Turkey establishes Unfair Pricing Assessment Board

Turkey

Correct as of 15:00, 21 April 2020. This article is not being maintained.

On 17 April 2020, Turkey established the Unfair Pricing Assessment Board, whose creation was included in the Law Relating to the Reduction of Effects of Covid-19 on Economic and Social Life and Amendments to Certain Laws No. 7244 (“Law No. 7244”).

Specifically, this Board, whose mandate is to prevent unfair price increases, discourage stockpiling by market players and ensure the healthy functioning of the free market, was created through an addendum by Law No. 7244 to the Law on Regulation of Retail Trade No. 6585 (“Retail Trade Law”).

Unfair Pricing Assessment Board

The Board can establish regulations against stockpiling and excessive price fixing by manufacturers, suppliers and retailers, and can impose administrative fines. The Board can also conduct inspections when deemed necessary and can take any other appropriate measures.

The Board's mandate is to combat the adverse effects of unfair pricing and stockpiling activities, which are not included in the scope of the Act on the Protection of Competition No. 4054 (“Competition Act”). Accordingly, Article 6 of the Competition Act prohibits undertakings from abusing dominant positions in the market to fix excessive prices. Undertakings that are not in a dominant position, however, were not subject to restrictions set forth by the Competition Act. Law No. 7244 changes this by requiring the scrutiny of all manufacturers, suppliers and retailers in addition to dominant players.

As per amendments made to Article 18 of the Retail Trade Law, the Board is entitled to impose administrative fines of between TRY 10,000 and TRY 100,000 against manufacturers, suppliers and retailers carrying out excessive pricing. In addition, the Board can implement an administrative fine of up to TRY 500,000 against market players that create shortages, engage in activities hindering consumers from accessing goods and disrupt market equilibrium and free competition.

The Board’s formation, duties, operational procedures and principles, secretariat services and all other matters will be determined through further regulation.

Conclusion

The COVID-19 epidemic has compelled the Turkish government to take temporary or short-term measures, and also to implement permanent measures, such as the establishment of this Board.

The Board is entitled to oversee the activities of all manufacturers, suppliers and retailers regarding unfair pricing and stockpiling, and to impose administrative fines when necessary. Consequently, it is advisable for all market players to take the Board's updates into consideration and adapt their business strategies accordingly.

For more information on this Board and Turkey's response to the current crisis, contact your regular CMS advisor or local CMS experts: Dr. Döne Yalçın or Arcan Kemahlı.