In parallel with global warming, the global economic climate continues to warm. We are almost on track towards the Great Reset. And while all this is happening, the US elections in November are heating the atmosphere even more. While Trump promises to reduce corporations’ tax liabilities, Harris pledges to fight against price gouging.

Harris’s promise evokes the anti-price gouging regulations in our country.

As in many other countries worldwide, the current price gouging regulations in Türkiye entered our lives during the COVID-19 pandemic – on 17 April 2020 – to reduce the pandemic’s effect on economic and social life.

The relevant law does not define this concept if you ask what price gouging is. However, the regulation regarding the Unfair Price Evaluation Board (the Board) makes a definition.

As per this definition, price gouging means excessive and unfair increases in the prices of goods or services offered for sale by producers, suppliers, or retail businesses during states of emergency, disasters, periods of economic fluctuation, or other emergencies, and which are essential to meet the public’s basic needs such as nutrition, healthy living or safety, without a justified reason such as an increase in input or other production costs.

So, what do economic fluctuation or other emergencies mean? Then, what is an excessive and unfair increase? Which objective criteria will the Board use to determine the fair price? For instance, will factors such as the supply-demand balance, competitive free market conditions, inflation, purchasing power, supply chain processes, domestic production, or import-export policies be considered?

If the Board had determined the principles and rules on anti-price gouging through a regulatory decision as per its 2020 authorization, we could have an idea about the approach to the answers to these questions. However, the Board issued no such decision.

On the other hand, the Constitutional Court revoked the Board’s regulatory authority on 01 June 2023. In the justification for the revocation, the Constitutional Court ruled that granting the Board broad regulatory authority on the price gouging concept, where the law failed to draw a framework, restricted the freedom of enterprise far from legal predictability. The revocation entered into force on 01 May 2024.

Nevertheless, the Board still has the authority to conduct inspections and impose administrative fines. In this context, it inspected 15,080 persons in 2023 and imposed administrative penalties of TRY 135.1 million on 646. Again, in the first nine months of 2024, it inspected 45,318 persons and imposed administrative penalties of TRY 197.6 million on 691.

So, while the Board did not introduce any regulatory decision regarding the principles and rules on anti-price gouging, and its regulatory authority was later revoked, based on which objective criteria did it apply these penalties?

Going back to the beginning of the discussion, was there a need for a regulation for anti-price gouging, while there are laws on competition, unfair competition, unfair commercial practices, unfair commercial practices in the supply chain, and even on the trade of products such as vegetables, fruits, meat, milk or eggs?

Mainly, could not the Competition Board take the necessary measures to eliminate the competition violations in goods and services markets resulting from agreements, decisions, or practices that prevent, distort, or restrict competition or from abuse of dominant positions by businesses that dominate the relevant markets?

If the markets were so unhealthy that eliminating the competition violations was insufficient to achieve fair prices, was the Unfair Price Evaluation Board the proper authority to solve this problem? Can we say that we achieved fair prices for basic needs thanks to the administrative fines imposed by the Board?

On the other hand, since the COVID-19 pandemic is no longer an emergency and more than a year has passed since the earthquakes of 06 February 2023, what is the justification for the administrative penalties imposed in 2024 for price gouging? For instance, is it economic fluctuation? If so, what is economic fluctuation? And are price controls the solution? If yes, why does the Energy Market Regulatory Authority not impose a price ceiling on fuel as it did in the past?

Av. Müge Önal Başer, LL.M., LL.B.

References

1. Constitution of the Republic of Türkiye No. 2709 (Official Journal (OJ), 20 October 1982, No. 17844).
2. Law No. 4054 on the Protection of Competition (OJ, 13 December 1994, No. 22140).
3. Petroleum Market Law No. 5015 (OJ, 20 December 2003, No. 25322).
4. Law No. 5957 on the Regulation of Trade in Vegetables and Fruits and Other Goods with Sufficient Depth of Supply and Demand (OJ, 26 March 2010, No. 27533).
5. Turkish Commercial Code No. 6102 (OJ, 14 February 2011, No. 27846).
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