Turkish Competition Board’s OPET resale price maintenance decision annulled

In March 2020, the Turkish Competition Board (TCB), the decision-making body of the TCA, imposed unprecedented fines of around TRY1.5 billion on BP Petrolleri A.Ş. (BP), OPET Petrolcülük A.Ş. (OPET), Petrol Ofisi A.Ş. (PO), and Shell & Turcas Petrol A.Ş. (Shell). 

The TCB’s decision has now, however, been overturned by the administrative court. The court found that the TCB failed to demonstrate that the required standard of proof was met. 

Fines imposed on OPET despite TCA recommendation

During the investigation, the TCA compared the daily ceiling prices announced by the petroleum companies with the sales prices applied by distributors. It concluded that, in the vast majority of cases, the distributor’s sales prices matched the ceiling prices recommended by BP, OPET, PO and Shell. 

The TCA also relied on several communications between BP, PO, Shell and their distributors obtained during the dawn raids that it concluded that it gave rise to competition law concerns. 

However, during the investigation the TCA did not identify any OPET correspondence that indicated resale price maintenance. The TCA was therefore not able to support the similarities between the ceiling prices and the sale prices with any evidence of communications by OPET. On this basis, the case team recommended that the TCB should not impose any fine on OPET. 

However, the TCB chose to take a different approach. It decided to impose a record fine on OPET together with BP, PO and Shell. TCB asserted that OPET failed to put forward any economic or rational justification that would demonstrate that the price similarities were not the result of OPET’s incentives or intervention.

Administrative court rules insufficient evidence of OPET infringement

The administrative court dismissed the annulment actions initiated by BP and PO. But it upheld OPET’s appeal. In doing so it confirmed the required standard of proof for competition law infringements. The court underlined that the TCB’s findings with regard to dictating/imposing the sales price must be conclusively proven beyond any doubt. It found that the TCB’s findings were based on assessments of hypothetical situations and not on material evidence. Accordingly, the court ruled that the fact that the dealers’ resale prices were similar to OPET’s recommended prices was not enough to find an infringement of competition law. 

Interestingly, the court also ruled that the execution of the TCB’s decision should be stayed. Stay of execution actions are only upheld in cases where execution of the relevant administrative act (here the TCB decision) is likely to cause serious and irrevocable damage, and if the act is likely to be considered illegal. In practice, the administrative courts order a stay of execution in only a limited number of cases. Here, however, the administrative court found the amount of the fine imposed on OPET (TL 433,932,124.60) is sufficient to qualify as irrevocable damage.

Standard of proof in the spotlight

The OPET decision is yet to be finalized after the first appeal before the Regional courts and the final appeal before Council of State. But considering the recent judgments of the administrative courts on TCB decisions (eg Henkel and 12 Banks decisions), it is fair to say that the required standard of proof will be a hot topic in Turkish competition law practice going forward.