1. Background
With its decision dated 8 December 2022 and numbered 22-54/833-343, the Turkish Competition Authority ("TCA") rendered a decision regarding the banking sector. The decision concerns the preliminary investigation ("Pre-Investigation") on whether the relevant practice of a bank violated Law No. 4054 on the Protection of Competition ("Law No. 4054").
The Pre-Investigation was initiated following a complaint alleging that certain banks active in debit and credit card issuance in Türkiye violated Law No. 4054 by preventing payment institutions from accessing their POS services and engaging in various exclusionary practices. In this context, the TCA assessed whether the relevant bank violated Art. 4 of Law No. 4054 by imposing customer restriction on payment institutions.
As a result of the Pre-Investigation, the TCA considered that the relevant bank's practice fulfilled all the conditions of individual exemption stipulated in Art. 5 of the Law No. 4054 and, thus, granted individual exemption for this practice. Accordingly, the TCA decided that there was no need to launch a full- fledged investigation against the relevant bank.
2. The TCA's assessment
The complainant submitted to the TCA a correspondence between the relevant payment institution's employee and the relevant bank's employee, where the payment institution's employee requested that the relevant bank activate the POS assigned to the merchant with an agreement. However, the relevant bank responded negatively to this request on the grounds that it had already been providing POS services to the relevant merchant and the relevant merchant was excluded from the list of merchants whose POS access would be activated for processing. The TCA considered that this correspondence might raise doubt that the relevant bank violated Art. 4 of Law No. 4054 (prohibiting anticompetitive agreements) by preventing a payment institution from providing POS services to merchants to which the relevant bank directly provides these services.
The TCA considered that there was a vertical relationship between banks (suppliers) and payment institutions (buyers) for the provision of POS services. As a consequence, payment institutions are required to procure POS integration infrastructure services from banks to provide payment services to merchants. Based on the information provided within the file, the TCA noted that the relevant bank's development tests for the relevant technical infrastructure would be completed in January 2023.
The TCA assessed that the relevant bank's preventing a payment institution from providing POS services to some merchants to which the relevant bank provides POS services directly constituted interference with the resellers' sales terms and this falls within the scope of Art. 4 of Law No. 4054. In this scope, the TCA first assessed whether this conduct benefits from the block exemption under Block Exemption Communiqué No. 2002/2 on Vertical Agreements ("Communiqué No. 2002/2")
2.1 Block exemption assessment
For an agreement/practice restricting the buyers' sales to customers to benefit from the block exemption under Communiqué No. 2002/2, it should mainly fulfill the following conditions cumulatively:
1. The restriction should be specific to the exclusive group of customers that the provider has allocated to itself or to another buyer.
2. The restriction only covers the buyer's active sales and does not restrict its passive sales.
In terms of the customer restriction imposed by the relevant bank, in the context of establishing the distribution network, the TCA did not determine that there was specific group of exclusive customers allocated by the relevant bank to itself or to any other buyer and that the relevant restriction covered only active sales. Accordingly, the TCA concluded that the customer restriction imposed by the relevant bank did not benefit from the block exemption under Communiqué No. 2002/2. In this regard, the TCA continued with an individual exemption analysis for the relevant conduct.
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