The Turkish Competition Board and the ice cream war

The Turkish Competition Board (the Board) decided that several practices of Unilever Sanayi ve Ticaret Türk AŞ (Unilever) amounted to infringement of Article 4 and Article 6 of the Law No 4054 on the Protection of Competition (Law No 4054). 1

The Board defined the market as industrial ice cream by separating the ice cream that Unilever produces from artisan ice creams produced by small-scale enterprises market in Turkey. It further segmented the product market to (i) impulse industrial ice cream and (ii) catering (take home) industrial ice cream.

In relation to Unilever’s position in the market, the Board noted that Unilever held the highest market share and while the competitors’ market shares decreased Unilever maintained its high market share for almost 20 years. Deriving from the high market share, it stated that dominant position may be presumed. In its analysis, the Board referred to Hoffmann-La Roche where the European Commission evaluated that the market share which differs between 70%-90% in different relevant product markets, is so high that the share in itself may be considered as an evidence of dominance.2 The Board also considered the characteristics of the market, including barriers to entry (eg advertisement costs associated with branding and cold chain distribution costs) and lack of buyer power. As a result, the Board found that Unilever enjoys a dominant position in the relevant markets.

Subsequently, the Board analysed several practices of Unilever and specifically evaluated (i) the agreement entered with Getir Perakende Lojistik AŞ (Getir), a leading e-commerce sector player which serves as Unilever’s customer, (ii) the commodatum agreements signed with Unilever’s resellers and (iii) the rebate schemes applied by Unilever vis-à-vis its dominant position and the Board’s past decision relevant to Unilever.

Two separate fines and one conditional exemption in one decision

Earlier, the Board had rendered a decision following an investigation initiated ex officio against Unilever concerning its exclusivity practices in the industrial ice cream market. The Board decided that Unilever held a dominant position in the relevant market. Accordingly, the Board prohibited (i) non-compete clauses included in Unilever’s agreements, (ii) arrangements that created de facto exclusivity in the market and (iii) rebates inducing loyalty, after evaluating that such practices prevented effective competition in the market.3 Moreover, the Board reviewed the freezer cabinet exclusivity clauses in the agreements with the sales points, and evaluated that there would not be sufficient demand for competitors’ products by sales points even if the clauses were removed – rendering a status quo in the market.

In the current case, first of all, the arrangements with Getir – which have been in force for approximately four years, five months – caught the Board’s eye, . The Board found that the agreements entered with Getir included non-compete terms which prohibited Getir from selling competitor products, and evaluated that the terms amounted to exclusivity arrangements preventing effective competition and contradicting with the Board’s past decision. Accordingly, the Board decided that the exclusivity arrangements violated Article 4 of Law No 4054 and imposed an administrative monetary fine of TRY205,807,378.83 on Unilever, factoring in the duration of the infringement.

Moreover, the Board evaluated Unilever’s rebate schemes. The Board saw that Unilever applied additional discounts to sales points which increased the number/size of Unilever cabinets despite a decrease in Unilever product sales (turnover) in the relevant sales points. The Board assessed that the increase in the number/size of Unilever cabinets in the traditional sales points with limited physical capacity lead to de facto exclusivity and exclusion of competitors from these sales points. The Board also found that Unilever’s competitors (in particular, Panda and Golf) were only able to reach a limited amount of the sales points; they were losing a significant amount of their shares as they were forced out of many sales points. Noting that Unilever products were considered as ‘must stock’ products, the Board stated that, even an exclusivity clause valid for only one year would lead to market foreclosure.

All in all, the Board concluded that the discounts applied in the traditional sales channel had the object and effect of restricting competition, and Unilever abused its dominant position in the relevant markets and infringed Article 6 of Law No 4054. As a result, the Board imposed an administrative monetary fine of TRY274,409,838.43 on Unilever. Importantly, under Article 5(3)(a) of the Regulation on Fines to Apply in Cases of Agreements, Concerted Practices and Decisions Limiting Competition, and Abuse of Dominant Position, the increase in the ratio of fine differs depending on whether the violation lasted longer than five years. In this regard, the Board stated that the rebates were applied in 2016, 2017, 2018 and 2019 and the undertaking did not submit that it ceased the rebates during the investigation conducted in 2020. Hence, as of the time of oral hearing (9 March 2021), the violation was evaluated to have lasted more than five years and the ratio of the fine was increased accordingly.

