Competition Board’s Tekel Beer Decision – A Debate Regarding an Annuled Acquisition by Administrative Court Should Be Re-Examined According to Changing Market Conditions and Legislation
The Competition Board has decided that the request for permission to take over the “Tekel Birası” brand and its registered form by Anadolu Efes Biracılık and Malt Sanayii A.Ş. –Anadolu Efes-, is not a transaction subject to permission within the scope of the current legislation in force at the time of notification.
The decision of the Board is a significant one as it establishes precedent for the first time in accordance with the EU competition law in regards to what kind of process will be followed after the annulment of the merger and acquisition transaction in Turkish competition law.
To explain briefly the summary of the facts in order to better understand the decision; Anadolu Efes allowed the acquisition of the mentioned brand with the Competition Board’s decision dated 25.08.2009 and numbered 09-38 / 925-218, and the decision was annulled by the administrative court. The annulment decision became final with the approval of the Council of State dated 2018 upon the appellate review of the case[1]. Thereupon, Anadolu Efes made a new notification regarding the acquisition, taking into account that the reasons for the annulled decision in 2008, which were the reasons for the annulment decision, and the reasons for the administrative action, lost validity after 10 years. Therefore, the basis of this decision is the determination of what kind of a procedure should be followed regarding a takeover transaction annulled in the administrative court.
When the decision of the Competition Board’s allowance to the merger and acquisition transaction is annulled by the administrative court, no special regulation regarding the legal situation of such case exists in the Law on the Protection of Competition No. 4054 (Law No. 4054). Anyhow, this issue is regulated in the EU law. According to Art. 10/5 of EU Regulation No. 139/2004, if a merger or acquisition decision, which has been decided by the EU Commission in a positive or negative way, is annulled wholly or partially by the EU Court of Justice, the EU Commission must re-evaluate the application considering the actual market conditions after the annulment decision and reach a new conclusion.
All these points have been stated at the stage of examining the acquisition process of the client company Anadolu Efes, and in the expert opinion presented by Dr. Hamdi PINAR. It has been a guide for the Turkish Competition Board to present the relevant regulations of the EU competition law and German competition law. As a result of the examination, it was decided by the Competition Board that the application received after the annulmentof the decision should be examined by taking into account the changing legislation and market conditions. As a matter of fact, it was taken into consideration that the legislation had changed after the first permission decision granted in 2009 and it was decided that the transfer of the Tekel Birası brand was not subject to authorization within the scope of the current legislation.
In the decision numbered 2019/1671 E. and 2020/864 K. of the Ankara 12th Administrative Court, where the request for annulment of the decision was examined, it was stated that the main function of the Competition Authority was to prevent concentration in the market, and this function required to make an assessment according to the continuous current conditions. It was emphasized that it is possible to take a decision to determine that an application rejected by the local court by considering the changing market conditions on the date of renewal or the approval of the Board, as in the case, was excluded from the scope of compulsory transactions that requires to application to the Board.
Thus, the decision set a precedent for the first time in Turkish competition law, in regards of applicationsconcerning merger and acquisition transactions to Turkish Competition Board, which was annulled by the administrative court. According to court, these applications should be re-examined by taking into account the changing legislation and market conditions.
[1] Please see proceedings in Turkish: https://www.rekabet.gov.tr/tr/DavaDetay?davaId=979caae7-af7b-49ff-939c-0fb23cc9f3ad
