Resale Price Maintenance in Turkey: Legal Risks for Suppliers and Distributors

Introduction

Resale price maintenance in Turkey is one of the most sensitive issues under Turkish Competition Law. It directly concerns the relationship between suppliers and distributors, manufacturers and dealers, franchisors and franchisees, wholesalers and retailers, and online platforms and sellers. In commercial practice, suppliers often want to protect brand image, prevent aggressive discounting, preserve dealer margins, maintain a premium market position, or ensure consistency across sales channels. However, when these commercial objectives are pursued by restricting the reseller’s freedom to determine its resale price, serious competition law risks may arise.

Under Turkish law, resale price maintenance, commonly referred to as RPM, generally occurs when a supplier directly or indirectly determines, fixes, enforces, pressures, or controls the resale price of its buyer. This may involve fixed resale prices, minimum resale prices, maximum discount rates, pressure to comply with recommended prices, threats against discounting dealers, bonus reductions, supply restrictions, termination warnings, or online price monitoring used as a tool of enforcement.

The main legal basis is Article 4 of Law No. 4054 on the Protection of Competition, which prohibits agreements, concerted practices, and decisions of associations of undertakings that have as their object, effect, or likely effect the prevention, distortion, or restriction of competition in a market for goods or services. The Turkish Competition Authority’s vertical agreement framework also makes clear that fixed and minimum resale price maintenance is a hardcore restriction that prevents a vertical agreement from benefiting from the block exemption regime.

For suppliers and distributors operating in Turkey, RPM compliance is not merely a contract drafting issue. The Turkish Competition Board examines actual conduct, internal correspondence, emails, WhatsApp messages, dealer complaints, price tracking reports, sales team instructions, bonus systems, supply interruptions, online marketplace screenshots, and termination practices. Therefore, even if a written contract states that dealers are free to set their prices, the company may still face liability if its real-world conduct restricts resale pricing freedom.

1. What Is Resale Price Maintenance?

Resale price maintenance is a vertical restraint that interferes with the buyer’s ability to determine its own resale price. In a typical vertical relationship, a supplier sells goods to a distributor or retailer, and the distributor resells those goods to end customers. Under competition law, the reseller must normally remain free to decide the resale price independently.

RPM may take several forms. The most obvious form is a written clause stating that the distributor must sell the product at a fixed price. Another direct form is a minimum resale price clause, which prevents the reseller from selling below a certain level. However, RPM is not limited to written contractual clauses. It may also be established through indirect pressure, commercial incentives, sanctions, monitoring systems, or communications that effectively force resellers to follow the supplier’s pricing expectations.

For example, a supplier may send a “recommended price list” to dealers. This is not automatically illegal. However, if the supplier then monitors the dealers’ online prices and warns those selling below the recommended price, the recommendation may become an enforced price. Similarly, if the supplier reduces bonuses, delays deliveries, limits stock, cuts marketing support, or threatens termination because a dealer discounted products, the conduct may be treated as resale price maintenance.

The Turkish Competition Authority’s Guidelines on Vertical Agreements expressly recognize this distinction. The supplier may set maximum prices or recommend resale prices, provided that these do not transform into fixed or minimum resale prices through pressure or incentives. Fixed and minimum resale prices are treated as prohibited restrictions.

2. Legal Framework: Law No. 4054 and Communiqué No. 2002/2

The legal framework for RPM in Turkey consists mainly of three instruments: Law No. 4054 on the Protection of Competition, Block Exemption Communiqué No. 2002/2 on Vertical Agreements, and the Guidelines on Vertical Agreements.

Article 4 of Law No. 4054 prohibits restrictive agreements and concerted practices. It expressly covers practices that directly or indirectly fix purchase or sale prices, as well as other trading conditions. Therefore, an agreement between a supplier and reseller that fixes resale prices may fall within Article 4.

Communiqué No. 2002/2 provides a block exemption for certain vertical agreements. This regime allows many distribution and supply agreements to benefit from exemption if they satisfy the relevant conditions. However, the block exemption does not apply where the agreement contains certain hardcore restrictions. One of the most important hardcore restrictions is the prevention of the buyer’s freedom to determine its resale price. The supplier may impose a maximum resale price or recommend a resale price only if this does not amount to a fixed or minimum sale price as a result of pressure or incentives.

