In recent years, labor markets have become a key focus area for both the Turkish Competition Authority (“TCA”) and other competition authorities worldwide. These authorities closely scrutinize practices and agreements between competing undertakings in labor markets. The Turkish Competition Board’s (“Board”) decision dated 07.09.2023 and numbered 23-41/796-280 (“Doğuş Decision”) is particularly significant as it examines the practice of a supplier granting base salary recommendations to authorized resellers within a vertical relationship.
The case at hand involves an application submitted by Doğuş Otomotiv Servis ve Ticaret A.Ş. (“Doğuş”), seeking a negative clearance/exemption from the Board for its practice of recommending base salaries above the industry average to its authorized resellers, with variations based on regions and provinces.
The Doğuş decision, which also includes a detailed sector analysis, shows that the application was assessed from various perspectives and contains important findings.
In the decision, during the examination of the relevant product market, it was noted that the application concerned a large number of personnel with different job titles. Consequently, the relevant product market was defined as the “labor market in automotive sales and after-sales services.” In this context, unlike previous Board decisions that considered undertakings operating in different sectors as competitors in the labor market, the Doğuş decision defined a narrower labor market. The relevant geographic market was determined as “Türkiye,” since the application could potentially impact employees employed by Doğuş’s authorized resellers across the country.
The assessment in the decision stated that the practice in question is specific to the vertical relationship established between Doğuş and its authorized resellers through sales and after-sales services, and therefore, it should be examined within the scope of Communiqué No. 2002/2 on Block Exemption in Vertical Agreements (“Communiqué No. 2002/2”). Within this framework, the theoretical approach to resale price maintenance, one of the most frequently discussed topics in competition law concerning vertical relationships, was applied to the case at hand. The assessment also considered the freedom granted to suppliers to set “maximum prices” or “recommended prices” for buyers under Communiqué No. 2002/2, and evaluations were made in the context of wage-setting agreements.
Based on the legal framework above and the data collected during the investigation, the Board concluded the following:
Doğuş’s market share in the labor market for four job families within automotive sales and after-sales services—sales management, service operations, spare parts, and management and operational support—was below 20%, which is under the 30% threshold set by Communiqué No. 2002/2.
Due to the salary differences between Doğuş and its authorized resellers, as well as among the authorized resellers themselves, the risk that the base salaries recommended by Doğuş would be taken as a reference by the authorized resellers was low.
The practice subject to the negative clearance/exemption request facilitates access to qualified personnel and independent wage reports, is of a guiding nature, and authorized resellers independently determine their wage policies for their employees.
In light of these assessments, the Board decided not to grant a negative clearance certificate for the practice in question but determined that the application could benefit from a block exemption under Communiqué No. 2002/2.
In conclusion, the Doğuş decision has secured its place among the significant precedents in the Board’s history. This decision clarified that labor market practices can also be considered within the framework of vertical relationships and that the recommendation of wages by the supplier can benefit from a block exemption. The subject and its implementation principles are anticipated to gain further clarity through the secondary legislation studies on labor markets conducted by the TCA.
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