Last week, the Turkish Competition Board (“Board”) has published the reasoning of its decision dated 16.12.2021 and numbered 21-61/858-423 (“Decision”) regarding the application submitted by BSH Ev Aletleri Sanayi ve Ticaret A.Ş. (“BSH”) with a negative clearance/exemption request for the prohibition on the sales of its authorized distributors which they make through online market places. Differently from the previous decisions of the Board, which were issued concerning internet sales in general; the Decision constitutes a landmark case as it directly investigates the sales made through online marketplaces. In this regard, remarkable points of the Decision are summarized below.
The Board decided that the circular subject to the application breaches the “equivalence principle” provided by the Guidelines on Vertical Agreements and the circular can be described as the restriction on active and passive sales, therefore it cannot benefit from the block exemption. The Decision evaluates that
· BSH’s explanations regarding the efficiency gains do not serve for prevention of free riding and the purpose of protecting the efficiency of the distribution system and brand image,
· Restrictions of sales made through online marketplaces are far away from ensuring consumer benefit in today’s world, where shopping on the internet is widely preferred,
· Full restrictions on the sales of authorized distributors on the online platforms may decrease intra-brand and inter-brand competition, prevent entrances to the market, prevent authorized distributors from accessing important parts of the internet channel and negatively affect the competition as it may distort the competition in the market against relatively small and weak undertakings,
· There are alternative ways for BSH to reach the goal of circular and mentioned prohibition may also make it easy for BSH to control the resale prices of its authorized distributors
and concluded that the circular subject to the application cannot be entitled to individual exemption.
It was also stated in the Decision that restrictions of “prohibition on active sales to end users”, “exclusive customer allocation” and “exclusive purchasing agreement” which are imposed to selective distribution system members by the distributorship agreement cannot benefit from group exemption and individual exemption. On the other hand, the Decision also concluded that the restriction regarding the “condition of obtaining prior permission from BSH for online sales” cannot benefit from group exemption.