During the COVID-19 outbreak, some entities exorbitantly increased the prices of masks, disinfectants, colognes, wet wipes and foodstuff against the standards of professional care in contrast with the normal functioning of the market and in a way that is negatively affecting the usual purchasing behaviour of the consumers.
By taking the exorbitant price increases into account, an additional article titled “Exorbitant price increase, stockpiling and Unfair Price Assessment Board” has been incorporated into Law No.6585 on Regulation of Retail Trade by Article 14 of the Law No.7244 on Reducing the Impacts of the Novel Coronavirus (COVID-19) Pandemic on Economic and Social Life and Amendments to Certain Laws. By this Article, it was ruled that manufacturers, suppliers and retail businesses shall not conduct activities that result in tightness in the market or disruption of the market balance and free competition and activities which might prevent consumers from easily accessing the goods in the market. With this purpose in mind, the Unfair Price Assessment Board (“Board”) was established and empowered to make regulations to prevent exorbitant price increases and stockpiling practices of manufacturers, suppliers and retail businesses. The Board is entitled to monitor the market by inspecting the businesses, imposing administrative fines and taking measures where necessary. The Regulation on the Unfair Price Assessment Board, which stipulates the procedures and principles regarding the establishment of the Board, its duties and powers, monitoring of exorbitant price increases of supplier and retailers business and stockpiling practices and imposing administrative fines, was published in the Official Gazette dated May 28, 2020, and immediately entered into force.
According to the Regulation on the Unfair Price Assessment Board, the Board is empowered to take the necessary measures to protect the market balance and consumers against unfair price increases and stockpiling practices of retail businesses regardless of whether they are in a dominant position in the market or not. The Board is authorised to determine the principles and rules on unfair pricing and stockpiling practices. The Board consists of thirteen members, including general managers and sector organisations representatives from the Ministry of Trade, the Ministry of Justice, the Ministry of Treasury and Finance, the Ministry of Industry and Technology, the Ministry of Agriculture and Forestry. The Board requires a simple majority in a meeting with at least 7 members to adopt a decision. These decisions may be announced by the Ministry of Trade in order “to inform and enlighten the public and to protect the economic interests of the parties involved in the goods and services market”. The complaints can be made with a petition to the Ministry of Trade or its Provincial Directorates through the complaint system or other electronic application methods. Real persons or legal entities can make the applications. The sanction envisaged against exorbitant price increase is the administrative monetary fine ranging from 10,000 Turkish Liras to 100,000 Turkish Liras and the sanction envisaged against acts causing a scarcity in the market, distorting the market balance and free competition or preventing consumers from easily accessing goods is the administrative monetary fine between 50,000 Turkish Liras and 500,000 Turkish Liras.
In the meantime, the applications made to the Ministry before April 17, 2020, regarding exorbitant price increases are subject to the authority of the Advertisement Board in terms of unfair commercial practices as per Consumer Protection Law. The Advertisement Board examined these complaints, and the administrative fines were imposed on the companies implementing exorbitant price increases as per the disposition of the Regulation Amending the Regulation on Commercial Advertisement and Unfair Commercial Practices. Under the title “Deceptive Commercial Practices” of the Annex called “Exemplary Practices Deemed as Unfair Commercial Practices”, this Regulation rules that “Increasing the sales prices of the goods and services presented to consumers without reasonable grounds by indicating that the sales price increase is a result of changes such as input cost and the exchange rate, even though the sale price is unaffected by these changes is unfair commercial practice”.