Furthermore, the Board assessed the commodatum agreements signed with resellers about the cabinets provided by Unilever. The clauses in the agreements entered with traditional sales points required resellers to use the cabinets only for the preservation of Unilever’s products. The Board stated that due to the physical limitations, the sales points may be using only one cabinet for the products and if the relevant cabinet can only be used for only one brand, it may provide exclusivity to Unilever in the relevant sales points. In its assessment, the Board referenced the European Commission’s decision whereby a Unilever subsidiary’s commodatum agreements concerning the provision of free of charge cabinets to sales points were evaluated to lead to de facto exclusivity, as the resellers were unlikely to install competitors’ cabinets since they needed to optimise the space in their outlets.4 In this light and as a result of an extensive assessment of the sales points and the number of cabinets used in these points, the Board decided that these agreements restricted competition by de facto prohibiting the sales points from selling the products of Unilever’s competitors especially in closed sales points which measured 100 square meters or less. In addition to the physical limitations, the Board considered the facts that (i) Unilever products were assessed as ‘must stock’ products by the re-sellers, (ii) Unilever’s market shares have been trending upward in the last four years (which is considered to be indicative of a market foreclosure), (iii) the consumers tend to buy the ice-cream that they find in the sales point and they do not search for other sales points. Importantly, the Board noted that while Unilever increased its market share vis a vis its competitors in the traditional channel where it imposed the relevant clause, it has lost market share in the discount markets channel where the same cabinet is used for different ice-cream brands. Hence, the Board emphasised that the allocation of space for competitors’ products increases the demand for competitors’ products. Finally, the Board stated that due to high brand recognition in the traditional channel, the clauses also impacted the potential competition. Therefore, the Board concluded that the said clauses constituted an Article 4 infringement.

Considering the relevant case-law of the Board and other jurisdictions (eg the UK5), the Board stated that the commodatum agreements may benefit from an individual exemption under Article 5 of Law No 4054 subject to removal of the exclusivity clauses and restructuring of agreements so that the visible part of the cabinet and 30% of the total volume of the cabinet in closed sales points measuring 100 square meters or less is allocated for competitor products, if there is no other ice cream cabinet.

Two sets of proposed and rejected commitments

During the investigation, Unilever provided two sets of commitments in accordance with the newly enacted commitment mechanism under Article 43 of Law No 4054. Both sets of commitments were rejected by the Board.

Firstly, Unilever offered to commit the following: if a sales point notifies Unilever that it would like to install a cabinet for another brand, it would reduce the space its cabinet uses by a certain ratio subject to sales points’ approval, unless there are already several cabinets in the sales point. However the Board rejected the commitment since, inter alia, (i) the commitment was offered at a considerably late stage, before the official service of the additional opinion6, contradicting with benefits of accepting the commitments (eg cost savings), and (ii) adoption and monitoring of the commitment would not be easy given the high number of sales points and the associated costs.

Secondly, Unilever offered commitments concerning not only the cabinet exclusivity but also the non-compete clauses and rebate systems. Accordingly, Unilever offered to (i) allocate space for competitors’ products in its own cabinet or install an additional cabinet for competitors’ products in the sales points with only one cabinet, (ii) allocate space in the smaller cabinet and in the larger cabinet (if necessary) to the competitor, if there are more than one cabinet, (iii) amend its agreement with Getir and (iv) cease rebates applicable to sales points which record a decrease in sales (turnover). The Board again rejected the commitments since (i) the commitments were offered at a late stage of the investigation, and after the submission of the commitments, (ii) Unilever submitted the third written defence where it rejected all allegations for which it offered commitments, (iii) the commitments were not of such a nature that they can restore the competition that existed in the market before the infringement since Unilever strengthened its dominant position by maintaining the violation related to the non-compete clauses and rebate systems for a certain period. The commitments offered by Unilever were considered to entail merely the termination of the breach – which is already the responsibility of an undertaking.

With respect to the commitments concerning the cabinets, the Board stated that they cannot be approved as the commitments (i) do not explain whether competitors would be able to place their price boards on the cabinets covered by Algida’s logo or not covered at all, (ii) would apply only to the competitor producers of ice creams having their own cold chain and freezer cabinet (and this would constitute a barrier to entry), (iii) do not explain what would happen if the sales point terminated its contract with a competitor whose products are placed in the additional cabinet installed at the sales point. According to the Board, the last point should have been clarified since if the sales point was to use the additional cabinet for Unilever products and subsequently restart working with the competitor, the ratio to be considered for the calculation of the space that would be reallocated to the competitor must be clear, especially, given that the space of Unilever’s products that are used as a base for this calculation may have increased. Also, the Board cast doubt on the requirement that additional cabinets and small cabinets would not be covered with the competitor’s logo based on the survey that reveals that the uncovered cabinets were not as attractive as the covered ones. In this regard, the Board noted that it is important that the competitors’ products should be placed in the same cabinets as Algida products to provide the competitors with equal chances.


  1. The Board’s Unilever II decision dated 18 March 2021 and numbered 21-15/190-80.
  2. Hoffman-La Roche, (85/76/EC), ECR 461, para 38-40 (finding that very large market shares are in themselves evidence of dominance in the absence of exceptional circumstances provided that these market shares existed over a period time).
  3. The Board’s Unilever decision dated 15 May 2008 and numbered 08-33/421-147.
  4. Van den Bergh Foods Ltd (98/531/EC), Case Nos IV/34.073, IV/34.395, IV/35.436. The judgment is upheld by the Court of First Instance, Case T-65/98, Van den Bergh Foods v Commission, judgment of 23 October 2003. The European Court of Justice dismissed the appeal request, Unilever Bestfoods (Ireland) Ltd v Commission of the European Communities, Case C-552/03 P, ECLI:EU:C:2006:607.
  5. The supply of impulse ice cream: A report on the supply in the UK of ice cream purchased for immediate consumption, Cm 4510, January 2000.
  6. ie the Investigation Team’s last report on the investigation.