Loyalty rebates refer to rebates that are offered on condition that the customer engages in a loyal purchasing behavior, by repeatedly purchasing from the same seller and refraining to purchase from other suppliers. In other words, if the customer purchases products/services over a certain threshold in a reference period, the supplier company grants loyalty rebates to that customer.

These rebates are not considered per se illegal under either Law on the Protection of Competition No. 4054 ("Competition Law") or the Treaty on the Functioning of the European Union. The protective cloak of the Block Exemption Communiqué No. 2002/2 on Vertical Agreements also applies to arrangements containing loyalty-inducing rebates, if the company applying loyalty rebates has a market share lower than 30% (with the recent amendment in Communiqué No.2002/2 on 5 November 2021 entering into force on May 5, 2022).

However, there would be obvious risks to the competitive process in cases where the loyalty-inducing rebate schemes are applied by dominant firms, since doing so may sometimes have the unintended effect of driving competitors out of the market. Indeed, the reason behind the keen interest of the competition law discipline in rebate systems is the assumption that under certain circumstances loyalty rebates applied by the dominant companies might create negative impacts on the competition in the relevant market. Such impacts might occur particularly if the rebate system has the capacity to foreclose a significant portion of the relevant market by functioning as a single branding agreement or a de facto non-compete obligation, especially when the system is deemed as loyalty-inducing. That said, this does not necessarily mean that loyalty-inducing rebate systems are altogether prohibited. The Turkish Competition Board ("Board") does not tend to forbid implementation of rebate systems altogether, without engaging in a market analysis to assess their potential or actual foreclosing effects.

The Board, in Turkcell (Turkcell, 23 December 2009, 09-60/1490-379), condemned the defendant for abusing its dominance by, inter alia, (i) applying rebate schemes to campaign owner firms in return for using a logo stating that "Turkcellers win" ("Turkcell'liler Kazanır" in Turkish original) and (ii) refusing to offer rebates to buyers that work with its competitors. In addition, with its Doğan Yayın Holding decision, the Competition Board has condemned Doğan Yayın Holding for abusing its dominant position in the market for advertisement spaces in the daily newspapers by also applying loyalty-inducing rebate schemes (30 March 2011, 11-18/341-103).

Furthermore, in ABBOTT, the Board concluded that in order for any rebate scheme to be deemed a violation of Competition Law, it should be primarily analysed whether the relevant undertakings subject to allegations is dominant in the relevant product market or not (31 January 2013, 13-08/88-49). The Board has further decided that the relevant rebate scheme should be evaluated within the scope of aspects as increasing proportionality, retro-activeness, etc., and it should be determined whether the applied rebate scheme actually has loyalty inducing and foreclosure effects.

In 2017, the Competition Board fined Luxottica (23 February 2017, 17-08/99-42) for obstructing competitors' activities through its rebate systems in the wholesale of branded sunglasses. In a more recent decision, the Board conducted a preliminary investigation against Frito Lay Gıda San. Tic. A.Ş. to examine whether Frito Lay has abused its dominant position through, inter alia, rebate schemes and ultimately concluded that that there were no grounds or factors leading the Board to initiate a full-fledged investigation against Frito Lay in connection with its rebate systems (12 June 2018, 18-19/329-163).

In Unilever (18.03.2021; 21-15/190-80), the Board found that Unilever was applying additional discounts to sales points where the number/size of Unilever fridges was increased although the turnover generated from the sales in these points decreased. The Board assessed that the increase in the number/size of Unilever fridges in the traditional sales points where there exist limitations in terms of physical capacity would lead to de facto exclusivity. Accordingly, the Board stated that Unilever was aiming to exclude competitors from these sales points in order to obtain exclusivity. The Board also decided that this practice has the effect of restricting competition after analysing Unilever and its major competitors' average revenue per sales point, average discount per sales point, the ratio of discount to revenue and total discount expenditure. The Board found that Unilever's competitors were only able to reach a limited amount of the sales points, they were losing a significant amount of their shares in the sales points as they were forced out of many of said sales points. The Board also noted that because Unilever products are viewed as "must stock" products, even an exclusivity clause valid for only one-year may lead to market foreclosure. Therefore, the Board concluded that the discounts applied in the traditional channel have the object and effect of obstructing competition, and Unilever abused its dominant position in the relevant markets and infringed Article 6 of Competition Law.