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Board opens an investigation against Google !

At the beginning of this week, Turkish Competition Authority has announced on its web page that the Board has opened an investigation against Google (i.e. Google Inc, Google International LLC, and Google Reklamcılık ve Pazarlama Ltd. Şti., which is the Turkish subsidiary of Google). 

In fact, the European Commission has opened a similar investigation on the same subject against Google, and the Commission has shared its serious concerns and preliminary view that Google has abused its dominant position in its statement of objections with Google (see the relevant press release at http://europa.eu/rapid/press-release_IP-16-1492_en.htm). The main claims can be summarized as did the Commission:

  • requiring manufacturers to pre-install Google Search and Google’s Chrome browser and requiring them to set Google Search as default search service on their devices, as a condition to license certain Google proprietary apps;
  • preventing manufacturers from selling smart mobile devices running on competing operating systems based on the Android open source code;
  • giving financial incentives to manufacturers and mobile network operators on condition that they exclusively pre-install Google Search on their devices.

The Board has been forced to initiate an investigation upon the Stay of Execution Decision of the Ankara Administrative Court of Second Instance. In fact, even though the EU Commission has initiated formal proceedings against Google and shared its preliminary view on possible abuse, the Board had abstained opening an investigation in its first decision held at the end of its preliminary inquiry.

It is also interesting that in the preliminary inquiry decision, the Board has determined certain practices of Google which clearly give rise to serious doubts on violation. For instance, the Board has determined in the preliminary inquiry decision that Google’s agreements with Original Equipment Manufacturers (“OEMs”) involve exclusivity clauses in favor of Google, which provide exclusive pre-installation of Google applications. Therefore, the Board has ordered Google to remove such clauses. As is known, an undertaking in dominant position cannot insert such competitive restrictive clauses in its agreements with buyers, since these would foreclose downstream markets to competitors. Such clauses implemented by a dominant undertaking may be both considered abuse of dominant position and anti-competitive agreement which cannot benefit from individual exemption. However, the Board had neither held an individual exemption analysis nor considered efficiency arguments, but ordered a simple removal of such clauses without initiating an investigation to evaluate past potential violations, which was actually quite abrupt and evidently against procedural rules, and even giving an impression of double standard in favor of Google.

Thanks to the courts, the Board has been forced to examine Google’s practices within the scope of an investigation. It is also important to note that the Board’s preliminary inquiry decision (which was partially suspended by the Court for its conclusion on non-initiation of an investigation) has held by majority, and 2 members of the Board have therefore shared their dissident opinions in which they clarify their position on necessity to initiate an investigation in such a complex case. We think that this opposition has positively contributed to the Court’s stay of execution decision.

Considering the fact that the Board is very keen in opening investigations even against small and medium-scaled undertakings in the recent past with a view of raising competition law awareness; its abstention on opening an investigation against Google in its first decision still remains incomprehensible from our perspective, especially taking into account it is a procedural must for the Board to initiate an investigation at the end of a preliminary inquiry unless all doubts on violation are clarified. Thanks to the courts, one of the very important sectors and directly and considerably affecting consumer welfare and its leader undertaking will be thoroughly examined  from the competition law perspective.  

Needless to say, we are also proud for contributing in the court case.

Att. Ismail Unal Dogan

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