A Different Approach to Monetary Fines for Hindering On-Site Inspection: The Decision of the Ankara II. Administrative Court

Introduction

While the scope of Competition Board’s (“Board”) power to conduct on-site inspections has increased with the introduction of Guidelines on Examination of Digital Data during On-site Inspections (“Guidelines”), nowadays the amount of monetary fines imposed on undertakings continue to increase due to deletion of digital data by the undertakings' employees. As a matter of fact the total amount of administrative fines imposed by the Board on undertakings has increased 47 times from 2020 to 2021 on the grounds for hindering or complicating on-site inspections.^[1]

As the digitalization improves although the deleted data can be recovered by forensic information devices or access to the data by other means is possible, it is observed in various Board decisions that even the mere deletion of data contained in a digital media, including the private mobile devices of the employees’, is considered to be hindering or complicating the on-site inspection.

Notwithstanding that the examination of personal mobile devices is seen as an outcome of the digitalization by the Board, the decision of Ankara II. Administrative Court^[2] is significant in terms of setting the limits to the Board's power to conduct on-site inspections and substantiating the action for hindering on-site inspections.

Legal Background

The power of the Board to conduct on-site inspections which lays the groundwork for pre-investigations and full-fledged investigations by way of competition violation findings, is regulated under Article 15 of Law No. 4054 on the Protection of Competition (“Law No. 4054”). With the amendment introduced by the Guidelines, the Board is granted with the power to examine and duplicate the documents retrieved in any digital media that contains information on the undertaking. In various decisions of the Board, the Board’s power to examine the personal mobile devices of the undertaking’s employees is attributed to the said provision.

Notwithstanding that the on-site inspections must be carried out announced by nature, there are multitude of decisions where the Board imposed administrative fines in the amount of five per thousand of the annual revenues of the undertakings as per Article 16 of the Law No 4054, even in the event that some information on the personal mobile phones of the employees is deleted in affreightment during a “raid” inspection. 

Board’s Decision on Hinderin On-Site Inspection

Within the scope of the investigation carried out by the Board regarding the labor market, it is determined that some of the correspondences on Whatsapp application were deleted on two mobile devices obtained from the company’s officials, during the on-site inspection carried out at the headquarters of Sahibinden Bilgi Teknolojileri Pazarlama ve Ticaret A.Ş.’nin (“Sahibinden”). As a result of the technical examinations, it is determined that the data has been deleted on the mobile device in the posession of a company official, but upon the understanding that the deletion process did not occur on the day of the inspection, it is considered that the deletion process did not constitute the act of hindering the on-site inspection. However, it is also concluded that the other company official whose mobile device was also obtained, deleted the correspondences contained in the Whatsapp groups named "HRBP" and "with HRBP" by way of  using "Clear  the Chat" function and the Board concluded that  the deletion process took place after the on-site investigation was initiated. The correspondences deleted by the company official was accessed from the mobile device of another company official. However, the Board still imposed an administrative fine on the undertaking on the grounds for hindering and complicating the access to evidence and findings, that may be obtained by experts during the on-site inspection.

Evaluation by Ankara II. Administrative Court

In the lawsuit filed for the annulment of the aforementioned Board decision, the court accepted that the power of the Board to conduct on-site inspection should be used abruptly and fast without informing the undertakings, but also concluded that the Board should rely on concrete information and documents while making the decision for an administrative sanction. In this respect, the court emphasized in its decision that the action requiring a fine by the Board should be set forth with all its elements.

It is important to note that while the court considered that deletion took place after the initiation of the on-site investigation, the court positevely took into consideration that the undertaking informed its employees in order not to delete any record and they warned about handing over any required documents to the experts by way of sending an e-mail message as “The Competition Authority Experts will conduct an on-site investigation today, during the working hours. In this regard we kindly ask you not to delete messages on your e-mail and mobile phone”. In its decision the court concluded that the act does not constitute a basis for an administrative fine, taking into account that the correspondences deleted by the company’s official was accessed from another employee’s mobile device and the deleted correspondances were not related to the undertaking. Notwithstanding that no concrete information or documentation was obtained regarding undertaking’s act of obscuring evidence, the court issued a stay of execution order as the administrative fine of the Board will cause irrecoverable or irreparable damage to the plaintiff company.

Conclusion

It is observed in practice and in judicial decisions that adminstrative sanctions are frequently imposed on undertakings on the grounds for delaying the on-site investigation and preventing experts from accessing to potential evidence, even if all kinds of deletions on mobile devices of the employees’ during the on-site inspeciton are recovered by forensic information tools. It is evaluated by the Board that even if the information deleted is accesed through other means, this will not have an impact over hindering/complicating the on-site inspection.The Board accepts that if the deleted data cannot be detected by forensic methods, this will be rewarding for undertakings.^[3]

The power of the Board to conduct on-site inspecions is one of the most significant tools in determining whether if there is any violation of the Law No. 4054. However, in accordance with the principles of proportionality and legal certainty, the aforementioned decision differs from previous judicial decisions, in terms of the Board's obligation to base its actions on concrete information and documents and to take the least severe measure possible in order to achieve the legitimate goal.

Although the decision of the Ankara II. Administrative Court can still be appealed before the District Administrative Court, the said decision is important in terms of setting the limits to the power of the Board to conduct on-site inspections.