This means that RPM clauses are not simply “risky”; they can remove the entire vertical agreement from the safe harbor of block exemption. Once the block exemption is lost, the agreement may still theoretically be assessed under individual exemption principles, but fixed or minimum resale price maintenance is highly difficult to justify because it directly restricts intra-brand price competition.

3. Why RPM Is Treated Seriously in Turkey

RPM is treated seriously because it restricts price competition at the resale level. In a properly functioning distribution market, resellers should compete with each other on price, service quality, delivery speed, stock availability, customer support, warranty handling, and after-sales service. When the supplier fixes the resale price, one of the most important dimensions of competition is removed.

RPM can harm consumers by increasing prices, reducing discounts, limiting online price competition, and preventing efficient resellers from passing cost advantages to customers. It can also protect inefficient dealers from price pressure and reduce the incentive to improve service. In some cases, RPM may facilitate coordination among resellers because all dealers know that the supplier will discipline discounting behavior.

From a supplier’s perspective, there may be commercial reasons for seeking price consistency. The supplier may believe that aggressive discounting harms brand image, creates conflict among dealers, reduces service quality, or undermines investment incentives. Turkish competition law does not ignore these commercial concerns entirely. However, it requires suppliers to address them through lawful methods, not by fixing or enforcing minimum resale prices.

For example, a supplier may impose objective quality standards, require proper product presentation, regulate authorized dealer criteria, set service standards, provide non-binding recommended prices, or use selective distribution systems where legally appropriate. But it cannot directly or indirectly force independent resellers to sell at or above a specific price.

4. Fixed Prices, Minimum Prices and Maximum Prices

The distinction between fixed, minimum, maximum and recommended prices is central to RPM analysis.

A fixed resale price means that the reseller is required to sell at a specific price. This is generally prohibited. A minimum resale price means that the reseller may not sell below a specified price. This is also generally prohibited. A maximum resale price means that the reseller may not sell above a specified price. Maximum resale prices may be permitted if they do not operate as fixed or minimum prices in practice. A recommended resale price is a non-binding suggestion by the supplier. It may be permitted if the reseller remains genuinely free to deviate from it.

The legal risk arises when maximum or recommended prices are used as disguised fixed prices. For example, if the supplier says that the price is “recommended” but then punishes resellers who do not comply, the label will not protect the supplier. Competition authorities examine substance rather than form.

Therefore, companies should not assume that placing the word “recommended” in a price list is enough. The internal and external conduct must be consistent with genuine pricing freedom. Sales managers should not instruct dealers to “correct” prices, “align” with the list, “avoid discounting,” or “protect the market price.” Such language may be used as evidence of RPM.

5. Direct RPM: Contractual Clauses and Written Instructions

Direct RPM usually appears in the form of contractual provisions or written instructions. Examples include:

“The distributor shall resell the products at the prices determined by the supplier.”

“The dealer shall not sell below the list price.”

“The reseller may apply discounts only with the supplier’s approval.”

“The dealer must comply with the minimum price list.”

“The franchisee shall sell products at the prices announced by the franchisor.”

Clauses of this kind are highly problematic. Even if they are not enforced, their presence in a contract may create legal risk because they restrict the reseller’s commercial autonomy. A well-drafted Turkish distribution agreement should expressly state that the reseller is free to determine its resale prices independently.

A safer clause may say that the supplier may issue non-binding recommended resale prices, but the buyer remains fully free to determine its own resale prices, discounts, campaigns and commercial conditions. However, this clause must also be respected in practice. If the supplier’s sales team pressures dealers despite the written wording, the company may still be exposed.

6. Indirect RPM: Pressure, Incentives and Sanctions

In practice, RPM cases often involve indirect conduct rather than explicit contractual clauses. Turkish competition enforcement pays close attention to such indirect mechanisms.

Indirect RPM may include:

• threatening dealers who sell below recommended prices;
• reducing or cancelling bonuses because of discounting;
• delaying or limiting supply to low-price resellers;
• requiring prior approval for discounts;
• setting maximum discount rates;
• setting dealer profit margins;
• monitoring online prices and warning non-compliant sellers;
• terminating or not renewing agreements due to low resale prices;
• collecting complaints from dealers about discounting competitors and acting on those complaints;
• using stock allocation to discipline price-cutting dealers;
• conditioning campaign support on price compliance.

