A New Breath of Fresh Air for Competition Investigations from the Constitutional Court

The Subject of the Application to the CC

It is observed that the applicant, which operates in the automotive market, applied to the administrative judicial process for the cancellation of the administrative fine imposed by the Board on the grounds of violation of Article 4 of the Law No. 4054 on the Protection of Competition (“Law No. 4054”) upon the preliminary investigation and subsequent investigation conducted by the Board against the undertakings operating in the automotive sector.

The subject matter of the application is related to the allegations that the right to immunity of domicile was violated due to the unlawfulness of the inspection at the workplace, the right to property due to the imposition of an administrative fine, the prohibition of discrimination in connection with the right to property due to the fact that the export turnover of his applicant was taken into account although the export turnover of other undertakings was not in determining the amount of the fine, the principle of not being retried and punished due to the investigation of the same act for the second time, the right to be tried within a reasonable time due to the long duration of the trial, and the right of access to the court due to the abolition of the decision correction stage by the law that entered into force while the trial was in progress.^[2]

Competence of the Authority for On-Site Inspection

One of the most critical issues addressed in the Constitutional Court Decision in terms of competition law practice is the on-site inspection authority regulated under Article 15 of Law No. 4054. According to the above-mentioned provision, the Board may conduct inspections at undertakings and associations of undertakings when deemed necessary in the performance of its duties. Competition experts working under the Board may examine the books, all kinds of data and documents kept in physical and electronic media and information systems of undertakings and their employees, may take copies and physical samples of these, may request written or oral explanations, and may conduct on-site examinations regarding all kinds of assets of the undertakings.

Article 15 of Law No. 4054 has been renewed as a result of the new procedures required for on-site examinations due to digitalization. In addition, the Guideline on the Examination of Digital Data in On-Site Examinations ("Guideline") was published regarding the procedure to be applied in the examination of digital data in accordance with this article.^[3] As stated in the Guideline, the Authority experts are authorized to examine the information systems of the undertaking such as servers, desktop/laptop computers, portable devices and storage devices such as CDs, DVDs, USBs, external hard drives, backup records, cloud services.^[4] Although portable communication devices, which are determined to be entirely for personal use, cannot be subject to examination, the legal basis of the rapid review method^[5] carried out by experts to determine whether the devices contain digital data belonging to the undertaking has always been debated until now.

With the deterrent effect of the administrative fines recently imposed due to the prevention of on-site inspections, undertakings continue to raise awareness more than ever before. The undertakings take strict measures to ensure that their employees do not delete or destroy any document, information or data from the moment the on-site examination starts, and that they display all kinds of co-operative behavior to facilitate the on-site examination. Given the intensive efforts to conduct on-site examinations in co-operation with the Authority, the Constitutional Court's Decision opens a new curtain for both undertakings and competition law practitioners regarding the on-site examination process.

The Domicile Nature of the Workplace in the Perspective of the Constitutional Court, Evaluation of the On-Site Inspection Without a Judge's Decision in the Meaning of Violation of the Immunity of the Domicile

The “Domicile” Nature of the Workplace

In its Decision, the Constitutional Court stated that the concept of domicile also covers workplaces, thus, the office where a person carries out their profession, the registered headquarters where the activities of a company operated by a private person are carried out, the registered headquarters, branches and other workplaces of legal entities can also be considered as domiciles.^[6] Again, by referring to previous ECHR decisions, the Constitutional Court emphasized that the concept of “domicile” within the scope of Article 8 of the ECHR Convention can be interpreted to include the management offices, branches and other workplaces of companies.^[7] Thus, it is clearly stated that the on-site inspection carried out within the scope of Law No. 4054, the areas of the headquarters, branches and facilities of the undertaking where the management works are carried out and the areas that cannot be freely accessed by everyone, such as workrooms, will be considered as domicile without any hesitation.^[8]

Interference of the On-Site Inspection with the Right to the Immunity of Domicile

In the concrete case subject to the Constitutional Court Decision, it was revealed that the inspection carried out at the applicant's workplace, which enabled obtaining 78 pages of e-mail documents from the computers of the applicant company officials, constituted an interference with the right to immunity of domicile.^[9] As guaranteed under Article 21 of the Constitution, no one's residence may be intruded upon. On the other hand, no one's residence may be entered, searched or seized unless there is a duly issued judge's decision based on one or more of the following reasons: national security, public order, prevention of crime, protection of public health and morals or protection of the rights and freedoms of others; and in cases where delay is inconvenient due to these reasons, unless there is a written order of the authority authorized by law.^[10]

However, Article 15 of Law No. 4054 introduces a rule stipulating that the Authority's experts may exercise their on-site inspection competences without a judge's decision. Thus, Law No. 4054 authorizes competition experts to freely visit and inspect workplaces, which are considered as " domicile", without a judge's decision. The only exception to the aforementioned freedom is in cases where the on-site examination is prevented or likely to be prevented. In these cases, the on-site inspection is carried out with the decision of the criminal judge of peace.

Execution of Investigation by Written Order of the Board in Cases of Inconvenience in Delay

Pursuant to Article 21 of the Constitution, no one's residence may be entered, searched or seized unless there is a written order of an authority authorized by law in cases where there is inconvenience in delay. However, the decision of the competent authority must also be submitted to the approval of the judge in charge within twenty-four hours.^[11] Although Article 15 of Law No. 4054 states that on-site examination may be conducted by the Board's decision, it is noted that the conduct of on-site examination by the Board's order is not specific to the cases where there is an inconvenience in delay.^[12] In the Decision, even if it is accepted for a moment that the decision of the Board, which is the competent authority, to carry out an on-site examination is limited to cases where there is an inconvenience to delay, it is stated that the absence of the obligation to submit the Board's decision to the approval of the judge in charge within twenty-four hours is not compatible with the additional guarantee in Article 21 of the Constitution^[13]

Moreover, in the concrete case, no attempt was made to prevent the applicant from conducting an on-site inspection, which enabled the inspection to be carried out without the need for a judge's decision. However, the Constitutional Court stated that even if this situation was in compliance with Article 15 of Law No. 4054, this practice violated Article 21 of the Constitution.^[14]

Conclusion

The Constitutional Court concluded that the on-site inspection carried out by the Authority's experts at the company headquarters of the applicant undertaking and without a judge's decision violated the right to immunity of domicile guaranteed by Article 21 of the Constitution. Accordingly, the Constitutional Court decided to notify the Grand National Assembly of Turkey (“TBMM”) in order to resolve the structural problem between the Constitutional regulation and the on-site inspection authorization under Law No. 4054.^[15] In the following period, it is not expected that competition investigations will continue from where they left off, ignoring the Constitutional Court Decision, and the contrary would not be legally correct. With this approach, it is foreseen that a legislative process will be initiated to harmonize Article 15 of Law No. 4054 with the Constitution. In any case, even though the Constitutional Court Decision has consequences for the applicant, the legal validity of the previous competition investigations conducted without a judge's decision and the competition investigations following the Constitutional Court Decision and the quality of the evidence obtained during these investigations will always be a matter of debate before the courts. The repercussions of this Decision, which opens the doors to a new era in competition law practice, are expected to continue for a long time.