stated that Nadirkitap did not sell second-hand books under its own name and account, and only was an intermediary platform.
The Board provided insight on the supply chains of new edition books and second-hand books. As for the new edition books, the chain simply included a provider, distributor, and sellers which could be traditional sales points such as bookstores; as well as websites providing services through online channels, in addition to those who are active in both the traditional and online channels. Apart from this categorization, the Board also highlights that essentially there were platform service providers in the market who did not record sales to their own name and account, but rather mediated book sales such as Nadirkitap.
On the other hand, as for the second-hand books, the Board stated that the supply chain of a second-hand book which has been through the steps mentioned above as a former new edition book starts with its sale to a second-hand bookseller by the first owner. The Board highlights that despite there being second-hand book stores and second-hand bookseller centers, recently second-hand booksellers have been shifting their activities into online channels and most of them opt to sell their products online through mediatory service providers, such as Nadirkitap.
Assessment and findings of the Board
(i) Assessment on the Relevant Market
In line with its previous precedents, the Board emphasizes that for a violation within the meaning of article 6 of the Law No. 4054 on the Protection of Competition (“Law No. 4054”), the undertaking concerned shall enjoy dominance and the behaviors of the undertaking concerned subject to the investigation shall amount to abuse. [2] In order to evaluate the dominant position of Nadirkitap, the Board first conduct an analysis of the relevant product market. [3]
Considering that the behaviors subject to the complaint occurred within the scope of online sale of second-hand books, and a large part of Nadirkitap's activities consisted of second-hand book sales, the Board emphasized that the milestone of the relevant market definition was sale services of second-hand books through online platforms. In its evaluation, by taking both supply and demand side substitution into consideration, the Board evaluated the substitution relationship from four different perspectives:
Authors: Gönenç Gürkaynak, Esq., Betül Baş Çömlekçi, Ece Şengül and Uğur Gönül, ELIG Gürkaynak Attorneys-at-Law
(First published by Mondaq on August 23, 2022)
[1] Decision of the Board dated 07.04.2022 and numbered 22-16/273-122 (“Decision”). [2] These conditions are sought cumulatively for a behavior to amount abuse of dominance under Turkish competition laws. As per the precedents of the Board, where the absence of one of these fundamental factors may be demonstrated, the Authority may choose not to perform an analysis concerning the remaining factor. See. See Doğan Grubu (08.12.2010; 10-76/1569-604), Domino’s Pizza (04.11.2010; 10-69/1458-557), GE Jenbacher (17.11.2011; 11-57/1471-528), Eureko (14.06.2012; 12-33/941-296). [3] It should be noted that, as the conditions are cumulative for the abuse of dominance violation, the Board has previous cases where the conduct itself was proven to be non-abusive, and therefore the Board opts not to analyze the relevant product market. See. Toypa (14.11.2019; 19-40/664-285), Mercedes-Benz (27.08.2018; 18-29/498-239), Bilsing (14.12.2017; 17-41/642-281). [4] See. Yemeksepeti (09.06.2016; 16-20/347-156), Booking (05.01.2017; 17-01/12-4), Sahibinden (01.10.2018; 18-36/584-285),
- Whether new edition book sales are substitutable with second-hand book sales,
- Whether second-hand book sales through traditional channels are substitutable with the second-hand book sales through online channels,
- Whether book sales through e-marketplace platforms are substitutable with the activities of the undertakings that are selling through online channels to their own name and account
- Whether e-marketplace platforms that sell books in addition to other various products are substitutable with the e-market platforms that only books.
Authors: Gönenç Gürkaynak, Esq., Betül Baş Çömlekçi, Ece Şengül and Uğur Gönül, ELIG Gürkaynak Attorneys-at-Law
(First published by Mondaq on August 23, 2022)
[1] Decision of the Board dated 07.04.2022 and numbered 22-16/273-122 (“Decision”). [2] These conditions are sought cumulatively for a behavior to amount abuse of dominance under Turkish competition laws. As per the precedents of the Board, where the absence of one of these fundamental factors may be demonstrated, the Authority may choose not to perform an analysis concerning the remaining factor. See. See Doğan Grubu (08.12.2010; 10-76/1569-604), Domino’s Pizza (04.11.2010; 10-69/1458-557), GE Jenbacher (17.11.2011; 11-57/1471-528), Eureko (14.06.2012; 12-33/941-296). [3] It should be noted that, as the conditions are cumulative for the abuse of dominance violation, the Board has previous cases where the conduct itself was proven to be non-abusive, and therefore the Board opts not to analyze the relevant product market. See. Toypa (14.11.2019; 19-40/664-285), Mercedes-Benz (27.08.2018; 18-29/498-239), Bilsing (14.12.2017; 17-41/642-281). [4] See. Yemeksepeti (09.06.2016; 16-20/347-156), Booking (05.01.2017; 17-01/12-4), Sahibinden (01.10.2018; 18-36/584-285),