The Turkish Court of Cassation Upholds a Treble Damages Award to a Rival Rakı Producer for a Dominant Undertaking’s Exclusionary Conduct

Background

Article 167 of the Turkish Constitution requires the State to take measures to ensure the sound and orderly functioning of markets and to prevent cartels. That task is carried out by the Turkish Competition Authority (the “Authority”, or the “TCA”), established in 1997 under Law No 4054 of 1994.^[1] Law No 4054 pairs public enforcement with private law remedies, so that its substantive rules are backed by a dual system of sanctions.^[2]

The private law remedies complement administrative sanctions in two ways. First, Article 56 renders agreements and decisions of associations of undertakings that infringe Article 4 invalid.^[3] Second, Article 57 gives anyone harmed by a restriction of competition a claim in tort against those who caused the harm.

Article 58(2) adds a further element. Where the damage results from an agreement or decision of the parties, or from their gross negligence, the judge may, at the injured party’s request, award up to three times the material damage suffered or up to three times the profits the infringers gained or are likely to gain.^[4] This provision distinguishes the Turkish regime from EU competition law.^[5] The treble damages rule is not purely compensatory. It is meant to deter in the public interest rather than only to benefit the injured undertaking, and it therefore has a punitive character, in a manner reminiscent of Roman law.^[6]

Law No 4054 does not characterise the liability it creates. Legal doctrine and the courts treat the claim as one in tort under Article 49 of the Turkish Code of Obligations No 6098 (“TCO”), with Law No 4054 defining the unlawful act and adding special rules on damage. The claimant must establish an unlawful act, loss, adequate causation and fault.^[7]

Article 57 of Law No 4054 does not limit who may sue: competitors, purchasers at any level of the supply chain and consumers all have standing. There is no specialised competition court. Claims are heard by the commercial courts where the tort concerns the commercial business of both parties, and by the consumer courts in consumer claims.^[8] A final Board decision is not res judicata in civil proceedings, but the courts treat it as establishing the infringement, and a claim fails if the decision is annulled.^[9]

Law No 4054 also contains no time limitation rule. Under Article 72(1) TCO, a tort claim is time-barred two years after the injured party learns of the damage and of the person liable, and in any event ten years after the act, unless the act is subject to a longer limitation period under criminal law. Infringements of Law No 4054 are not crimes, but they are punished with fines calculated as a percentage of turnover. Since 2015 the 11th Civil Chamber has treated these as proportional administrative fines for misdemeanours, for which Article 20(3) of Misdemeanours Law No 5326 sets an eight-year limitation period, and has applied that period to damages claims through the last sentence of Article 72(1) TCO and its predecessor.^[10] The Chamber counts the period from the claimant’s complaint to the Authority, although under Article 20(4) of Law No 5326 the period runs from the commission of the act or the occurrence of its result.

The Turkish Competition Board’s Mey İçki Abuse of Dominance Decision

First of the relevant complaints against Mey İçki San. ve Tic. A.Ş. was filed with the TCA on 2 January 2012. Anadolu, a rakı producer, filed its own complaint on 20 May 2013, while the full investigation was under way. It alleged that Mey İçki, through promotional promises to the owners and staff of hotels, restaurants, bars and other points of sale, and through threats to cut the premiums paid to those points of sale, was preventing rival brands from reaching the shelves.

By decision of 12 June 2014 (No 14-21/410-178), the TCB found that Mey İçki held a dominant position in the Turkish rakı market, where its Yeni Rakı brand was a must-stock (or must-have) product, and that it had infringed Article 6 of the Law No. 4054 concerning unilateral conducts.

The Board identified three practices, which it treated as parts of a single strategy to exclude rivals from points of sale in the traditional channel and in the on-trade channel. The first consisted of discounts, free goods and “stand protection” payments, granted at the discretion of regional directorates and targeted at points of sale where rivals were present or trying to enter. The second consisted of purchase agreements with volume targets exceeding the point of sale’s total past rakı purchases, under which the discount was paid upfront against a promissory note. The third consisted of shelf arrangements that confined rivals’ products to a small share of the display, mostly on the bottom shelf.

The TCB noted that Anadolu’s market share and its presence at points of sale had declined over the period. It found no need for a separate assessment under Article 4 and imposed a fine of TRY 41,512,531.90, set at 1.5% of Mey İçki’s 2013 annual gross revenue. The findings of dominance and infringement were unanimous; the fine was adopted by majority of the TCB, with one concurring and one dissenting opinion.^[11]

Mey İçki challenged the decision before the administrative courts. The 13th Chamber of the Council of State found no illegality in the TCB’s ruling, and the TCB ruling became final when the Plenary Session of the Administrative Law Chambers upheld that ruling on 14 March 2019, almost sixteen months after Anadolu had filed its civil action.

