TCA Orders Translation Federations to Stop Publishing Price Lists in Turkey

Article by Ertuğrul Can Canbolat and Baran Can Yıldırım

The Turkish Competition Authority ("TCA") has issued a warning to Certified Translation Federation ("TURÇEF") and Federation of International Translators and Translation Agencies ("TUÇEF") with its decision dated 3 May 2018 to stop publishing recommended price lists. The decision has revealed that the practices of the industrial associations are still on top of its priorities and the TCA carries on its conservative approach to such practices of associations consisting of competing companies. Further, this decision also highlights the TCA's persistence in exercising its power to an opinion letter for the termination of an infringement albeit the administrative courts' consistent annulment decisions disagreeing with such an approach.

TCA'S FINDINGS

On March 15, the TCA initiated a preliminary investigation upon the allegation of a real person that TURÇEF and TUÇEF regularly announce price lists. In order to make a proper evaluation, the TCA carried out on-spot inspection at the TUÇEF's premise, held conversations with the presidents of both associations, and served its requests for information to several translation companies. During the on-spot inspection, the TCA could not obtain any document revealing a violation of the competition rules and the information gathered from the investigated parties and the translation companies presented that those price lists are only recommended and not imposed.

In this regard, it should be noted that the translation business is not a regulated market in Turkey and there is no legislation which sets out factors to be considered in determining the translation fee. According to the TUÇEF's president, the aim of such price list is to inform the industry as well as the courts about a market value. On the other hand, none of the translation companies was obliged to comply with such lists or sanctioned due to their non-compliance. The translation companies to whom the TCA served a request for information expressed similar explanations as well.

Moreover, the questions regarding the black list application revealed that it is aimed to minimize the number of unjust treatment and unethical practices of the translation companies upon the members' (at least three of them) or consumers' (at least five of them) complaints. However, there has not been any such disclosure.

Finally, the TCA has evaluated the invoice amounts of the different companies for translation and the number of translated characters.

Accordingly, the TCA has determined:

• TUÇEF's and TURÇEF's power to publish price lists stems from their own charters,
• the price lists are recommended, and the translation companies are not obliged to comply with the price lists and
• the fees charged by the translation companies were lower than the prices in the concerned lists and were differentiated significantly.

Nonetheless, the TCA concluded in line with its previous decision regarding the similar matters that even if (i) the lists include recommended prices, (ii) the companies are not obliged to comply and (iii) there is not any sanction for non-compliance, such practices contain the risk to lead a violation. Although the concerned price lists do not actually cause a price collusion, it may potentially restrict the competition in the market. Therefore, the TCA decided to send an opinion letter for the termination of the investigated practices and for the removal of the clauses in the charters regarding the preparation of a price list. Additionally, the investigated parties must present within 90 days following the service of the reasoned decision that they take the abovementioned actions.

CONCLUSION

Notwithstanding the fact that the TCA has not imposed any fine in the concerned case, such decision may be annulled according to the established case law, upon an annulment request. Moreover, this decision should be also considered as a warning to all associations with price list practices and attract the attention of their members. Therefore, the discussions and decisions during the association meetings must be limited to the matters which do not lead to the restriction of the competition. Association meetings must be held with a pre-communicated written agenda, which complies with the competition rules. Finally, in case a discussion occurs about competition sensitive matters, members should clearly express that they are not willing to participate in any anti-competitive behaviour/agreement and then they should leave the meeting with making record of such expression.