The Turkish Competition Board’s Power Transformer Cartel Decision: Four Separate Collusive Agreements and a Fine Exceeding TRY 537 Million

1. Background of Investigation

The starting point of the full investigation consists of complaints registered with the Turkish Competition Authority (the “Authority” or “TCA“) in November and December 2022. In summary, the complaints alleged that certain undertakings allocated power transformer tenders organized by TEİAŞ, submitted collusive high bids by reaching agreements among themselves, and indirectly excluded their competitors from the tenders by learning information regarding the technical specifications of the tenders from TEİAŞ officials prior to their public announcement.

The Board decided to conduct a preliminary investigation in January 2023. Within the scope of the preliminary investigation, on-site inspections were conducted at the headquarters of seven undertakings in June 2023. Deeming the findings of the preliminary investigation serious and sufficient, the Board ruled on July 13, 2023, to open a full investigation against six undertakings operating in the power transformer sector.

One of the on-site inspections carried out within the scope of the full investigation also became the subject of a separate sanction independent of the fine arising from the core infringement. During the on-site inspection conducted at Beta on July 27, 2023, although it was stated that the board member responsible for transformer tenders would come to the undertaking’s premises, this individual did not arrive and could not be reached, which prevented an examination of their devices. Furthermore, the request to access the same member’s email address via the server was rejected by the undertaking, asserting a violation of the Personal Data Protection Law. In line with its established case law, the Board characterized these actions as the obstruction of an on-site inspection. With a separate decision dated September 7, 2023, the Board imposed an administrative fine on Beta pursuant to Article 16, paragraph 1, subparagraph (d) of Law No. 4054, at a rate of five-thousandths of its 2022 gross revenue[4].

The full investigation was expanded gradually in the subsequent process. Based on documents obtained during on-site inspections, the Board included nine additional undertakings, including Armtek Elektrik Sanayi ve Ticaret AŞ (“Armtek“), SEM, and Eva Elektromekanik Sanayi ve Ticaret AŞ (“Eva“), within the scope of the full investigation in September 2023. Upon information and documents submitted by Armtek in its active cooperation application, the Board opened a full investigation against EFG Elektrik Enerji AŞ (“EFG“), Monokon Elektrik Sanayi ve Ticaret AŞ (“Monokon“), and Ulusoy Elektrik İmalat Taahhüt ve Ticaret AŞ (“Ulusoy“) in May 2024 and merged the files. Furthermore, findings obtained from the on-site inspections also served as the source for opening a separate, parallel full investigation against undertakings operating in the field of control and command panels. This parallel file formed the basis for the ne bis in idem assessment discussed below.

SEM applied for a settlement, explicitly accepting the infringement, and the Board terminated the full investigation with respect to SEM in March 2024[5]. Settlement discussions were initiated with respect to Eva; however, since the undertaking withdrew from the settlement process, the Board decided to follow the ordinary full investigation procedure. Armtek’s initial settlement request was rejected due to behaviors creating suspicion that it was continuing the infringement; its second request was not accepted on the grounds that, pursuant to the Regulation on Settlements, a re-application cannot be made if the initial process does not culminate in a settlement.

Astor Enerji AŞ’s (“Astor“) active cooperation application was rejected on the grounds that it did not meet the conditions set forth in Article 6 of the Regulation on Active Cooperation despite the additional time granted, while Armtek’s application was accepted, and the Board decided to apply a fine reduction to the undertaking. Oral hearing meetings were held on February 26-27, 2025, and the Board rendered its final decision on March 13, 2025.

2. Infringement Findings: Four Separate Anticompetitive Agreements

Taking into account the fields of activity of the undertakings party to the full investigation, the Board assessed that the relevant product market could be determined as the market for the “purchase and sale of electrical transmission and distribution equipment.” However, on the grounds that a definitive market definition would not alter the assessments in the file or the final outcome, a definitive product market definition was bypassed. It was stated that the geographic market could be determined as “Türkiye,” but a definitive definition was not crystallized here either.

