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 Levels of competition Authority (“TCA”) for a long time. In this sense, the TCA performed an investigation (“Investigation”) concerning the allegations that some undertakings operating in the very first-hand and next-hand automotive marketplaces violated Law. No. 4054 on the Security of Level of competition (“Level of competition Regulation”) by means of stockpiling and increasing the car price ranges collectively.

The reasoned choice concerning the Investigation (“Final decision”) [1] was not long ago released on the TCA’s formal web site. As a consequence of the Investigation, the Opposition Board (“Board”) resolved that as the parties to the Investigation did not stockpile and increase the auto price ranges together by means of exchanging competitively sensitive details in the appropriate markets, there was no room for any administrative great for them.

In this regard, the prominent assessments of the Board in the Final decision will be brought to your awareness within just this post. In just this scope

  • to start with, the normal evaluations of the Board on the allegations of violations in the 1st-hand automotive marketplace and the 2nd-hand automotive current market relating to all undertakings that are celebration to the Investigation will be incorporated,
  • subsequently, the allegedly competitively sensitive data exchange happened between 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 relating to the allegations claimed in the Investigation Report organized for the duration of the Investigation system that the competitively sensitive information trade transpired among Borusan Otomotiv İthalat ve Dağıtım A.Ş. [4] (“Borusan”) and Volvo Motor vehicle Turkey Otomobil Ltd. Şti. (“Volvo”), on which the Investigation Committee modified its impression with the Added Prepared Belief and concluded that there was no violation, will be presented.

 

Insufficient Proof to Fantastic the Automotive Providers in the 1st-Hand Marketplace

In the conclusion, to assess the allegations built relating to stockpiling of very first-hand motor vehicles, firstly (i) the procurement processes of the import and domestic automobiles conducted by the distributors were examined, and then (ii) evaluations had been built within the framework of the details transmitted in response to the facts requested from the distributors. In this context, the Board highlighted that:

  • while it is witnessed that the strategic data about the rivals concerning connectivity know-how [5] was requested amid the appropriate undertakings, it is unclear from which competition, what variety of facts and as a result of which implies it was received, and there is no evidence of communication among the competition realized to attain claimed information and facts,
  • due to the fact the automotive market place in Turkey is a extremely clear industry, undertakings can evaluate the market disorders by collecting info about competition from general public sources, by employing solutions such as the secret shopper strategy [6],
  • believed information on advertising and marketing expenditure quantities of brand names and marketing price per motor vehicle are readily available as a result of the evaluation of publicly out there data and for that reason these info can not be considered competitively sensitive and
  • the influence of the Covid-19 epidemic in the very first months brought about the amount of autos developed in Turkey to virtually halt completely, and the variety of imported vehicles remained at a degree that could not reply to the boost in desire.

For these reasons, the Board concluded that the motive for the minimize in source was not caused by stockpiling.

In conditions of the claims that the successive maximize in automobile price ranges was because of to the mutual rate boost by agreement of the distributors, the Board established that motor vehicle selling prices had amplified because of to (i) the financial landscape of the nation, (ii) the detrimental effects of the Covid-19 epidemic on car creation, (iii) rising raw materials rates, (iv) the maximize in trade prices, (v) as the consumer’s inclination to auto purchases, the vehicle prices are soaring, and as a result, the inability to launch autos to meet up with the increasing desire (vi) the deterioration of the supply-desire stability, and (vii) the increase in special use tax (“SCA”) costs.

In this context, the Board concluded that there was no evidence that the distributors improved the costs together or limited the source in a way that was not based mostly on the purely natural market situations. On top of that, it was concluded that cost improves had been manufactured equally for the vehicle models subject to the problems and for the other motor vehicle versions that have been declared to be the ideal-marketing.

 

No Trade of Competitively Delicate Information in the Second-Hand Automotive Current market

In the Choice, concerning the second-hand automotive marketplace, the claims examined are:

  • the groups running in this sector these kinds of as gallery rental corporations, trigger the designs of automobiles that are now couple in the industry to get rid of their availability in the initial-hand automotive market by getting them from sellers” and
  • “After acquiring vehicles, they offer them for sale by on the net and bodily income channels, properly above the cost of the initial-hand cars.”

The Board resolved that there was no exchange of competitively delicate facts concerning the relevant undertakings owing to the adhering to causes:

  • weekly car or truck gross sales and declared car numbers are retrospective data and can be acquired from open up resources by following the tender platforms,
  • the system in concern is used as a facet sales channel and for that reason obtaining particular data about the tender is a need for the execution of the professional relationship,
  • data on selling price adjustments is not commercially strategic data, but a basic assessment of automotive corporations,
  • it is not crystal clear which manufacturer, segment, product, mileage, or products degree the info with regards to the inventory load and the selection of cars planned to be sold in the upcoming handles, and it is similar to the general stock position and gross sales tactic of the enterprise, and
  • there is no evidence that details regarding inventory, product sales targets, and comparable troubles are shared continuously, systematically and in a divided way.

 

The Information and facts Exchange involving Doğuş and PSA could not be Proved!

In the Investigation Report and Supplemental Penned Opinion, it was claimed that a immediate competitively sensitive information exchange was carried out among Doğuş and PSA since some of the correspondence made up of information and facts about PSA’s enhance in rates and profits targets had been determined in just Doğuş, and it was not possible to acquire this sort of data from a source other than the distributor. In this regard, administrative fines had been asked for equally in the Investigation Report and in the Supplemental Created Impression versus Doğuş and PSA due to the fact they violated the Competitiveness Law.

