Hygienic Caps Remained with TUBORG

On October 13, 2015 the Turkish Competition Authority (“TCA”) completed its preliminary investigation triggered by the Efes’ complaint in which the TCA investigated whether Ecocaps has restricted competition by allegedly not selling eco-friendly and hygienic caps packing systems to any beer producers in Turkey other than Tuborg. In the complaint, Efes claimed that Ecocaps holds 100% market share and abuses its dominant position in the eco-friendly and hygienic cap packing systems market by refusing Efes’ demands on the basis of the exclusivity clause between Ecocaps and Tuborg.

The TCA reached a conclusion that the allegation regarding Ecocaps’ 100% market share in the relevant market was not accurate due to the existence of three other systems which are alternative to the hygienic cap systems. After the evaluation of this allegation, the TCA examined one of the three necessary conditions in order to determine that there is a breach of competition rules due to the refusal to deal, namely “the service or product must be indispensable or essential for competitors to compete in the sub-market”. Considering  Efes’ high market share, the TCA determined that not being able to purchase the concerned cap systems by Efes for a certain time period was not reasonably possible to create a foreclosing effect on the market. Additionally, from the fact that more than half of the sales in the beer market originate in the segments out of the mentioned cap systems applications, it is determined that the products in this field are not affected by any practices regarding caps systems.

Furthermore, the TCA evaluated that it is not possible to argue that the current behavior restricts the competition in the market or decreases the consumer welfare. On the contrary, the TCA determined that the dimension of competition has extended and consumers have met a different qualification regarding the relevant product by means of the cap systems. As a conclusion, the supply of the Ecocaps’ cap systems was not essential for Efes to compete and thus the first one of the cumulatively required conditions for the refusal to deal does not exist. Therefore, it is concluded that the practices which are subject of the complaint could not be considered as abuse of dominant position by refusing to deal.

Finally, the TCA decided that the agreement between Ecocaps and Tuborg containing an exclusivity clause does have restrictive effect on competition according to Article 4 of the Law on the Protection of Competition; however, as the agreement meets all the conditions set forth under Article 5 of the Law on the Protection of Competition, it could benefit from the individual exemption.