Drugmakers fined in Turkey over competition breaches | ICLG
Novo Nordisk, Novartis and Pfizer among the 17 companies slapped with penalties for engaging in no-poach agreements and the exchange of sensitive employment information.
Turkey’s competition regulator, Rekabet Kurumu, announced on Friday (17 October) that it has levied TRY 245 million (GBP 4.4 million) in penalties against 17 companies found to have participated in no-poach agreements or the exchange of competitively sensitive information in breach of Article 4 of the Act on the Protection of Competition 1994.
HIT TO PHARMA
The majority of the fined companies operate in Turkey’s pharmaceutical sector. They include the Turkish arms of global drugmakers AstraZeneca, Novo Nordisk, Pfizer, Sanofi and Novartis, as well as local pharmaceutical giants Santa Farma, Ilko and Sanovel.
Istanbul-headquartered Sanovel was reportedly slapped with the heftiest fine and will be forking out TRY 79 million (GBP 1.4 million). Pfizer followed with a TRY 20 million (GBP 355,000) penalty, while Novartis and Novo Nordisk were hit with TRY 19 million (GBP 337,000) each in fines. Sanofi, Ilko and AstraZeneca were ordered to pay between TRY 12 and TRY 15 million (between GBP 213,000 and 266,000).
INFORMATION SHARING
The watchdog’s probe found that Novartis, Novo Nordisk, Sanofi, Pfizer, Merck and AstraZeneca, among other companies, had violated the country’s competition law by exchanging competitively sensitive information on future employee wages and benefits. The regulator emphasised that under the law, illicit information-sharing relates to that which “affects or may potentially affect the strategic behaviour and decisions of the competitors among actors operating in the same market”. (Google translation)
This is not the first time global pharmaceutical companies have found themselves under scrutiny in Turkey. In 2021, the competition regulator slapped Novartis and Roche with administrative penalties for colluding to ramp up the sales of a more expensive eye disease medication. That fine was overturned by a Turkish court in 2023.
NO-POACH
Sanovel, Santa Farma and Ilko were among the 10 companies found to have acted in breach of the 1994 Act by engaging in no-poach agreements, where competitors pledge not to hire or solicit each other’s employees.
No-poach agreements have been the subject of increasing scrutiny and regulatory action across Europe. At the beginning of June, the European Commission levied an EUR 329 million (GBP 286 million) against European delivery giants Delivery Hero and Glovo for engaging in cartel conduct in the online food delivery sector by, among other things, agreeing not to hire each other’s employees. That decision marked the first time the Commission had ever sanctioned a no-poach agreement. Later that month, the French Competition Authority slapped three companies in the engineering, consulting and IT services sector with fines totalling EUR 29.5 million (GBP 26 million) for their participation in no-poach agreements. The case was notable as the first instance of no-poach agreements being sanctioned as standalone infringements.