The Guidelines on Vertical Agreements specifically refer to indirect methods such as fixing the buyer’s profit margin, determining maximum discount rates, making discounts conditional on compliance with recommended prices, delaying or suspending deliveries, or terminating agreements due to non-compliance with recommended prices.

This is especially important because many companies do not write illegal clauses into contracts but create practical pressure through commercial management. The Competition Board may treat these practices as RPM if they effectively restrict the reseller’s pricing freedom.

7. Online Price Monitoring and E-Commerce Risks

Online sales have increased RPM risks significantly. Suppliers can now easily monitor dealer prices on websites, marketplaces and comparison platforms. Price tracking software, marketplace dashboards, screenshots, automated alerts and dealer complaint systems may all create evidence.

Online price monitoring is not automatically illegal. A supplier may monitor market prices for legitimate commercial reasons, such as understanding market dynamics, identifying counterfeit products, tracking unauthorized sellers, or assessing brand positioning. However, monitoring becomes risky when it is used to enforce minimum resale prices.

For example, if a supplier tracks online prices and sends warnings such as “your price is below the recommended level,” “please revise your marketplace price,” or “do not damage the market price,” this may support an RPM finding. The risk increases further if the supplier follows up with sanctions, supply limitations or bonus reductions.

E-commerce also intensifies dealer complaints. Traditional retailers may complain that online sellers are discounting too aggressively. If the supplier responds by pressuring online sellers to increase prices, the supplier may become a price enforcer within the distribution network. This can also create hub-and-spoke concerns where the supplier facilitates alignment among competing resellers.

8. Dealer Complaints and Hub-and-Spoke Concerns

Dealer complaints are a common trigger for RPM investigations. A dealer may complain to the supplier that another dealer is selling too cheaply. The supplier may then contact the discounting dealer and ask it to raise its prices. If this pattern repeats, the supplier may be seen as coordinating resale prices among dealers.

This creates a potential hub-and-spoke risk. In a hub-and-spoke arrangement, a vertical actor such as a supplier or distributor acts as the hub through which competing resellers indirectly coordinate. The Turkish Competition Authority has discussed hub-and-spoke risks in its international submissions and referred to cases involving vertical price fixing and retailer coordination in consumer electronics and computer/video game markets.

Companies should therefore implement a clear policy for dealer complaints. Complaints about counterfeit goods, quality problems, misleading advertising, unauthorized sales, or trademark misuse may be reviewed. But complaints about another dealer’s low price should not be used as a basis to pressure that dealer. Sales teams should be trained to respond carefully and avoid becoming a mechanism for dealer-level price coordination.

9. RPM in Franchise Systems

Franchise systems often require a certain degree of uniformity. Franchisors may want consistent brand image, product quality, service standards, store design, packaging and customer experience. However, franchise agreements are not exempt from RPM rules.

A franchisor may provide recommended prices or campaign suggestions, but franchisees should generally remain free to determine resale prices unless a specific and lawful exception applies. Fixed menu prices, mandatory campaign prices, minimum resale prices or restrictions on franchisee discounts may create RPM risk.

Franchise systems should distinguish between brand standards and price control. It may be lawful to require franchisees to use approved materials, follow quality standards, comply with operational manuals and protect intellectual property. But it is risky to impose binding resale prices or prevent franchisees from offering discounts.

10. RPM in Selective Distribution and Luxury Goods

Selective distribution systems are common in luxury goods, cosmetics, electronics, medical devices and branded consumer products. Suppliers may select authorized dealers based on objective quality criteria. They may impose requirements concerning store appearance, trained personnel, after-sales service, product presentation and online sales standards.

However, selective distribution does not justify RPM. Authorized dealers must generally remain free to determine their resale prices. A supplier may protect brand image through quality criteria, but it should not use the selective distribution system to eliminate discounting.

For example, requiring an online seller to present the brand professionally may be legitimate. Requiring that online seller not to discount below a certain price is a different issue and may constitute RPM.

