Sector Inquiry Report Concerning Handheld Terminals & Similar Devices Has Been Published on the Website of the Turkish Competition Authority

The Report highlights that the use of handheld terminals (also referred to as endexors), which are widely employed in stock-based industries such as fast-moving consumer goods (“FMCG”) for field sales, inventory tracking, logistics, and warehouse management, may give rise to various competition law risks where such devices are used through shared systems by undertakings operating at different levels of the supply chain.

In particular, the Report assesses that these risks become more pronounced in scenarios where the digital infrastructure related to handheld terminals is controlled by the supplier undertaking operating at the upstream level of the supply chain, while downstream dealers or distributors merely act as users of such systems.

Key Competition Concerns Highlighted in the Report :

1. Resale Price Maintenance (“RPM”): The monitoring of distributors’ resale prices via handheld terminals, the de facto steering of distributors toward specific price levels, or the imposition of sanctions such as suspension of orders or restriction of product supply in cases of price non-compliance may result in limiting resellers’ ability to freely determine their resale prices.

2. Customer and territory restrictions: By defining, through systems integrated into handheld terminals, the customer groups or geographical areas to which resellers may sell, active and passive sales may be effectively prevented, thereby restricting competition within vertical relationships.

3. Exclusionary discount and rebate schemes: Especially with regard to suppliers holding a dominant position, the use of detailed sales, pricing, and discount data collected via handheld terminals within rebate and premium mechanisms may give rise to practices that could foreclose competing undertakings from the market or create de facto binding effects on resellers.

The Report emphasizes that these competition risks become particularly evident where handheld terminals are used not merely for operational purposes, but also for price monitoring, price steering, and the supervision of commercial conduct.

Assessment of the Turkish Competition Board’s Decisions

An assessment of the Turkish Competition Board’s (“TCB“) established case law concerning handheld terminals demonstrates that handheld terminals or electronic management systems integrated into such devices are not, as a rule, considered inherently restrictive tools under competition law. Rather, the legal assessment depends on the system’s design, its actual functioning, and the undertaking in which control is concentrated.

In this context, the Frito (2007) decision serves as an example where distributors’ inability to effectively modify sales prices through the handheld terminal system, coupled with the binding nature of the price list communicated by the supplier, was found to potentially restrict distributors’ freedom to set resale prices. By contrast, in its Frito decision dated 2013, the TCB determined that the prices displayed on the handheld terminals were of a recommendatory nature and that the system technically allowed the application of discounts; accordingly, no infringement of competition law was found.

Similarly, in the Gillette (2008), Mey İçki (2018), and Red Bull (2019) decisions, it was established that the software used in handheld terminals granted distributors genuine discretion with respect to pricing, discounts, promotions, and customer definitions; that no supplier approval was required for such actions; and that the system was not operated in a binding or sanction-based manner. These decisions demonstrate that where handheld terminals enhance operational efficiency without eliminating distributors’ commercial independence, no competition concerns arise.

By contrast, in the Nestlé (2024) decision, the TCB found that, through the Panorama system integrated into handheld terminals, resale prices and discount rates were de facto determined by the supplier; the system did not permit deviations from these prices; and sales were monitored by the supplier, with sanctions imposed in cases of non-compliance. TCB concluded that this structure eliminated distributors’ freedom to make independent commercial decisions and, together with customer and territory restrictions, constituted an infringement of Article 4 of Law No. 4054 on the Protection of Competition.

Recommendations Included in the Report

The Report sets out the following recommendations to mitigate competition law risks arising from the use of handheld terminals:

• Data masking and anonymization: It is considered that transferring data collected via handheld terminals to the central system in an aggregated form, rather than at the level of individual sales points, would contribute both to the prevention of competition law infringements and to ensuring data security.
• Access authorization: It is considered that restricting access to competitively sensitive parameters such as prices, quantities, stock levels, territories, and customer information to a limited number of duly authorized personnel, and implementing user-based role definitions, would ensure that data is processed in a manner consistent with its intended purpose.
• Technology and policy integration: It is assessed that digital systems should be automatically supported by mechanisms ensuring lawful data processing, compliance-oriented reporting, and alert functions. Such an integrated approach is considered to contribute both to the mitigation of competition law risks and to the enhancement of operational efficiency.
• Competition law training: It is considered that providing regular competition law training to field sales personnel and managers regarding the use of data collected via handheld terminals, and monitoring whether such training is effectively internalized and implemented in practice, would significantly help prevent potential competition concerns.

Conclusion

The Report clearly demonstrates that, notwithstanding the operational efficiencies provided by handheld terminals, the use of digital tools does not eliminate competition law liability. The anonymization of competitively sensitive data, the restriction of access rights, and the integration of competition law compliance mechanisms into system design are of critical importance in reducing infringement risks. In this respect, the joint structuring of technical infrastructure and internal compliance policies in vertical arrangements involving handheld terminals is considered essential.