Turkish Competition Authority fined Port Akdeniz for abusing its dominant position through forming practical exclusivity in the container filling services with its rebate scheme. In the case, the Board used economic tools to back up its claims and rebut the claims of defendant. Details of economic analysis in the case are shared below.
In the case, defendant side shared a Price-Cost Analysis that showed Port Akdeniz did not practice predatory pricing for container filling services. On the other side, the Board also used economic tools to make Price-Cost Analysis. Unlike Port Akdeniz’s analysis, the Board did not make price-cost analysis for each sub services in the harbor. Instead, the Board made its analysis by accepting warehousing, container filling, DBA weighing and lashing services as a whole.
In the analysis, when the analysts put the cost of entry/exit fee that is a cost for the firms not purchasing services such as warehousing, container filling from Port Akdeniz, there was a substantial decline in profitability. According to the Board, even if a competitor, outside of the harbor, is efficient, indirect cost of entry/exit fee would force the competitor to operate in very low margin.
In the case, Port Akdeniz claimed that any increase in demand for loading in the harbor would positively impact on whole logistic activities in the region and tried to support its claim with a correlation analysis. As a response to that claim, the Board also used a correlation analysis in the case. In the analysis, the Board checked the correlation among loading in the harbor, container filling in the harbor, filling in the out of harbor, the total amount of marble, the total amount of marble for AKİS (the competitor) and the total amount of marble in outside of the harbor. The Board repeated its analysis by dividing concerned period into three parts. These were “the period before free time practice”, “the period in which restricted free time practice implemented” and “the period in which long term free time implemented”. The Board followed such an analysis to isolate impact of different periods quantitatively. In conclusion, the Board stated that increase in the demand would have impact on loadings in the harbor, not container fillings in the outside of the harbor.
In conclusion, the Board benefitted from the output of Price-Cost Analysis to evaluate “exclusionary” feature of Port Akdeniz’s rebate scheme.
The Decision (available only in Turkish) https://www.rekabet.gov.tr/Karar?kararId=007afdab-9585-410c-92c6-50b4d3f3e14e