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December 21, 2023

The Authority Of The Competition Board To Conduct On-site Examinations And Obstruction/enforcement Of The Authority To Conduct On-site Examinations

A. INTRODUCTION 

The Competition Authority was established under Article 20 of Law No. 4054 on the Protection of Competition (“The Act”) to secure the formation and development of goods and services markets in a free and healthy competitive environment, as well as to oversee the Act’s implementation. 

In this regard, one of the authorities of the Competition Board (“Board”), which is the organization of the competition Authority, is the “On-Site Inspection Authority” regulated under Article 15 of the Act. The Board has the authority under the aforementioned article to conduct inspections at undertakings and associations of undertakings when deemed necessary in the discharge of its obligations under the Act.

B. SCOPE OF THE BOARD’S AUTHORITY FOR ON-SITE REVIEW

The Board exercises its authority to conduct on-site examinations by the provisions of the Act, secondary legislation based on the Act, and the “Guidelines on the Examination of Digital Data in On-Site Examinations” published by the Competition Authority in 2020.

Within the framework of its on-site examination authority, the Board may examine the books, all kinds of data and documents kept in physical and electronic media and information systems, may take copies and physical samples thereof, may request written and oral explanations from undertakings, and may conduct on-site inspections of all kinds of assets of undertakings.

The above-mentioned on-site examination can only be carried out by the experts working under the Board through a certificate of authorization issued by the Board, and the relevant persons subject to the examination are obliged to ensure and facilitate the on-site examination to be carried out by the Board experts and to submit copies of the information, documents, books and other records requested under the Act.

During on-site inspections within the scope of the Board’s on-site inspection authority, Board is authorized to;

  • inspect information systems tools such as servers, desktop/laptop computers, portable electronic devices, CDs, DVDs, USBs, hard disks, and cloud services belonging to undertakings.
  • check the systems and tools used by the Board and the data of the undertakings and search the digital data by typing keywords. In this way, the Board may copy data through its systems or restore deleted data and gain access to them.
  • Except for portable communication devices that are determined to be entirely dedicated to personal use, to check the data belonging to the undertaking with the quick review method on portable communication devices such as mobile phones and tablets.

The Board shall deliver a copy of the copied data to the undertaking official after the examination. 

If the on-site examination is prevented or there is a possibility of prevention, an on-site examination may be carried out with the decision of the criminal peace judge.

Under Article 16 of the Act, the Board may impose an administrative fine of five per thousand of the relevant undertaking’s gross revenues on the undertaking subjected to the inspection, if the on-site inspection is obstructed or disturbed.

On the other hand, under Article 17 of the Act, in addition to the fines specified in Article 16, the Board may impose an administrative fine of five per ten thousand of the annual gross revenues of the undertaking at the end of the fiscal year closest to the date of the decision, to be determined by the Board, for each day that the on-site inspection is obstructed or disturbed. 

C. EVALUATION OF THE ON-SITE REVIEW AUTHORITY WITHIN THE SCOPE OF BOARD AND JUDICIAL DECISIONS

As stated above under subparagraph B., in cases where the on-site inspection carried out by the Board is obstructed or disturbed, or incomplete, inaccurate or misleading information or documents are provided, or information or documents are not provided within the specified period or not provided at all, administrative fines may be imposed on the undertakings that in violation.

An analysis of the recent case law of the Board and administrative courts reveals an increase in the number of decisions in which undertakings are subjected to administrative fines for obstructing/disturbing on-site inspections.

In today’s digital world, it is seen that the Board has shown sensitivity to the increase in actors keeping their data in the digital environment and the unlawful deletion of these digital data during on-site examinations. As a matter of fact, in the Board’s decision dated 26.01.2023 and numbered 23-06/74-23, the Board analysed whether an employee who was not present at the site during the on-site inspection deleted the correspondence in a whatsapp application group containing issues related to company correspondence from the company phone and whether this deletion action was like disturbing or obstructing the on-site inspection, and it was decided that the act of deleting the data on the company phone of the employee of the undertaking during the on-site inspection was within the scope of disturbing or obstructing the on-site inspection and an administrative fine was imposed on the relevant undertaking. In the aforementioned Board decision, the Board referred to the decision of the Ankara Regional Administrative Court 8th Chamber numbered 2023/207 E. and the decision of the 18th Administrative Court numbered 2022/318 E. 2022/3124 K., it was stated that “the content of the deleted e-mails (whether they are private or business-related) or whether they can be retrieved or not does not have any effect on the occurrence of the situation subject to criminal sanction, even if the deleted e-mail content correspondence was restored by the experts conducting the on-site examination, it is clear that the on-site examination was disturbed due to the late access of the experts to the data”, and it was concluded that even if the data subject to the deletion action is not related to the subject of the on-site examination, the mere act of deletion means the obstruction/disturbance of the on-site examination. In addition, even if the deleted data is accessed by the Board afterward, it is seen that the act of deleting data constitutes obstruction/disturbance of on-site examination and is subject to administrative fine sanctions.

Contrary to the decisions rendered by the Board in recent years, a recent decision of the Constitutional Court ruled that on-site inspections conducted without a court order are unconstitutional. Namely; in the application subject to the decision of the General Assembly of the Constitutional Court dated 23.03.2023 and numbered 2019/40991; it was claimed by the applicant undertaking that the on-site inspection carried out at the workplace was unlawful and violation of residence immunity, the property right, the prohibition of discrimination in connection with the right to property and the right to be tried within a reasonable time. The Constitutional Court ruled that the authorization of the on-site inspection violated the relevant undertaking’s residence immunity guaranteed under Article 21 of the Constitution. With this decision of the Constitutional Court, it is believed that there is a legislative incompatibility between the on-site examination authority granted to the Competition Authority by the Act and the implementation of the rights regulated by the Constitution and that the decision will lead to a lot of discussions at the legal level within the scope of the limits of the use of on-site examination authority in practice.

D. CONCLUSION 

The Board may conduct on-site inspections at undertakings and associations of undertakings when it deems necessary in the exercise of its authorities under the Law. Within this scope, the Board may:

  • examine the books, all kinds of documents, and papers of undertakings and associations of undertakings and may take copies thereof, if necessary,
  • request written or oral explanations on certain matters from the undertakings or associations of undertakings,
  • conduct on-site inspections of all kinds of assets or undertakings.

Considering the increasing sensitivity of the Board in its examinations, another important issue for undertakings within the scope of the Board’s on-site examination authority is to ensure that the on-site examination is not obstructed or disturbed and that the undertakings and the personnel of the undertakings are sufficiently legally aware of the scope of the Board’s examination authority in case such a situation arises.

On the other hand, with the aforementioned decision of the Constitutional Court, the issue of whether a new regulation will be made in the Act regarding the authority to conduct on-site examinations becomes an area of discussion at the legal level, and the procedures for the Board’s implementation of the on-site examinations that will take place in the future are among the issues to be analysed.

Best regards,

Kılınç Law & Consulting – Competition Law Department

Authors

Çağla Yargıç

Çağla Yargıç

Lawyer

Kağan Karaduman

Kağan Karaduman

Lawyer