Private Enforcement: The First Instance Judgment and Calculation of Damages

Anadolu filed its compensation action on 17 November 2017 before the İzmir 3rd Commercial Court of First Instance (E 2019/218, K 2023/37, 27 January 2023). The court first declined jurisdiction in favour of the Istanbul commercial courts, but the İzmir Regional Court of Appeal reversed that ruling because İzmir was one of the places where the tort was alleged to have occurred.

Claimant Anadolu brought an unspecified receivable action (belirsiz alacak davası) for TRY 303,000, three times a provisional TRY 101,000, and later raised the claim to TRY 72,434,057.06. It asked the court to establish both its own loss and the profit Mey İçki had made or was likely to make from the conduct, to take whichever was higher as the basis of the award, and to add advance interest from the start of the torts.

The court did not base the award on Mey İçki’s profits. Since the conduct had been directed at all rivals, not only at Anadolu, there was no way to determine what part of that profit came from the conduct against Anadolu. Three expert panels reported in turn. The third panel’s supplementary report calculated Anadolu’s loss for 2010 to 2013 under four scenarios, combining two counterfactuals (Anadolu’s average market share in 2008 and 2009, or the growth rate of its share between 2006 and 2009) with two margins (the company’s overall operating margin or the margin on its rakı products). The court chose the average market share and the rakı margin, which gave a loss of TRY 3,676,286.95. It rejected the growth-rate counterfactual, which would have produced TRY 24,144,685.69, because it assumed that Anadolu’s share would keep growing indefinitely, which in turn would mean a continuous decline in the share of every other undertaking on the market. Holding that the abuse had been committed with gross negligence, indeed with intent, the court trebled the loss to TRY 11,028,860.84.

The statute of limitations defence was rejected. The conduct was punishable with a proportional administrative fine, and the Board had in fact imposed one, so the court applied the eight-year period of Law No 5326 through Article 72(1) TCO and found that the period, counted from the complaint to the Authority, had not expired. On interest, Anadolu had asked for interest on each year’s loss from the end of that year. The court instead ran interest on the whole award from 12 June 2014, reasoning that the unlawfulness of Mey İçki’s conduct had been established by the Board’s decision of that date.

The Regional Court of Appeal

Both parties appealed to the 11th Civil Chamber of the İzmir Regional Court of Appeal. Anadolu argued that the growth-rate counterfactual was a correct application of the before-and-after method, that the first expert panel had lacked competition law expertise, that the court should have awarded the profit Mey İçki had made from the infringement, and that interest should run from the torts rather than from the Board’s decision.

Mey İçki maintained that the claim was time-barred under Article 72 TCO, since Anadolu had known of the damage and of the tortfeasor at the latest on 2 January 2012, the date Mey İçki gave for the complaint to the TCA, and since the Law No 5326 period in any event runs from the act. It also objected to the use of the rakı margin instead of the company’s overall margin, argued that the experts had ignored consumer preferences, regulatory changes and the exit of other producers from the market, denied that a Board decision could bind a civil court, and complained that the court had not explained why it had exercised its discretion in favour of treble damages.

By judgment of 14 February 2025 (E 2023/1845, K 2025/263), the regional court dismissed both appeals on the merits under Article 353(1)(b)(1) of the Code of Civil Procedure No 6100 (“CCP”). It found that the expert report was fit for review and for founding a judgment, that the method of calculation was appropriate to the facts of the dispute and the scale of the infringement, that the action had been brought within the eight-year period of Law No 5326 (which it cited as Article 20(4)), and that the first instance court had not erred in exercising its discretion in favour of treble damages. It said nothing about interest.

The Court of Cassation’s Judgment

Both parties appealed to the Court of Cassation. The 11th Civil Chamber heard the parties on 2 December 2025 and gave its unanimous judgment on 4 December 2025 (E 2025/1873, K 2025/7299).

The Court dealt with all of Mey İçki’s grounds, and with all but one of Anadolu’s, in a single paragraph: having regard to the rules applicable to the dispute, there was no error in the first instance judgment, and the regional court had rightly dismissed the appeals. The Court gave no separate reasons on treble damages. The first instance court’s finding that the abuse had been committed with gross negligence, indeed with intent, and its award of three times the loss to a competitor therefore stand, approved but not discussed.

The same applies to quantification. The Court upheld the lower courts’ choice of method, which derived Anadolu’s lost profit from its own books and from its results in the years before the infringement, as Article 58(1) requires for competitors, and it rejected Anadolu’s objection to the use of a static benchmark. None of the three courts referred to Article 50(2) TCO, although choosing one of four expert scenarios is, in substance, a judicial estimate of the loss.

