TURKISH COMPETITION AUTHORITY GRANTED 3-YEAR EXEMPTION FOR APPLICATION IN ENERGY SECTOR
17/04/2020
Turkish Competition Authority (TCA); upon the application of the Energy Trade Association (ETC), published its reasoned decision on granting exemption to the practice of consolidating and publishing certain data regarding the transactions carried out by six brokers operating in the Association and over-the-counter (OTC) market.
TCA defined the relevant geographical market as “Turkey” and the relevant product markets are determined as; “IAs market”, “physical or financial delivery futures contracts and other derivatives market traded in organized markets”, "short sale contracts market traded in OTC", “GOP and GIP (spot organized markets)” and “DGP and YHP (real time markets)”. TCA determined that additional term market data will facilitate anti-competitive practices in the relevant markets due to the presence of price-quantity information of contracts that are not yet overdue in the data sets shared with the said practice and serious data sharing by the market operator EPİAŞ at present.
TCA decided to grant an individual exemption for a period of 3 years, based on following arguments:
- By sharing the data; the condition of "providing new developments and improvements or economic or technical development in the production or distribution of goods and the provision of services " is met as; providing such a platform will enhance the development of these markets, the exchange of information will serve as a form of reporting, which will help to identify potential market disruptions by regulatory agencies, market actors and other shareholders, increasing volume of OTC will bring better risk management and lastly fluctuations in spot and real-time electricity markets will decrease.
- The application meets the “consumer benefits from this” condition, as it will be possible to develop risk management and price optimization opportunities with alternative supply channels for both independent suppliers and free consumers of a certain scale.
- The application meets third condition of “competition should not disappear in a significant part of the relevant market”, as it will not disrupt the competition in the relevant markets in terms of both the trade in OTC and the electricity trade in other market places, it will not disrupt the physical delivery futures market in VEP and there is no obstacle or restrictive provision for potential providers other than the two data providers to join ETD.
- By providing the exemption to the application for 3 years and keeping the authority for re-evaluating, the condition that “competition should not be restricted more than necessary” is also met due to progress of liberalization, VEP's engagement, OTC’s provision to the market participants with an alternative for futures contracts until the trading volume in VIOP increases, lower transaction costs of short sale contracts, current long-term agreements.
(TCA Decision - 26.12.2019, 19-46/785-342)
This document provides general information on the subject and does not constitute a legal opinion or recommendation. Consulting a specialist is recommended before taking an action. No claim arising from the content of or relating to this document can be asserted against NAZALI.