The investigation conducted by Turkish Competition Authority against certain undertakings to determine whether they violated Article 4 of the Law No. 4054 on the Protection of Competition by entering into gentleman's agreements not to recruit each other's employees in the labor market was completed.

The Turkish Competition Authority has imposed administrative fines on giant companies for having entered into gentleman's agreements in labor markets.1

The investigation started with the Board's decision in April 2021 and was expanded with a decision in December 2021. Oral defenses were held in July 2023.

In the course of the investigation, it was examined whether the undertakings party to the investigation had entered into agreements to prevent the employment of each other's employees and to restrict employee mobility. These agreements are based on employers' mutual renunciation of competition over labor, which is one of the most important inputs.

According to the official announcement made by the Authority on its webpage on August 2, 2023, "In addition to reducing the mobility of the labor factor across undertakings, employee non-poaching agreements may also artificially depress the real value of wages. As a result, inefficiency in the allocation of employees may arise and the competitive structure in labor markets may be damaged."

Within the framework of the aforementioned issues, the investigation process was terminated with a settlement for 11 undertakings within the scope of the investigation.

As per the investigation report, information collected throughout the investigation, additional opinion, written and oral defenses; TCA decided that the following undertakings violated the Article 4 of the Act No 4054 (which is an article closely modeled on Article 101 of the TFEU) imposed an administrative fine on the following undertakings based on their annual turnover for the year 2021:

(To find the Euro equivalent of the fines, please kindly note that today's Euro/TRY exchange rate is approx. Avro 1=TRY 30)

  1. Arvato Lojistik Dış Ticaret ve E-Ticaret Hizmetleri AŞ: 2.159.522,60 TRY
  2. Bilge Adam Yazılım ve Teknoloji Anonim Şirketi: 2.183.227,89 TRY
  3. Binovist Bilişim Danışmanlık A.Ş.: 49.831,55 TRY
  4. Çiçeksepeti İnternet Hizmetleri A.Ş.: 517.883,20 TRY
  5. D-Market Elektronik Hizmetler ve Ticaret A.Ş.: 4.834.124,55 TRY
  6. Flo Mağazacılık ve Pazarlama A.Ş.: 18.021.702,86 TRY
  7. Koçsistem Bilgi ve İletişim Hizmetleri A.Ş.: 6.513.239,09 TRY
  8. LCWaikiki Mağazacılık Hizmetleri Ticaret A.Ş.: 59.590.457,10 TRY
  9. Sosyo Plus Bilgi Bilişim Teknolojileri Danışmanlık Hizmetleri Ticaret A.Ş.: 1.094.131,66 TRY
  10. TAB Food Industry and Trade Co: 7.293.869,36 TRY
  11. Turk Telekomünikasyon A.Ş.: 41.022.658,16 TRY
  12. Veripark Software Inc: 1.116.070,57 TRY
  13. Vivense Teknoloji Hizmetleri ve Ticaret A.Ş.: 1.218.089,30 TRY
  14. Vodafone Telekomünikasyon A.Ş.: 5.319.292,25 TRY
  15. Zeplin Yazılım Sistemleri ve Bilgi Teknolojileri A.Ş.: 192,973.74 TRY
  16. Zomato İnternet Hizmetleri Ticaret A.Ş.: 20.827,94 TRY

The following companies were not imposed administrative fines, as there was no violation detected:

  1. 41 29 Medya İnternet Eğitimi ve Danışmanlık Reklam Sanayi Dış Ticaret A.Ş.
  2. Anadolu Restoran İşletmeleri Ltd. Şti.
  3. Doğuş Planet Elektronik Ticaret ve Bilişim Hizmetleri A.Ş.
  4. Etiya Bilgi Teknolojileri Yazılım Sanayi ve Ticaret A.Ş.
  5. Google Reklamcılık ve Pazarlama Ltd. Şti.
  6. Grupanya İnternet Hizmetleri İletişim Organizasyon Tanıtım ve Pazarlama A.Ş.
  7. Havas Worldwide İstanbul İletişim Hizmetleri A.Ş.
  8. İş Gıda A.Ş.
  9. Logo Yazılım Sanayi ve Ticaret A.Ş.
  10. Meal Box Yemek ve Teknoloji A.Ş.
  11. Migros Ticaret A.Ş.
  12. Mobven Teknoloji A.Ş.
  13. Mynet Medya Yayıncılık Uluslararası Elektronik Bilgilendirme ve Haberleşme Hizmetleri A.Ş.
  14. Net Consultancy Education and Trade Ltd. Şti.
  15. Noktacom Medya İnternet Hizmetleri San. ve Tic. A.Ş.
  16. NTV Radyo ve Televizyon Yayıncılığı A.Ş.
  17. Peak Oyun Yazılım ve Pazarlama A.Ş.
  18. Pizza Restaurantları A.Ş.
  19. Sahibinden Bilgi Teknolojileri Pazarlama ve Ticaret A.Ş.
  20. Valensas Teknoloji Hizmetleri A.Ş.
  21. Green Valley Agriculture Food Co.

The reasoned decision has not yet been published. Based on the Turkish Competition Authority's common practice, we estimate that the reasoned decision will be published within 10-12 months from now on.

The importance of this decision:

  • It revealed that undertakings that do not operate in the same market can be seen as competitors in labor markets and that cartel-like agreements may exist between them, as the sectors in which the companies party to the investigation operate:
    • e-trade
    • advertising
    • internet search services
    • information technologies
    • telecommunications
    • software
    • food & agriculture
    • restaurant
    • retail
    • FMCG
    • textile
    • furniture
    • transportation
  • The Competition Authority has once again demonstrated that it is authorized to examine labor markets.
  • The Competition Authority is expected to put labor markets under closer scrutiny following this decision.
  • The decision demonstrated that competition lawyers should work closely with companies' human resources departments as well as in-house lawyers.
  • It remains to be seen whether workers who are harmed by wage fixing and non-poaching agreements will exercise their private law rights to compensation (up to three times the damages suffered). Especially for undertakings that conclude the process with a settlement, it is a matter of curiosity how the compensation rights arising under private law will be exercised, since there is an acceptance of the infringement.

Footnote

1. https://www.rekabet.gov.tr/tr/Guncel/isgucu-piyasasina-yonelik-centilmenlik-a-eabd47edff30ee118ec500505685da39 , Access Date: August 3, 2023.

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