On limitation, the dismissal of Mey İçki’s grounds leaves intact the eight-year period of Law No 5326, counted from the complaint to the Authority, in line with the Chamber’s case law since 2015.^[12] The Court did not respond to Mey İçki’s argument that under Article 20(4) the period runs from the act. On these facts the point made no difference: the loss awarded relates to 2010 onwards and the action was filed in November 2017. What mattered was the eight-year period itself. Under the two-year period of Article 72(1) TCO the claim would have been time-barred whether time ran from 2 January 2012, from Anadolu’s own complaint of May 2013 or from the Board decision of June 2014.

Anadolu’s appeal succeeded on one point. The Board’s decision, the Court reasoned, had established the existence of the tort, and the sum awarded for Mey İçki’s tortious acts therefore had to carry interest “from the date on which each act occurred”. The Court cited no provision, but the ruling corresponds to Article 117(2) TCO, under which a tortfeasor is in default from the date of the act.

Since correcting this error did not require a retrial, the Court applied Article 370(2) CCP: it set aside the regional court’s judgment and upheld the first instance judgment as corrected. In the corrected operative part, advance interest runs on TRY 917,746.61 from 31 December 2010, on TRY 2,782,671.69 from 31 December 2011, on TRY 4,257,690.25 from 31 December 2012 and on TRY 3,070,752.29 from 31 December 2013. The four amounts add up to the trebled award of TRY 11,028,860.84, so interest from the year-end dates runs on the trebled sum, not only on the actual loss.

Remarks

A. Treble damages for unilateral conduct

Article 58(2) links trebling to damage arising from an agreement or decision of the parties, or from their gross negligence. The first limb presupposes more than one actor and fits cartels, so a unilateral abuse can qualify only under the second. The courts’ reasoning was a fortiori: conduct that the Board had found to be deliberately exclusionary goes beyond gross negligence. On the Board’s documentary record that is a defensible conclusion. It leaves open whether every Article 6 finding satisfies Article 58(2), or whether the civil court must make a finding of gross fault of its own.

The profit-based measure could not be used. Commentators would reserve it for competitors,^[13] yet a competitor could not rely on it here, because Mey İçki’s profit could not be apportioned among the several rivals it had excluded.

The courts applied the full multiplier on the finding that the conduct amounted to gross negligence, indeed intent, and gave no further reasons, although Article 58(2) has been read as allowing any award up to three times the loss.^[14]

B. Quantification

The courts used a before-and-after method: they estimated what Anadolu would have earned during the infringement on the basis of its position in the years before it.^[15] Article 58(1) supports this approach for competitors, since it requires their lost profits to be calculated taking into account the balance sheets of previous years. The courts took 2008 and 2009 as the reference years, a choice that rests on the Board’s own findings: the first document evidencing exclusionary conduct dates from October 2009, about a year after Mey İçki had been required to remove the exclusivity clauses from its agreements, and 2008-2009 was the only period in which rivals, taken together, gained market share. The Board also recorded, however, that Anadolu’s own share was falling even in those years, so for this claimant the benchmark is a cautious one.^[16]

The real dispute concerned the counterfactual path of Anadolu’s market share and the margin to be applied. Depending on those two choices, the single loss ranged from TRY 1.6 million to TRY 24.1 million, a spread far wider than the trebling itself. Rejecting an open-ended extrapolation of past growth is understandable. A static benchmark, however, assumes that Anadolu’s share would have stayed where it was, which sits uneasily with the Board’s finding that the conduct held back the growth of rivals. No yardstick comparison was attempted, although the Board’s contrast between organised retail, where it found no exclusion, and the traditional channel offered one.

The courts relied entirely on three panels of court-appointed experts, the first of which consisted of an accountant and a food engineer. Trebling a figure that is in substance an estimate in the sense of Article 50(2) TCO also triples its margin of error.

C. Interest

The correction is consistent with the Code of Obligations. Under Article 117(2) TCO, default arises with the tortious act; the Board’s decision establishes the infringement but does not create the debt. The result is also in line with Article 3(2) and Recital 12 of Directive 2014/104/EU, under which full compensation includes interest from the time the harm occurred until payment.^[17]

The corrected operative part settles three further questions without discussing them. First, it dates each act of a continuous infringement at 31 December of the relevant year, which is what Anadolu had asked for at first instance. This matches an earlier ruling of the same Chamber in a damages action between ferry operators, where commercial default interest on each year’s loss ran from the start of the following financial year.^[18] The convention is practical and, for losses that accrue over the year, slightly favours the defendant. Second, interest runs on the full trebled amount. That is harder to justify: the two additional multiples are not harm suffered on the date of the act but a sanction that the court may impose only on request, and default interest from 2010 adds to that punitive element. Third, the advance rate of commercial default interest was retained, presumably because the dispute between two merchants concerned their commercial business.^[19]

Interest now starts between five months and three and a half years earlier than under the first instance judgment, at the advance rate and in a high-inflation economy. The correction therefore adds substantially to what Mey İçki must pay.