Export Bans in Turkish Competition Law

The ban on parallel exports is a significant issue with regard to territorial exclusivity. Turkish competition law evaluates restrictions on export sales on two fronts: (i) direct restrictions imposed by the supplier to the export sales of the buyer (i.e., direct export bans), and (ii) indirect restrictions imposed by the seller on the buyer’s customers (i.e., indirect export bans). As Article 2 of Law No. 4054 on the Protection of Competition (Law No. 4054) limits the jurisdiction of the Turkish Competition Authority to Turkey, a restriction that will bear no effect in Turkey would not be considered within the scope of Law No. 4054. In other words, a supplier can restrict the direct export sales of the buyer due to the jurisdictional limits of Law No. 4054, as this would bear no effect within the Turkish market. The Turkish Competition Board (Board) has indicated in a number of precedents that an export ban placed on the distributors, under which the distributors’ sales are limited to within Turkey, would not be in violation of Turkish competition law. The reasoning of the Board in the said decisions is that the effect of the export ban is felt outside of Turkey rather than within Turkey, and thus would not violate Turkish competition law (e.g., Levi’s (27.06.2008; 08-41/565-213), Hyundai (11.07.2007; 07-59/684-240), Sodima (08.06.2004; 04-46/597-145), Glaxo Wellcome-PNG (26.09.2002; 02-57/727-289)).

However, it is important to note that a supplier cannot restrict a distributor’s sale within Turkey, knowing that the distributor will sell to a customer in Turkey, who will then re-sell the products abroad. In other words, there is an exception to the jurisdictional limits of Law No. 4054 when the restriction directed towards sales out of Turkey also has an effect on the Turkish markets, since the effects of such a restriction could be felt within Turkey as the initial sale (sale from the distributor to the customer) is made in Turkey. This would be deemed as a vertical restriction in violation of Article 4 of Law No. 4054 as it is an indirect attempt to ban exports where the effects are felt within Turkey.

For more information on export bans in Turkish antitrust law, please feel free to reach out to ELIG Gurkaynak at +90 212 327 1724 or through gonenc.gurkaynak@elig.com.