This presentation by the Turkish Competition Authority was made during the discussion “Competition issues in aftermarkets” held at the 127th meeting of the OECD Competition Committee on 21 June 2017. More papers and presentations on the topic can be found out at oe.cd/1ZY.

1. AFTERMARKETS ANALYSIS of TCA
&
Medical Devices Decision
(Date:18.02.2009, Number: 09-07/128-39)
OECD 127th Meeting of the Competition Committee
June, 2017
Ebru İNCE
Competition Expert
Turkish Competition Authority (TCA)
eince@rekabet.gov.tr

2. GENERAL INFORMATION_AFTERMARKETS ASSESSMENT
OUTLINE
1.
2.
MARKET STRUCTURE PRIOR THE DECISION2.1
3. EX-POST EVALUATION FOR THE CASE
REMEDIES2.3
MEDICAL DEVICES DECISION (DATE:18.02.2009, NUMBER: 09-07/128-39))
PRELIMINARY INVESTIGATION_ALLEGEMENTS2.2

3. GENERAL INFORMATION_AFTERMARKETS ASSESSMENT
OUTLINE
1.
2.
MARKET STRUCTURE PRIOR THE DECISION2.1
3. EX-POST EVALUATION FOR THE CASE
PRELIMINARY INVESTIGATION_ALLEGEMENTS2.2
REMEDIES2.3
MEDICAL DEVICES DECISION (DATE:18.02.2009, NUMBER: 09-07/128-39)

4. AFTERMARKETS ANALYSIS IN TCA CASE LAW
Maya II
(2003)
Maya III
(2005)
Maya IV
(2014)
4. Madde (yatay)
Soruşturma
İhlal (uyumlu eylem)
4. Madde (yatay)
Soruşturma
İhlal (uyumlu eylem)
•Anti-competitive conduct cases
•Abuse of dominance allegements
•Excessive prices for after-sales
•Refusal to deal. Exclusion of rivals from the secondary
markets
System Markets
•Relevant markets
•System market?
•Dual markets?
•Multiple markets? Brand-specific aftermarkets
•Dominance
•Competitive concerns mainly raise in multiple-markets
Main discussions
• Compatibility/exclusivity
• Switching costs
Brand-specific
Market Definition

5. AFTERMARKETS ANALYSIS IN TCA CASE LAW
•Brand-specific marker definition DOES NOT
guarantee finding of dominance
•The link between primary and secondary
markets
•However, in case of locked-in consumers
•Possibility of price-discrimination between old
and new consumers
•Consumers’ ability to make informed choice
•High switching costs
Dominance
Dominance
•The acqusition cost of the primary product and its economic life
•The share of after-sales cost in the life-cycle cost of the product
•The transparency of prices for after-sales products and services
•Life-cycle cost calculation accuracy
•Switching to alternative primary product
Factors when
assessing
dominance

6. GENERAL INFORMATION_AFTERMARKETS ASSESSMENT
OUTLINE
1.
2.
MARKET STRUCTURE PRIOR THE DECISION2.1
3. EX-POST EVALUATION FOR THE CASE
PRELIMINARY INVESTIGATION_ALLEGEMENTS2.2
REMEDIES2.3
MEDICAL DEVICES DECISION (DATE:18.02.2009, NUMBER: 09-07/128-39)

7. 7
MEDICAL DEVICES DECISION_MARKET STRUCTURE
Brand-
specific
aftermarkets
+
Dominance
Limited number of
manufacturers
R&D intensive, hi-
tech products
Proprietary Rights
protection for
primary and
secondary products
High
acquisition
costs
Relative low share
of aftersales cost in
the life-cycle cost
Average life time:
10-12 years
Low transparency of
prices for after-sales
The necessity to
use orijinal spare
parts
Use of encryption/dongle
to prevent aftersales
service by rivals
(industry norm)

8. MEDICAL DEVICES DECISION_ALLEGEMENTS
Use of encryptions
Refusal of original spare parts supply to service
providers (after guarantee term)
Ex-officio investigation
Excessive pricing &refusal to deal allegements

9. MEDICAL DEVICES DECISION_REMEDıES
In order to inject competition in aftermarkets TCA obliged the suppliers to:
to provide the first level encryption key for technical service after the guarantee term ends
and upon the written request of the customer
to respond customers’ and service providers’ price requests for original spare parts within 3
working days.
to supply or rent the equipment or devices necessary to provide after-sales services to
customer or the service provider upon the written request/consent of the customer on
nondiscriminatory and cost pricing basis
to inform customers about the above conditions at product purchase phase on written
notice
to act in a nondiscriminatory manner to customers and service providers on supply of spare
parts
to publicly announce the price list for the top 100 commonly used spare parts (based on
the sales for the last three years) on its website

10. GENERAL INFORMATION_AFTERMARKETS ASSESSMENT
OUTLINE
1.
2.
MARKET STRUCTURE PRIOR THE DECISION2.1
3. EX-POST EVALUATION FOR THE CASE
PRELIMINARY INVESTIGATION_ALLEGEMENTS2.2
MEASURES TAKEN2.3
MEDICAL DEVICES DECISION (DATE:18.02.2009, NUMBER: 09-07/128-39)

11. MEDICAL DEVICES DECISION_EX-POST EVALUATıON
TCA’s Siemens case in the medical device sector in 2016
revealed that:
The number
of ISO’s has
been
increasing
Primary product
suppliers/their
distributors
began to
provide
aftersales
service to rival
products in
aftermarkets
Transparency
level of prices
in
aftermarkets
has been
rising
Hospitals
began to
benefit from
portfolio
economies