The Board examined the documents obtained during on-site inspections, the bids submitted to the tenders, the tender result documents, and the information submitted within the scope of the active cooperation application, and identified four separate anticompetitive agreements covering different groups of undertakings and products:

• The first anticompetitive agreement was between Astor, Balıkesir Elektromanyetik Sanayi Tesisleri AŞ (“Best“), and Eltaş Transformatör Sanayi ve Ticaret AŞ (“Eltaş“), aimed at allocating the work items in TEİAŞ’s power transformer tenders.
• The second anticompetitive agreement related to distribution transformer tenders organized by private electricity distribution companies. The Board determined that Astor/EFG, Beta Enerji ve Teknoloji AŞ (“Beta“), Eltaş, the single economic unit consisting of Girişim Elektrik Sanayi Taahhüt ve Ticaret AŞ and Europower Enerji ve Otomasyon Teknolojileri Sanayi Ticaret AŞ (“Girişim/Europower“), and SEM submitted collusive bids and allocated the work items in these tenders; and that the actions in question constituted an anticompetitive collusive agreement occurring via agreement and/or concerted practice.
• The third anticompetitive agreement was directed at switchgear panels and concrete kiosk products. In the tenders for these products organized by private distribution companies, it was concluded that Armtek, Astor, Ats Elektrik Pano Sanayi Ticaret Ltd. Şti. (“Ats“), Ekos Teknoloji ve Ticaret AŞ (“Ekos“), Eva, Girişim/Europower, Monokon, and Ulusoy submitted collusive bids and allocated the work items.
• The fourth anticompetitive agreement related to sales conducted outside the tender framework. The Board assessed that Astor, Beta, Best, Eltaş, Girişim, Monokon, SEM, and Ulusoy operated under a collusive agreement regarding the prices applied in non-tender transformer sales and the discount rates to be applied over those prices.

The Board stated that, for all four anticompetitive agreements, the identified behaviors fell within the scope of Article 4 of Law No. 4054; and based on the definition in Article 3 of the Regulation on Active Cooperation, they constituted a cartel and formed a clear and serious restriction of competition. It was also stated that it is impossible for behaviors of a cartel nature to benefit from the individual exemption conditions set forth in Article 5 of Law No. 4054.

The Board evaluated the actions of undertakings operating in multiple product segments within those segments not as separate infringements, but as a single infringement. This evaluation was decisive for the Astor/EFG single economic unit, which operates across all segments of power transformers, distribution transformers, and switchgear panels/concrete kiosks. Astor argued that it remained unclear whether its actions were counted as a single infringement or separate infringements, while the Board reached the conclusion that the actions constituted a single infringement because they occurred in the same market, were of a similar nature, and followed a similar chronological process. This characterization is decisive in terms of determining the fine base for the administrative fine based on a single infringement per undertaking; otherwise, multiple fines would have been issued for multi-segment undertakings.

One of the distinguishing aspects of the decision is the difference that emerged between the final evaluation of the rapporteurs and the Board regarding the scope of the infringement with respect to the undertakings. In the Report, it was stated that 14 undertakings party to the full investigation violated Article 4 of Law No. 4054 by acting collusively in the tenders of TEİAŞ and private electricity distribution companies or by fixing prices in non-tender sales. The Board, on the other hand, narrowed the scope of the infringement by concluding that there was no infringement regarding four undertakings.

At the core of this narrowing lies the standard of proof applied to cartel allegations in competition law. The Board stated that it is not required for each piece of evidence regarding a cartel to satisfy the standard of proof independently of the others; when assessed as a whole, the evidence must be clear, convincing, and consistent. With respect to the fined undertakings, it was assessed that the primary documents showing direct communication with competitors revealed the elements of the infringement, such as subject matter, duration, and parties.

The result was different for the four undertakings excluded from the scope of the infringement. The Board identified that there was no concrete evidence showing that Grid Solutions Enerji Endüstrisi AŞ was party to any anticompetitive agreement; the conclusion reached for this undertaking aligned with the evaluation in the Report. On the other hand, it was concluded that the evidence obtained for Hitachi Energy Turkey Elektrik Sanayi AŞ, Kontrolmatik Teknoloji Enerji ve Mühendislik AŞ, and Meksan Trafo Sanayi ve Ticaret Ltd. Şti. did not satisfy the requisite standard of proof, and the Report’s findings were departed from regarding these three undertakings. Within this framework, it was ruled that there was no ground to impose an administrative fine on the four aforementioned undertakings.

3. Determination of Administrative Fines and Application of the More Lenient Regulation

While determining the administrative fine pursuant to Article 16 of Law No. 4054, upon the repeal of the former Regulation on Fines governing fine assessment during the ongoing full investigation and the introduction of the new Regulation on Fines dated December 27, 2024, the Board based its decision on the Regulation that was more lenient to the undertakings, in line with the principle of applying the more lenient provision under the Misdemeanors Law.

