Corporate Liability Redefined – TCA’s Position on Employee-Leaked Competitive Data

Introduction

The recent decision of the Turkish Competition Authority (“TCA“) in its investigation into Altiparmak Gida A.S. (“Balparmak“) and Sezen Gida Ltd. Sti. (“Anavarza“), prominent players in the bee products market, highlights a pivotal shift in corporate liability for employees’ anti-competitive behaviour when conducted without the company’s knowledge.

Unlike the approach to corporate liability taken in the Arcelik/Vestel case, where proactive compliance measures absolved an undertaking of liability, the TCA held Balparmak accountable for an employee’s unilateral disclosure of competitively sensitive information to a competitor. This shows that businesses are expected to not only implement rigorous compliance frameworks, but also actively monitor potential breaches in order to mitigate liability. 4054 on the Protection of Competition (“

Competition Law“) by way of exchanging competitively sensitive information. Anavarza settled for a fine of approximately TRY 513 329.91. Balparmak, who withdrew from the settlement process, was fined TRY 2,477.859.92 (approx. The case is noteworthy because it signals the TCA’s stricter stance on corporate accountability, regardless of whether the conduct was carried out with or without the company’s knowledge or approval. This emphasizes the critical importance of proactive corporate responsibility in ensuring compliance with competition rules.

Assessment of Unilateral Disclosure of Future Price Information

In assessing Balparmak’s conduct under competition rules, the TCA evaluated documents obtained during on-site inspections, revealing communication between Balparmak’s Sales Manager and Anavarza’s Marmara Regional Sales Manager. The TCA determined that the documents showed that Balparmak shared its future price lists multiple times with Anavarza between December 2020 to December 2022. The TCA found that this disclosure of forward-looking strategic information restricted competition by allowing competitors to align their pricing strategies and thereby facilitate greater coordination. The TCA found that this disclosure of forward-looking strategic information restricted competition by allowing competitors to align their pricing strategies and thereby facilitating greater coordination.

Further, Anavarza’s internal records showed that the future pricing insights and related analyses from Balparmak were reported to its top management, indicating that Anavarza utilised this information to shape its strategic decisions.

The TCA concluded that Balparmak’s unilateral disclosure of future pricing information enhanced market transparency, enabling Anavarza to adjust its pricing and sales strategies accordingly. There was no evidence that Anavarza and Balparmak exchanged information. Such disclosure solely benefited Anavarza by reducing market uncertainty. Assessment of Balparmak’s Liability for Actions Conducted by its Employee without its Knowledge

In its Balparmak decision the TCA evaluated undertakings’ responsibility for the actions of employees in the contexts of competition violations. Investigation revealed that a Balparmak staffer shared future pricing lists by emailing them to Anavarza’s Marmara Regional Manager. This raised the issue of corporate liability under the Competition Law since Balparmak claimed that it should not be held accountable for its employee’s unilateral conduct.

Balparmak contended that when an employee acts with the intention to harm the undertaking, the undertaking (which has already suffered damages due to this conduct) should not be penalized separately under the Competition Law. The company also asserted that it was unaware of the employee’s actions, which disregarded Balparmak’s commercial interests, and that it should not be held responsible for an employee’s sharing of competitively sensitive information from a personal email account with a competitor in a manner detrimental to Balparmak’s interests.

The TCA emphasized that undertakings are liable for anti-competitive actions by their employees, regardless of the employee’s position within the company or whether the conduct was expressly authorized. This position is supported by European precedents, such as the CJEU’s Becu

para 26, Viho/Parker Penn

or BPB

case. These cases highlight the employer’s responsibility for oversight failures (culpa deligendo) and improper delegations (culpa de vigilando). Further, the TCA referenced its own decisions (see TCA in Supply and Burdur Otogaz Decisions) underscoring that employees are part of the undertaking, and their actions are binding on the undertaking under the competition rules.Ultimately, the TCA rejected Balparmak’s defence that it should not be penalized for actions allegedly taken outside its official oversight or control. The TCA held Balparmak accountable for the actions of its employee, concluding the sharing of competitively-sensitive information with a rival constituted a breach of Article 4 Turkish Competition Law. The TCA determined that accepting Balparmak’s argument would undermine the effectiveness of the Competition Law enforcement and reaffirmed the company’s liability for the anti-competitive actions of its employee. Conclusion

The Balparmak decision offers insightful guidance on the TCA’s approach to corporate liability in cases involving the disclosure of competitively sensitive information by employees. In the Balparmak case, the TCA held an undertaking directly responsible for its employee’s anti-competitive actions. The company was found liable for sharing future pricing information to a competitor. The TCA ruled that Balparmak could not absolve itself of liability by arguing that the employee had acted unilaterally against the company’s interest. The TCA emphasized that employees, regardless of intent or position, are integral to the economic entity of the undertaking, making their actions attributable to the company under competition law principles.

However, the TCA’s stance on corporate liability has not always been uniform. In an earlier Arcelik/Vestel case, the TCA took a different approach. It allowed companies to avoid liability by demonstrating a lack awareness and control of employee conduct. In the Arcelik/Vestel case, the TCA opened an investigation following Arcelik’s leniency application disclosing an Arcelik employee who had shared sensitive information with an Vestel employee. Arcelik detected the disclosure of information through its internal compliance program, and reported it to TCA in accordance with the Regulation on Active Cooperation for Detecting Cartels. Arcelik showed its commitment to compliance through the use of rigorous internal controls. This included third-party oversight during industry association meetings, and routine audits. Through these controls, Arcelik detected the violation independently. The TCA based its conclusion on this evidence that Arcelik had not been aware of the employee’s conduct and therefore could not be held responsible. While the Arcelik case illustrates that, with sufficient evidence, undertakings may rebut this presumption of liability by showing a lack of awareness and implementing effective compliance measures; the Balparmak case underscores that failure to detect and report the presumable violations independently leaves the undertaking fully liable.

Ultimately, the TCA imposes a high burden of proof on undertakings to demonstrate they are not liable for employee misconduct. Both decisions highlight the importance of internal compliance and proactive detection of potential breaches of competition law as key strategies to mitigate liability.