The Problem of Returning the Data Obtained as a Result of Unlawful Notification in Light of the Competition Board Decision
Introduction and Background
Recently, the Competition Board (the Board) had imposed administrative fines on banks and financial institutions for failing to respond to the request for information within the scope of a preliminary investigation.[1] The request for information that lays the groundwork for the administrative fine imposed by the Board was related to the submission of correspondances on Bloomberg and Reuters platforms in a given time period, between the top 10 traders with the highest TL quoted transaction volume among whom were employed in the USA and the UK and made transactions in Turkish Lira.
In the appeal against the Board’s decision brought by the banks, the Ankara III. Administrative Court (the Court) annulled the Board’s decision finding that the principle of economic integrity specific to competition law could not be applied in terms of notifications that concern a procedural issue and that the notification should be made to the subsidiaries in Turkiye instead of the parent company abroad.[2] Thereupon, the request made by the banks for the deletion of the correspondences of their traders submitted by them within the scope of the unlawfully notified request for information was rejected by the Board.[3] The Board's assessments regarding the request to the return/deletion of the data submitted by the undertakings, which became controversial with the Court's annulment decision will be discussed in this article.
What Did the Court Say?
The Court had annulled the decision of the Board based on the following grounds:
- Notifications within the scope of the Law No. 4054 On the Protection of Competition (Law No. 4054) should be made in accordance with the provisions of the Notification Law No. 7012 (Law No. 7012).
- If there is no agreement on bilateral or multilateral legal aid and cooperation between the states to which the notification will be made and the Republic of Turkiye, or if the notification process falls outside the scope of these agreements, the notification must be made within the framework of the provisions on foreign notification, laid down in Law No. 7012.
- Since the subject of the dispute is related to an administrative act, the Hague Convention is not applicable in the case at hand, hence the provisions of the Law No. 7012 on foreign notification shall be applied.
- The principle of economic integrity, which is recognized in competition law ensuring that the parent company is liable for the anti-competitive conduct of the subsidiary company, does not apply to notifications which are of the procedural nature and subject to a separate legislation.
On the other hand, in the appeal made by the banks for the annulment of the respected decision of the Board, in which an administrative fine was imposed, the same Court in its decision dated 04.03.2021 had rejected the banks claims by approving the Board’s justifications.[4]
The Board's Assessments Regarding the Banks' Application
Based on the Court's decision on the unlawful notification, Citibank and JP Morgan applied to the Authority and requested the deletion of Bloomberg and Reuters chat room recordings of the employees. The banks argued the following points in their applications:
- In order not to be subjected to daily administrative fines, some information containing highly sensitive and confidential personal data and client-bank secrets were submitted within the scope of an unlawful request for information,
- Any use of the data submitted within this scope by the Authority may give rise to legal and/or criminal liability of the Turkish affiliates of the requesting undertakings or the data owner (the bank units submitting the data) in accordance with the legislation of the UK and the USA,
- In accordance with the Court's decision, the processing of data provided by the banks should be ceased, analysing the data with automatic means shall be stopped and the data shall be destroyed, shall not be stored and shall not be used within the scope of any administrative proceedings, and if it is transmitted to third parties, they shall immediately be informed,
- Finally, the Board must explicitly decide that the data will not be further processed, stored or transmitted by the Authority or a third party, and the Authority must confirm that the data has been removed from the file and destroyed irreversibly.
Regarding the above-mentioned requests of JP Morgan and Citibank, the Board emphasized in its decision that in the request for appeal made by another bank to the same Court, the Court decided to dismiss the request and decided that the notification of the Board was lawful. The Board also found that the Court's annulment decision was made in relation to the unlawful notification and that the Court did not make any assessment regarding the data requested to be deleted nor did not order any action such as the return or deletion of the requested data.
As a result of the examination of the Bloomberg and Reuters chat room records of the employees submitted to the Authority by the banks, it was decided that there was no need to intiate an investigation against the undertakings.[5] Nevertheless, the Board stated in its decision that, unlike the European Union competition law practice, Law No. 4054 does not contain any provision regarding the return of the data submitted by the undertakings.
With respect to the arguments put forward by the banks on the data submitted within the scope of the request for information which contains sensitive and confidential personal information and client/banking secrets, the Board stated that the undertakings submitted such data, that they have absolute control over to the Authority upon their “own consent”, thereby ensuring the lawfulness of the Board’s decision. The Board also concluded that the Authority is exempted from some articles of the Law No. 6698 on the Protection of Personal Data (Law No. 6899) within the scope of Article 28 and within the scope of Articles 5 and 8 which allow processing and transfer of personal data in situations that are "clearly stipulated by law" such as the Board’s authority to request information under Article 14 of Law No. 4054.
Based on the above-mentioned grounds, the Board rejected the requests of JP Morgan and Citibank regarding the deletion and protection of their employees’ records, stating that there is no judicial decision to be fulfilled for the data obtained at this stage, regarding the return or deletion of the documents and that the appeal process should be waited before rendering any decision due to conflicting decisions of the Court.
Board's Dissenting Vote
Although the Board rejected the undertakings' requests on the grounds explained above, the Board's dissenting vote is noteworthy. As stated in the dissenting vote, until the annulment decision of the court, no unlawful act or transaction can be assumed, and therefore, the acts and transactions carried out by the administration until the annulment decision should be accepted as lawful. However, after the annulment decision, the use or retention of the evidence obtained pursuant to the annulled Board decision becomes controversial. For this reason, taking into account that the process regarding the merits of the case continues in the administrative courts, it is argued that the evidence, the nature of which has become controversial, should be secured until the decision on the merits of the case is finalized, and the Board should at least render a decision that the evidence in question will not be used and/or given to anyone at this stage instead of making a decision on the return/deletion of the data.
Conclusion
In a world where the Board's administrative fine decision is annulled by the Court's decision, the use or retention of such information by the Authority will become controversial, in the event that the information was obtained unlawfully. Aside from the fate of the data allegedly collected unlawfully with the Court’s decision regarding an unlawfull notification, the fact that the Board did not return the data, despite the fact that no investigation was initiated against the undertakings as a result of this data by stating that that there is no regulation in Turkish competition law in this matter, touches upon another important point. For the reasons mentioned above, the Board's decision and the dissenting vote in this respect are important.
- Decision of the Board dated 02.07.2020 and numbered 20-32/397-179
- Decisions of the Ankara III. Administrative Court dated 16.02.2022 and numbered 2021/756 E. 2022/271 K.; dated 16.02.2022 and numbered 2021/554 E. 2022/269 K.; dated 16.02.2022 and numbered 2021/432 E., 2022/268 K., dated 16.02.2022 and numbered 2021/428 E. 2022/267 K.
- Decision of the Board dated 23.06.2022 and numbered 22-23/455-184
- Decision of the Ankara III. Court dated 04.03.2021 and numbered 2020-1303, E. 2021-447 K.
- With the Board's decision dated 26.08.2021 and numbered 21-40/576-279, it was decided not to open an investigation against the banks and financial institutions subject to preliminary investigation.
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