“The Turkish Constitutional Court’s Final Ruling After a Long Legal Battle: Administrative Fines Under Competition Law Do Not Violate Property Rights or the Ne Bis In Idem Principle!”
March 17, 2025 | NEWS
By Gokhan Bozkurt, Mustafa Bozkurt
Violations of competition law impose not only significant financial obligations on companies but also disrupt market dynamics and challenge legal certainty. In Türkiye, the extent to which administrative fines imposed for anti-competitive practices fall within the scope of property rights has long been a contentious legal issue. In particular, the impact of competition authorities’ sanctions on corporate assets and their compatibility with the principle of legal certainty has been a subject of significant debate within both the business and legal communities. For multinational corporations operating in Türkiye, the legal characterization of administrative fines and their implications for property rights remain critical considerations. In this context, the Turkish Constitutional Court’s (Court) ruling in the Turkcell case provides a crucial clarification [1]. The Court held that administrative fines imposed for competition law violations do not infringe upon property rights, setting a significant precedent that clarifies the legal framework governing corporate liability in competition law enforcement.
Background
The applicant, Turkcell İletişim Hizmetleri A.Ş. (Turkcell), is one of the largest operators in Türkiye’s electronic communications sector. Following complaints by rival companies, the Turkish Competition Authority initiated an investigation against Turkcell in 2009, alleging violations of Articles 4 and 6 of Law No. 4054 on the Protection of Competition.
On June 6, 2011, the Turkish Competition Board ruled that Turkcell had abused its dominant position by directing its distributors and dealers in a manner that restricted competition. Accordingly, the Board found that Turkcell had violated Article 6(a) of Law No. 4054 on the Protection of Competition and imposed an administrative fine of TRY 91,942,343.31 (approximately USD 58.2 million) against the company [2]. However, the Board concluded that there was insufficient evidence to establish that Turkcell had engaged in resale price maintenance and, therefore, ruled that Article 4 of the law had not been violated, rejecting the allegations in this regard.
During this process, one of the complainant companies, Doğan Dağıtım Satış Pazarlama Matbaacılık Ödeme Aracılık ve Tahsilat Sistemleri A.Ş., filed an annulment action challenging the Turkish Competition Board’s decision that Article 4 of Law No. 4054 had not been violated. Acting as the court of first instance, the 13th Chamber of the Turkish Council of State ruled that the Competition Board’s decision—stating that Article 4 had not been violated and that no administrative fine should be imposed on the applicant—was legally flawed and therefore annulled the decision [3]. Upon appeal, the Grand Chamber of the Administrative Law Chambers of the Council of State upheld the Chamber’s ruling, rejecting the appeals filed by the Turkish Competition Authority and Turkcell, which had intervened in support of the Authority [4]. With the ruling becoming final and binding, the Competition Board imposed an additional administrative fine of TRY 61,294,895.54 (approximately USD 11.2 million) on Turkcell on November 12, 2019.
Turkcell filed an administrative lawsuit seeking the annulment of this additional administrative fine. The litigation process is still ongoing.
Upon the finalization of the decision regarding the initial administrative fine, Turkcell filed an individual application before the Turkish Constitutional Court, arguing that the administrative fines imposed on the company violated its property rights. In its application, Turkcell contended that fines imposed due to competition law violations had a direct impact on its financial assets and, therefore, should be assessed within the scope of property rights.
Additionally, Turkcell asserted that while the Competition Board had imposed a fine based on a single provision in a similar case, its ability to benefit from the Board’s established favorable practice was eliminated due to the unlawful decision. The company further claimed that it had been penalized twice for a single act, violating the ne bis in idem principle.
In response, the Ministry of Justice of the Republic of Türkiye argued that Turkcell’s property rights violation claim was unsubstantiated and that the imposition of multiple administrative fines did not contravene the ne bis in idem principle. The Ministry emphasized that Articles 4 and 6 of Law No. 4054 regulate distinct legal violations and that, in this case, different fines were imposed for separate infringements.
Decision
Turkcell filed an individual application before the Turkish Constitutional Court, claiming that the administrative fine imposed by the Competition Board violated its property rights.
In reviewing the application, the Turkish Constitutional Court observed that:
A final court ruling had established that Turkcell had violated Article 4 of Law No. 4054, requiring the imposition of an administrative fine. Consequently, the applicant was subject to such a sanction. Following this ruling, the Competition Board imposed an administrative fine on Turkcell, even though the annulment case filed against the fine was still pending at the appellate stage. Given that the administrative decision not to impose a fine had been annulled by a final court ruling, leading to a direct financial impact on Turkcell’s assets, the Court determined that Turkcell had an economic interest protected under Article 35 of the Constitution.