In the Choice, it was decided that facts regarding Peugeot light-weight business motor vehicles was bundled in the inside correspondence built by Doğuş on 11.03.2020 and the rate approaches planned to be executed have been talked over. The Board also said that the information and facts on Peugeot’s product sales volumes model light commercial automobiles in January and February 2020, the list selling prices as well as final responses to the shopper, possible financial loan strategies, etcetera., were being talked about to get motion on the pricing of a Doğuş gentle business model. The Conclusion, analysed the related correspondence, which includes:

  • in March, certain designs of Peugeot will be brought to Turkey,
  • Peugeot Lively 100hp motor vehicles will be brought only as fleet vehicles,
  • Peugeot Active Comfort and ease motor vehicles will not be brought in March,
  • which design Peugeot handbook automobiles will be brought to Turkey predominantly in March, and which kinds will be introduced in comparatively little figures,
  • for a selected product, Peugeot was operating on a new campaign which include a Attempt 50,000 financial loan with 12-thirty day period maturity and .69 curiosity price.

Nevertheless, the Board evaluated that the statements utilized in the correspondence had been not adequate to demonstrate the existence of communication involving Doğuş and PSA thinking about the details that:

  • no obvious source is specified in the relevant correspondence about how the competitively delicate information arrived at Doğuş workforce, and
  • it is common for undertakings to assess industry conditions by checking information about competitors obtained by way of publicly offered sources, such as the mystery shopping method.

In this context, the Board determined that it could not be proved that there was an facts exchange concerning Doğuş and PSA within the scope of the results, and accordingly there was no need to impose fines on the undertakings.

 

The Board and the Investigation Committee Parted Their Methods: Volvo and Borusan are Cleared of the Allegation of Rate Details Trade

In an inside correspondence received all through the inspection carried out within just Borusan, it was decided that Borusan staff shared inside their company the information and facts that the supply quotas of selected Volvo designs for the January-March time period have been already fatigued.

The Investigation Report concluded that Borusan and Volvo violated Write-up 4 of the Opposition Legislation because (i) the interior correspondence concerning Borusan officials was about acquiring the info that the delivery quotas for some of Volvo’s motor vehicles have been exhausted within just the scope of the tactic of growing the vehicles’ rate and (ii) Borusan ideas to abolish the campaigns to increase the income to be obtained from the sale of motor vehicles of equivalent models with Volvo. In this respect, an administrative fantastic was asked for versus Borusan and Volvo in the Investigation Report.

In this context, Borusan alleged that the facts in problem is attained from unbiased exploration businesses and by the thriller shopper strategy. On top of that, Volvo alleged that the details about automobile availability can be conveniently recognised by a buyer who would like to get a automobile, and the only way to get the information pertaining to Volvo’s inventory knowledge is not to exchange facts with Borusan. In addition, the statements made use of in the similar correspondence were not ample to clearly show the existence of any communication between Borusan and Volvo.

The written plea submitted by Borusan that the supply of the facts regarding Volvo is an impartial investigate enterprise was uncovered appropriate by the Investigation Committee, and in this respect, the Committee improved its impression in the More Created Impression and concluded that Borusan and Volvo did not violate the Level of competition Regulation. The Board stated in its Final decision that:

  • the automotive market place in Turkey is a quite clear market place and a ton of facts, including upcoming income forecasts, is frequently shared within the Automotive Distributors’ Association and the Automotive Makers Association, and
  • undertakings in the applicable marketplace are by now ready to get information and facts about market place conditions by pursuing data about rivals from public resources as a result of approaches these types of as thriller consumers.

In this regard, the accessible proof was not capable to demonstrate that Posting 4 of the Level of competition Law was violated through the exchange of information about costs in between Borusan and Volvo.

 

Summary

With the Selection, the Board concluded the Investigation, the outcome of which has been eagerly awaited by the functions to the Investigation and the full competitiveness regulation local community, without having imposing a wonderful on any undertaking. We look at that the Decision is essential in conditions of expressing the conventional of evidence foreseen by the Board towards competitively sensitive data trade.

To sum up, with the Choice, the Board underlined that:

  • to confirm the alleged competitively sensitive details trade between competitors, the supply of the information and facts shared in the inner correspondence should be involved in the pertinent correspondence or there need to be other evidence displaying this,
  • respecting the pleadings of the undertakings social gathering to the investigation, the mere sharing of information in the rival companies that the Board deems to be obtainable from publicly obtainable resources can not, by by itself, verify the existence of an infringement and,
  • there was no proof that the distributors lifted the costs at the same time or restricted the offer in a way that was not constant with the dynamics of the market place.

Even though the information is restricted to the developments explained higher than, taking into consideration the history of Turkish competitors legislation and the dynamic mother nature of the automotive industry, we foresee that the automotive sector is probably to stay on the Levels of competition Board’s radar. In this regard, we will proceed to hold you current on the present developments in the sector.

 

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[1] The Board’s final decision 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 Vehicle, Audi, SEAT, CUPRA, Škoda, Bentley, Lamborghini, Porsche, Volkswagen Commercial Motor vehicle, and Scania brands.

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

[5] Connectivity technologies can be described as one that enables a car with an World-wide-web relationship and WLAN network to converse with other web-linked factors by means of particular protocols with the help of these a link.

[6] The mystery shopper approach entails a researcher acting as a client devoid of the buyer provider staff’s awareness.