TÜRKIYE Trends and Developments Contributed by: Gönenç Gürkaynak, K Korhan Yıldırım and Görkem Yardım, ELIG Gürkaynak Attorneys-at-Law
The Board, in its reasoned decision, notes that Bupa International operates globally in the fields of health insurance, healthcare and elderly care, while Bupa Turkey provides consultancy ser - vices in areas such as strategy, finance, mar - keting and trade mark matters. Concerning the relevant product market, the Board identified “information technology systems and opera - tional support for health insurance companies” and ”sickness-health insurance”. The Board further considered segmenting the insurance market into “complementary health insurance” and ”private health insurance” due to the prod - uct focus of the software. However, since this segmentation did not affect the merger control review outcome, the Board based its analysis on the broader market definition and left the rel - evant market definition open. The Board assessed the transaction under the Guideline on Non-Horizontal Mergers and Acquisitions, highlighting primary anti-compet - itive risks: (i) input foreclosure (ie, when a sup - plier could insulate a significant part, or even the entirety, of the upstream market by limiting rivals’ access post-acquisition, having effects such as heightening entry barriers), (ii) customer foreclosure (ie, output foreclosure, when a verti - cal merger restricts upstream rivals’ access to the downstream), and (iii) the potential for co- ordinated effects that could restrict competition. Regarding input foreclosure, the Board expressed concerns that, after the transaction, Compugroup Medical might cease providing its software services and operational support to competitors of Bupa Acıbadem Sigorta AŞ (“Bupa Acıbadem”), a subsidiary of Bupa Inter - national in Türkiye. The Board reviewed the market shares of Compugroup Medical and con - cluded that it holds a significant market share in the relevant sector and is a market leader in
terms of both the customer base and premium production volumes of insurance companies. Based on this, the Board concluded that Com - pugroup Medical’s potential cessation of ser - vices to competitors in the healthcare insurance sub-market could significantly restrict access to essential inputs and potentially result in market foreclosure. Regarding customer (or output) foreclosure, the Board noted that since the merged entity will operate in both the upstream and downstream markets after the transaction, the acquisition could limit the ability of existing and potential competitors in the upstream market to access a significant customer base in the downstream market. However, following an assessment of market shares, the Board concluded that, post- transaction, Compugroup Medical’s competi - tors will still be able to access potential cus - tomers, and that the services provided by Bupa Acıbadem will remain largely unchanged. As such, the Board determined that the transaction will not result in significant customer foreclosure or significant impediment of effective competi - tion. Regarding co-ordinated effects, the Board judged that Compugroup Medical’s potential to share sensitive data with Bupa Acıbadem could create competitive concerns, from both a unilateral and a co-ordination perspective. The Board also considered that vertical transactions can increase transparency in the market, allow - ing for access to sensitive information or price monitoring, which could facilitate co-ordination among undertakings. To alleviate the Board’s anti-competitive con - cerns, Bupa submitted behavioural remedies pertaining to the maintenance of existing con - tracts between Compugroup Medical and insur -
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