Newsletter-21

153 COMPETITION LAW The MFN Clause successfully binds competitors to cartel agree- ments by increasing the cost of cheating; namely, the cost of price- cutting, given that price-cutting to any client should be reflected to all MFN’s with the same conditions. This phenomena increases the cost of price-cutting more than it was intended so that any attempt to violate the cartel agreement that has been set between the competitors, becomes more costly. This diminishes the chance of any attempt of cheating; thus, violating competition law by facilitating a non-compet- ing environment. There are other adverse effects of the MFN Clause on the ideal of having a perfectly competitive market, apart from what we have discussed thus far 7 . Maybe the most important effect of the MFN Clause is that it demotivates the bargaining will of a buyer in the long-term given that any discounts that will come out of this bargain- ing process will have to be reflected by the seller to other MFN’s that are direct competitors in the same market. This “free-rider effect” will curb the motivation of any buyer in the market to negotiate with a seller in the long-run, thus enabling a more stable price level and a non-competing environment in a specific market. After considering all of the above-stated arguments, it is possible to conclude that the MFN Clause is a vertical price limitation that ren- ders price-cutting a very costly attempt to cheat the agreement by any seller/supplier, thus eliminating the pricing flexibility of the suppliers/ sellers in the market. Especially when the MFN Clause is honored by most of the players in a specific market, it creates a transparent market structure that eases the determination of any cheating player in a cartel agreement. Such a transparent market structure makes it easier to sustain the competition violations in the market and, therefore, it is anti-competitive. Accordingly, several investigations have been launched regarding the MFN Clause within the EU market. The Commission’s decision of 2013 on E-book 8 , which was subject to several commitments, was 7 For more detailed information please see: Kekevi Gökşin, Anlaşma, Uyumlu Ey- lem ve Birlikte Hakim Durumun Kötüye Kullanılmasında Kolaylaştırıcı Eylem- ler, Yayınlanmış Uzmanlık Tezi, Rekabet Kurumu, Ankara 2003, p.4 http://www. rekabet.gov.tr/File/?path=ROOT%2f1%2fDocuments%2fUzmanl%25c4%25b1 k%2bTezi%2ftez21.pdf (Access Date: 21.06.2016). 8 Case COMP/39.847/E-Books: http://ec.europa.eu/competition/antitrust/cases/