On-Site Inspections in Light of the Recent Decisions of the Competition Authority

Introduction

When the past decisions and the recent decisions of the Competition Board (“Board”) are examined, a significant increase can be observed in the number of decisions where the Board found hindrance or obstruction of on-site inspections. This situation shows that the Competition Authority’s (“Authority”) on-site inspection approach has been changed significantly.

On-site inspections are carried out by case handlers of the Authority at the premises of the inspected undertakings, in the nature of a raid and hence without any warning. Undertakings are not informed about inspections beforehand. If the Board finds that certain behavior of the employees of the inspected undertaking qualifies as hindrance or obstruction of the on-site inspection, the relevant undertaking will be subjected to an administrative monetary fine. Thus, it is crucial to analyze the types of behavior that are found to be hindering or obstructing on-site inspections in light of the Board decisions, and avoid such behavior during these inspections.

The Board’s On-Site Inspection Authority and its Legal Foundation

The Board’s authority to conduct on-site inspection arises from Article 15 of the Law on the Protection of Competition numbered 4054 (“Law No. 4054”). The Board conducts on-site inspections through case handlers. The case handlers can examine all kinds of data and documents, obtain copies and physical samples of such, and demand oral or written explanations within the scope of their authority.

In the event that an on-site inspection is hindered or likely to be hindered, it will be performed by order of a magistrate’s court judge. However, the fact that an on-site inspection has been performed pursuant to a magistrate’s court judge’s decision will not prevent the application of an administrative fine.

Fines for hindering or complicating on-site inspections are regulated by Article 16 of Law No. 4054. As per the relevant article, the administrative monetary fine shall be applied by 0,05% of the annual gross revenue of the relevant undertaking in the financial year preceding the decision. If such cannot be calculated, the undertaking will be fined 0,05% of the annual gross revenue generated by the end of the financial year closest to the date of the decision to be determined by the Board.

Due to increasing digitalization, the Authority published Guidelines on the Examination of Digital Data During On-Site Inspections (“Guidelines”). The Guidelines authorize case handlers to investigate IT systems that carry information about the inspected undertaking, such as mobile devices, back-up records and cloud services. They also state that case handlers can utilize forensic IT hardware and software during on-site inspections. Forensic IT hardware and software primarily allow the case handlers to restore deleted data.

During on-site inspections, it is the duty of the inspected undertaking to prevent any interference with stored data and to protect the integrity of the data. The employees of the inspected undertakings are expected to provide full and active assistance to the case handlers. For instance, providing system administrator privileges, enabling remote access to the e-mail accounts of the employees, isolating computers and servers from the network, limiting the access of users to their corporate accounts, and restoring backed-up corporate data are among the obligations of the employees of the undertakings.

Recent Decisions of the Board on Hindrance or Obstruction of On-Site Inspections

Recently, a significant increase in the number of decisions where the Board found hindrance or obstruction of the on-site inspections can be observed. The fact that deleted data can be restored with the utilization of forensic IT hardware and software is one reason for that. Another reason is that case handlers inspect the WhatsApp chat history of the employees of the inspected undertakings. In this article, the Unmaş^[1], ETİ^[2] and Procter and Gamble (“P&G”)^[3] decisions selected among the recent decisions of the Board will be handled.

The Unmaş Decision

In the Unmaş decision of the Board, the investigated undertaking was imposed an administrative monetary fine because an employee deleted part of their WhatsApp chat history. Pursuant to the decision, the case handlers reached the content of the deleted chats with the use of forensic IT, and they found that the deleted data was related to the undertaking. In line with this, they determined that the employee deleted chats with the aim to hinder the on-site inspection.^[4]

The Unmaş decision is important as an undertaking was fined due to the deletion of an employee’s WhatsApp chat history. In its decision, the Board stated that the case handlers were not subjected to any hindrance in obtaining the organization structure of the undertaking, bringing the employees that were not present at the beginning of the investigation to the premises, providing remote access to certain data, and handling of the mobile devices.^[5] Yet, an administrative monetary fine was imposed on the undertaking.

As the Unmaş decision demonstrates, the fact that deleted data can be restored with the use of forensic IT will not prevent the Board from finding that its deletion constitutes hindrance or obstruction of an on-site inspection. As per the decision, “the contrary would be rewarding the cases where data is deleted and could not be restored with the use of forensic IT.”^[6]

The ETİ Decision

Unlike the Unmaş decision, in the ETİ decision of the Board, in addition to the deletion of data related to the undertaking, the fact that the inspection was delayed by the employees of the undertaking due to insufficient information provided to the case handlers, was cited as a separate reason for a fine.

In the ETİ decision, the Board determined that the inspection was delayed for an hour. The reason for such delay was examined by the case handlers in light of the information received from the security personnel and the entrance and exit records of the undertaking. Hence, it was determined that some employees of the undertaking were hidden in the premises even though they were present at the time the case handlers entered the premises.^[7]

Moreover, it was emphasized that the employees who were working remotely were told not to delete any document or data with a general announcement.^[8] Nevertheless, log records showed that certain employees did delete relevant data.

As a consequence, the Board held that potential evidence and findings of the case handlers were complicated and the on-site inspection was hindered.^[9]

P&G Decision

As in the aforementioned decisions, the deletion of data related to the undertaking was a fact of the P&G decision. Yet, this decision can be separated from those because here, the employee stated that they deleted private chats and the undertaking raised the privacy defense.

A suspicion arose in the eyes of the case handlers that the employee deleted a chat with another employee of the undertaking. Upon that, the relevant mobile device was connected to forensic IT hardware. As a result of the inspection, the case handlers observed that the employee exited group chats which may be evaluated as being irrelevant from work, titled “The team,” “I’m not done yet,” “Vicks Sales,” “Super Husbands,” “Death-S. G.”^[10]

The Board stated that as the group chats were permanently destroyed, they could not be informed about the content of the group chats. However, the Board decided that there was hindrance or obstruction of the on-site inspection and imposed a fine on the undertaking, with the reasoning that other employees were participants in the inspected group chats.^[11]

Conclusion

Together with the decisions handled in this article, the Board published eight decisions on this topic in November 2021 alone. When the recent decisions of the Board on this topic are examined, it is significant that they have one thing in common: deletion of e-mail and WhatsApp correspondences. Due to the sensitivity of the Board about the on-site inspection procedure, it is crucial to be aware of and to avoid such behaviors that may constitute hindrance or obstruction of on-site inspections.