Annual benefit of 67.3 billion liras to the consumer from the Competition Council

It has been calculated that the decisions taken by the Competition Board provide an annual average of 67.3 billion liras to consumer welfare.

The Competition Authority has prepared a study titled “2021-2022 Impact Analysis Report” on the activities of the institution.

While the Authority has been working on the claim of the measurable effects of its activities on consumer welfare since 2017, this report tried to measure the financial contribution of various decisions taken by the Competition Board over the past two years to consumer welfare.

The Competition Authority’s Economic Analysis and Research Department Leader Şamil Pişmaf stated that the focus of competition law is consumer welfare and said, “Increasing consumer benefit is a valuable part of our corporate mission.”

Referring to the impact of the Board’s decisions on the daily lives of consumers, Pişmaf said that as the Institution, they can quickly become involved in any area where the consumer is a direct or indirect party.

“Prices are the first contribution of the Board’s decisions to the consumer”

Noting that the Council’s decisions are in an approach that protects and protects the consumer in a wide range from the applications the consumer uses in digital media to the works he puts on his table, Pişaf said, “In this sense, the first thing that comes to mind is lower prices. In addition, increased quality, more freedom of choice, the consumer’s ability to choose. It is possible to talk about many benefits such as promoting new works that make life easier.For instance, with the discontinuous precautionary decision taken by the Council in the Facebook/WhatsApp document, consumers were able to continue using WhatsApp without having to share their information with WhatsApp and other platforms owned by Facebook (Meta). ‘ he evaluated.

Remarking the results achieved in the Impact Analysis Report, Pişmaf said:

“In our calculations according to the OECD criteria, it is assumed that the decisions of the Committee examined within the scope of the study for the 2021-2022 period provide the consumer with a total benefit of 134.6 billion liras and an annual average of 67.3 billion liras. If we talk about these assets in dollars, the total benefit to the consumer in the relevant period We are talking about a contribution of 13.1 billion dollars, an annual average of 6.55 billion dollars. Comparing the numbers reached with the national income accounts may be more useful in terms of understanding the size of the contribution. Therefore, the annual average benefit calculated within the scope of the study corresponds to approximately 7.7 per thousand of the GDP, and the total benefit is approximately 1.5 percent. It shows that there is a level.”

Noting that in the report, only the decisions of violation regarding cartel and similar actions, determination of the resale price and misuse of the dominant position, and the decisions of the Board on conditionally permitted mergers and acquisitions processes were taken into account, “More We do not include administrative fines in the calculations. It should be underlined that in the 2021-2022 period, a total fine of over 6 billion liras was imposed by the Council, but as I mentioned, this 6 billion lira is not included in the contribution to the benefit of the consumer.

“The highest benefit so far has been achieved in these 2 years”

Comparing the report, which was prepared at bi-annual intervals, with previous years, Pişmaf said, “In the last two years, the heaviest period in the history of the Institution has been left behind. The Council completed a total of 336 investigations in 1998-2020. It corresponds to approximately 15 investigations per year on average. 2021-2022. The number of investigations completed during the period is 69. We carried out our first impact analysis study, covering the period 2014-2016, in 2017. The highest cost calculated before that was the consumer benefit contribution of 3.8 billion dollars, which was claimed for the year 2014 in the study. “We see that the annual average benefit is calculated at around $800 million. In this regard, the 2021-2022 period stands out as the period with the highest consumer benefit ever recorded.”

Noting that different competition authorities, the European Committee and the OECD examined the criteria in this area when calculating the contribution to the benefit of the consumer, Pişf said:

“The calculations basically take into account the assumptions about the turnover affected by the violation, the rate of price increase that was prevented by the decision, and the timeframe when the price increase would be effective if the violation was not prevented. Determination of these is shaped by the evaluation of the approaches of the OECD and competition authorities. Considering these studies, two different scenarios are taken into account. Claims have been made. The calculation of the numbers is essentially based on the methodology in the OECD’s guide.”

“A new report will be prepared”

Emphasizing that in the impact analysis reports prepared in the USA and England, the total public resource used by the competition authority, that is, the budget, is used as an indicator of activity, and said:

“In summary, the cost of the authority to taxpayers and how much consumer welfare increase it provides are compared. The ratio in question changes between 20 and 75 for the USA and England. We make a similar comparison in our report. Accordingly, the 2021-2022 period of the Competition Authority. It is seen that the total welfare increase achieved by its activities is over 200 times its total budget for the same transfer. We appreciate that this rate is a valuable indicator of the Agency’s activity in realizing its mission of protecting competition and thus contributing to consumer welfare.”

Pişmaf added that they plan to repeat the work in two-year cycles and to publish the next impact analysis report, which will deal with the 2023-2024 period, at the beginning of 2025.