The annulment of the administrative decision not to impose a fine, based on a final judicial determination that the applicant had violated competition rules, constituted an interference with property rights. The Court noted that Article 35 of the Constitution sets forth three conditions governing interferences with property rights, and in this case, the interference aimed to protect market competition. Therefore, the interference should be assessed under the third condition, which pertains to the regulation and control of property used for public interest purposes. For the interference with property rights to be deemed constitutional, it must be based on law, pursue a legitimate public interest, and comply with the principle of proportionality. In this regard, the Constitution Court proceeded with its assessment as follows:
The 13th Chamber of the Turkish Council of State had adequately addressed the key arguments and objections raised in the case. It provided a reasoned and well-founded justification for its decision.
Based on these findings, the Turkish Constitutional Court ultimately concluded that the interference with Turkcell’s property rights did not impose an excessive or extraordinary burden on the company at this stage. Furthermore, since the judicial proceedings concerning the administrative fine imposed by the Competition Board were still ongoing, the Court limited its review to the finalized proceedings under examination. Accordingly, in light of the above considerations, the Court ruled that there had been no violation of Turkcell’s property rights as protected under Article 35 of the Turkish Constitution.
Takeaways
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Legality of the Interference: Given that a final court ruling established that Turkcell held a dominant position in the market and engaged in resale price maintenance, which constituted a violation of Article 4 of Law No. 4054, the Court found that the legal provisions forming the basis of the interference were clear, accessible, and foreseeable. Accordingly, the interference with Turkcell’s property rights was deemed to have a legal basis.
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Public Interest Justification: The Court emphasized that imposing obligations on undertakings to safeguard competition and enforcing sanctions in case of violations serve the public interest. Referring to its previous ruling in (Ford Otomotiv Sanayi A.Ş., Application No: 2019/40991, 23/03/2023, § 95), the Court reiterated that the interference in the present case also aimed at protecting competition among undertakings, thereby fulfilling a public interest objective.
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Suitability of the Measure: The Court held that the final ruling mandating an administrative fine against Turkcell for its anticompetitive conduct was an appropriate measure to achieve the objective pursued by public authorities, namely, the protection of competition.
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Necessity of the Interference: In assessing whether the interference with Turkcell’s property rights was necessary, the Court highlighted that the third condition under Article 35 of the Constitution concerns the regulation and control of property use for public benefit. It further noted that public authorities enjoy broad discretion in such regulatory matters. Since no less restrictive alternative had been demonstrated to achieve the same objective and Turkcell had only been subjected to an administrative fine, the Court concluded that the interference could not be deemed unnecessary.
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Turkcell had been provided with both written and oral defense opportunities during the investigation stage following complaints alleging violations of competition rules. The company had also participated in the proceedings before the 13th Chamber of the Turkish Council of State attended the hearing and was actively involved in the case. While Turkcell claimed that it had joined the case at a late stage, it failed to explain how this delay adversely affected its ability to present its arguments and objections. After the case was decided against it, Turkcell was able to appeal the decision alongside the administrative authority, and it was legally represented by counsel throughout the entire judicial process.
The ruling carries significant legal and commercial implications for companies operating in Türkiye. By clarifying the debate on whether administrative fines for competition law violations constitute an infringement of property rights, this decision underscores the need for companies to reassess their legal risk management strategies.
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Full compliance with competition rules is no longer a choice but an obligation: Companies must strictly adhere to competition law in their distribution channels, supply chains, business partnerships, and contractual structures. Abuse of market dominance, restrictive practices limiting competitors’ activities, or agreements that distort fair competition may lead to severe administrative sanctions.
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Administrative sanctions and property rights: The Turkish Constitutional Court has established clear jurisprudence that administrative fines do not constitute a violation of property rights. This ruling demonstrates that companies cannot seek annulment of competition law sanctions solely based on property rights infringement claims.
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A critical determination regarding the ne bis in idem principle: The Court held that imposing administrative fines under both Article 4 and Article 6 for the same conduct does not violate the ne bis in idem principle. This finding confirms that a single act may be assessed separately under different competition law violations. Accordingly, companies must consider the risk of facing multiple sanctions for the same conduct and develop legal defense strategies accordingly.
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Proactive legal strategies and risk management: Companies must closely monitor competition law investigations and anticipate potential sanctions at an early stage to adjust their corporate policies accordingly. Implementing internal compliance programs and conducting regular employee training sessions are among the most effective methods for minimizing legal risks.
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A landmark decision for legal certainty: This ruling establishes a significant precedent regarding the legal nature of administrative fines and their relationship with property rights, thereby enhancing legal predictability. For companies operating in Türkiye, closely following competition law proceedings, establishing effective appeal mechanisms, and adopting robust legal positions against administrative fines have become more critical than ever.