In determining the more lenient Regulation, the Board considered three elements: (i) The existence of export sales revenues was considered a mitigating circumstance under Article 7, paragraph 1, subparagraph (d) of the new Regulation on Fines; this matter yielded the more lenient result for all undertakings except Monokon, which has no export activities. (ii) The absence of an upper limit for mitigating factors in the new Regulation served as another element making this version more lenient. (iii) The lower increase in the basic fine for Monokon’s infringement (which lasted two to three years) under the new rules made the updated text more lenient to it.

Within this framework, the Board imposed administrative fines on eight undertakings based on their 2023 gross revenues; the highest fine was TRY 339,807,744.37, imposed on the single economic unit consisting of Astor and EFG. The total amount reached approximately TRY 537.2 million together with the fine imposed on SEM, which separated during the full investigation process via the settlement procedure.

In contrast, the Board determined that administrative fines should theoretically be applied with respect to Armtek, Ats, and the single economic unit consisting of Girişim and Europower; however, since these undertakings were already fined by another decision of the same date and numbered 25-10/235-120, the Board decided that there was no ground to rule on a new fine within the framework of the ne bis in idem principle.

4. Concurring Opinions of the Board Members

Although the decision was taken unanimously, two Board members submitted concurring opinions regarding the assessment of fines. Both statements concur with the finding of infringement and the necessity of imposing a fine; they diverge from the majority solely regarding the method of calculating the fine.

The concurring opinion of Board Member Şükran Kodalak relates to the reduction rate appraised for Astor. Kodalak pointed out that the vast majority of the evidence leading to the infringement conclusion regarding the four collusive agreements was obtained from Astor, and that Astor’s behaviors generated direct market effects across TEİAŞ, private electricity distribution companies, and all industrial customer groups. Therefore, she assessed that although they participated in the same infringement, the wrongfulness of Astor’s conduct carried significantly more weight compared to the other cartel parties. She concluded that this difference should have been reflected in the fine assessment by setting a lower reduction rate for Astor.

The concurring opinion of Board Member Hasan Hüseyin Ünlü is directed at the motivation and justification of the reduction rates. Ünlü stated that different reduction rates were applied to undertakings besides the mitigating reduction based on the export ratio. He highlighted that while the basis of the reduction for Monokon was explicitly tied to the relevant subparagraphs of the Regulation on Fines, the decision and the case file failed to explain the criteria used to determine the varying reduction rates for undertakings other than Monokon. For this reason, he did not join the reductions applied outside the export reduction and participated in the fine calculation with a separate justification.

Conclusion

This decision of the Board reveals the existence of four separate cartels across the power transformer, distribution transformer, and switchgear panel/concrete kiosk sectors. These behaviors, stretching from the allocation of work items in TEİAŞ tenders to collusive bidding in private distribution company tenders and price and discount determination in non-tender sales, cover different groups of undertakings and product categories, yet were evaluated in an integrated manner within a single full investigation. The decision sheds light on how a full investigation opened upon a complaint can expand through active cooperation applications and how competition infringements in interconnected markets can be addressed together.

The decision is highly instructive regarding the standard of proof and fine assessment. The Board’s conclusion that the evidence was insufficient for three undertakings flagged by the original Report demonstrates that each undertaking’s position in cartel allegations must be determined individually and anchored to concrete evidence.

Furthermore, the application of the more lenient Regulation on Fines was carried out through concrete elements such as treating export sales revenue as a mitigating factor, the absence of an upper limit on mitigating reductions, and the duration coefficient; it provides a concrete example of how a legislative amendment is handled in ongoing full investigations.

Finally, the two concurring opinions question the distribution of reduction rates among undertakings from the perspective of fairness in fine assessment and reasoning. In particular, the assessment regarding the basis of the reduction rates points out that the expectation of transparency in fine assessment may become more prominent in future decisions. With these characteristics, the decision constitutes a comprehensive example added to the established case law on bidding cartels.

[1] Attorney Gülce Korkmaz is the external competition law consultant of Baş | Kaymaz Law Firm. After completing her master’s degree at Bilkent University, she is currently pursuing her doctoral studies in the field of competition law at the Faculty of Law of Lüneburg Leuphana University (Germany) as a PhD researcher with the scholarship of the Joachim Herz Foundation.
[2] For the reasoned TCB decision dated March 13, 2025, and numbered 25-10/246-126, please see here (only available in Turkish).
[3] Please see the official announcement of Turkish Competition Authority: https://www.rekabet.gov.tr/en/Guncel/investigation-conducted-about-undertakin-34ba22044d06f01193e40050568585c9
[4] TCB decision dated 07.09.2023 and numbered 23-41/788-277.
[5] TCB’s SEM settlement decision dated 07.03.2024 and numbered 24-12/216-89.

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