The Impact Of Competition Board Decisions On Compensation Cases

INTRODUCTION

Pursuant to Articles 57 and 58 of Act No. 4054 on the Protection of Competition ("Act"), those who suffer damages due to a competition infringement may seek compensation for the damages they have incurred. Should the damage arise from an agreement, decision or gross negligence of the parties, the judge may, upon the request of the aggrieved party, award compensation by three fold of the material damage incurred or of the profit obtained or likely to be obtained by the those who caused the damage. Those claiming to have suffered damages due to a competition infringement may assert their claims for compensation through a lawsuit brought before civil courts. In these compensation cases, claims are evaluated within the framework of the tort provisions of the Turkish Code of Obligations No. 6098. In this context, the plaintiff must prove the unlawful act, the causal link, the damage, and the existence of fault. At this juncture, this article will assess the general impact of Competition Board ("Board") decisions on compensation cases and specifically their influence on the proof of the unlawful act.

THE RELATIONSHIP BETWEEN THE COMPETITION BOARD DECISIONS AND THE PROOF OF UNLAWFUL ACT IN COMPENSATION CASES AND THEIR TREATMENT AS A PREJUDICIAL ISSUE

As aforementioned, in compensation lawsuits arising from the Act, the principle of tort liability is applied. In lawsuits based on tort liability, the plaintiff is required to prove the unlawful act, the damage, the causal link, and the fault of the perpetrator. At this juncture, in lawsuits filed pursuant to the Act seeking compensation for damages arising from a competition infringement, it is crucial for the plaintiff to prove the existence of the "unlawful act" through a finalized decision of the Board. Indeed, it is not sufficient for the plaintiff to merely rely on a Board decision identifying the infringement; the Board's decision must have attained finality for the element of unlawfulness to be considered proven.

Upon examination of the precedents of the Court of Cassation, it is observed that for the proof of the element of unlawfulness, the mere existence of the Board's decision is insufficient; in addition, the finalization of the decision is required. Moreover, decisions of the Board that have not attained finality are treated as prejudicial issues. This is elucidated in the decision of the 13th Civil Chamber of the Court of Cassation dated 25.09.2019, numbered 2019/1422 E. and 2019/8836 K., wherein it was stated:

"In the present case, the claims regarding the existence of the defendant's unlawful act, the occurrence of damage due to this act, and the causal link between the defendant's acts and the damage are based on the aforementioned decision of the Competition Board. However, considering that a lawsuit for the annulment of the said decision has been initiated by the defendant and the judicial process is ongoing, it is understood that there is no finalized judicial decision to support the plaintiff's claims. In this situation, the court should have treated the lawsuit filed against the Competition Board's decision as a prejudicial issue and rendered a decision based on the outcome of that case, rather than deciding on the merits of the case with the given reasoning, which is procedurally and legally flawed."

Thus, it has been adjudicated that a Board decision which has not attained finality should be treated as a prejudicial issue in the context of a claim for damages case. Similarly, in the decision of the 11th Civil Chamber of the Court of Cassation dated 13.04.2015, numbered 2015/15 E. and 2015/5128 K., it was stated that the result of the appeal to the Council of State regarding the Board's decision must be awaited:

"In this situation, the court shouldawait the result of the appeal to the Council of State Administrative Litigation Chambers concerning the plaintiff's complaint that the defendant acted in violation of Act No. 4054 on the Protection of Competition, and the statute of limitations defense raised by the defendant should be assessed in accordance with the aforementioned provisions. For this reason, court's ruling to dismiss the case on the grounds that the statute of limitations had expired, without considering these aspects, was deemed incorrect and necessitated reversal."

Furthermore, it is evident that the Board decision relied upon by the plaintiff in the compensation lawsuit must identify an infringement. Additionally, the material and temporal elements of the Board's decision are binding upon the courts in compensation lawsuits. For instance, in the decision of the 11th Civil Chamber of the Court of Cassation dated 21.09.2023, numbered 2022/1556 E. and 2023/5195 K., the appeal was dismissed on the grounds that the Board's finding of infringement did not pertain to commercial loans and that the loans utilized by the plaintiff were of a commercial nature:

"In the decision of the Regional Court of Appeal, whose date and number are specified above, it was determined that the loans used by the plaintiff from the defendant bank were of a commercial nature and that the Competition Board's decision dated 08.03.2013 and numbered 13-13/198-100 did not pertain to the formation of a cartel concerning commercial loans. Therefore, it was ruled that the first-instance court's decision to dismiss the case on the same grounds was not erroneous, and the plaintiff's attorney's appeal was substantively dismissed."

Regarding temporal binding effect, the 13th Civil Chamber of the Court of Cassation in its decision dated 02.07.2020, numbered 2017/7942 E. and 2020/5742 K., stated:

"The First Instance Court found that ... the date of the contract was 25/05/2007, meaning that the credit agreement between the parties was concluded on this date. In the Competition Board's decision, which forms the basis of the plaintiff's claim regarding the competition infringement, it was stated that the infringement period, or in other words, the cartel agreement, covered the dates from 21/08/2007 to 22/09/2011. Therefore, the credit used by the plaintiff from the defendant bank falls outside these dates, and thus outside the scope of the infringement fact and the decision."

Thus, the Regional Court of Appeal's decision of dismissal was upheld. In this context, the specific time period identified in the Board's finding of infringement has a binding effect on the courts in which the compensation lawsuit is instituted.

CONCLUSION

The connection between competition infringements and compensation lawsuits has been established through Articles 57 and 58 of the Act. Those who suffer damages due to a competition infringement may seek compensation for their losses in lawsuits adjudicated under the provisions of tort. At this juncture, the approach of the Court of Cassation in compensation lawsuits necessitates the finalization of the Board's decision identifying the infringement, and therefore, an unfinalized Board decision must be treated as a prejudicial issue. Otherwise, it is not possible for the plaintiff to prove the unlawful act until the Board's decision is finalized. Furthermore, the material and temporal elements of the infringement identified in the Board's decisions are taken into consideration by the courts reviewing the claim for damages.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.