11. Administrative Fines and Enforcement Risk

If the Turkish Competition Board finds that a company has violated Article 4 through RPM, it may impose administrative fines. Under Law No. 4054, substantive competition law violations may lead to fines of up to 10% of the annual gross revenue of the relevant undertaking. Managers or employees with decisive influence in the infringement may also face personal fines.

Recent enforcement practice confirms that RPM remains a live issue in Turkey. For example, the Turkish Competition Authority announced in 2025 that an investigation concerning Fakir Elektrikli Ev Aletleri concluded that the undertaking violated Article 4 of Law No. 4054, with a 25% settlement discount applied to the administrative fine. The Authority has also referred in OECD materials to administrative fines imposed in relation to resale price maintenance in the fast-moving consumer goods context.

These examples show that RPM is not a theoretical concern. It is an active enforcement area, particularly in sectors involving strong brands, dealer networks, online sales, consumer goods, electronics, household appliances, cosmetics and retail distribution.

12. Evidence Used in RPM Investigations

RPM investigations often depend on documents and communications. The Turkish Competition Authority may examine:

• distribution agreements;
• dealer contracts;
• price lists;
• recommended price announcements;
• internal emails;
• WhatsApp messages;
• dealer complaint records;
• online price monitoring reports;
• screenshots from marketplaces;
• sales team instructions;
• bonus and rebate systems;
• termination correspondence;
• stock allocation records;
• meeting notes;
• internal presentations.

Language is extremely important. Phrases such as “bring the price to the list level,” “do not go below the market price,” “we warned the dealer,” “we will stop supply if they discount,” or “all dealers must comply with the recommended price” may be damaging.

Companies should therefore train employees on competition-sensitive language. Internal communications should accurately reflect lawful business purposes. Employees should avoid informal statements suggesting price control.

13. Can RPM Ever Be Justified?

In theory, restrictive vertical agreements may be individually assessed under Article 5 of Law No. 4054 if they generate efficiencies, benefit consumers, do not eliminate competition in a significant part of the market, and do not restrict competition more than necessary. However, fixed and minimum RPM are generally treated as serious restrictions, and it is difficult to justify them.

Suppliers sometimes argue that RPM prevents free riding, protects brand image, ensures service quality, supports dealer investment, or prevents destructive price competition. These arguments may be commercially understandable, but Turkish competition law usually expects companies to use less restrictive alternatives.

For example, instead of fixing resale prices, a supplier may:

• impose objective quality standards;
• provide recommended non-binding prices;
• offer training and service support;
• use selective distribution criteria;
• regulate advertising standards;
• monitor counterfeit or unauthorized sales;
• provide transparent and lawful rebate systems;
• support dealers through lawful marketing campaigns.

The key question is proportionality. If the business objective can be achieved without restricting resale prices, RPM is unlikely to be justified.

14. Practical Compliance Rules for Suppliers

Suppliers operating in Turkey should adopt a clear RPM compliance policy. The policy should be communicated to sales, marketing, distribution, franchise, e-commerce and management teams.

A supplier should not impose fixed or minimum resale prices. It should not pressure dealers to comply with recommended prices. It should not punish dealers for discounting. It should not condition bonuses on resale price compliance. It should not use online monitoring to enforce minimum prices. It should not respond to dealer complaints by disciplining discounting dealers.

Recommended price lists should clearly state that they are non-binding. Dealer agreements should expressly preserve pricing freedom. Sales employees should receive practical training with examples. All communications with resellers should be reviewed from a competition law perspective.

Suppliers should also audit their rebate and bonus systems. If a bonus system appears neutral but in practice rewards compliance with recommended prices, it may create RPM risk. Similarly, campaign support should not be used to impose minimum resale prices.

15. Practical Compliance Rules for Distributors and Dealers

Distributors and dealers also face legal risks. A reseller should not ask the supplier to discipline another dealer because of low prices. It should not coordinate with other dealers through the supplier. It should not exchange pricing intentions with competing resellers. It should not participate in dealer-level price alignment.

If a supplier pressures a dealer to increase resale prices, the dealer should handle the matter carefully and seek legal advice. Silence, acceptance or repeated compliance may create evidence of a restrictive arrangement. Dealers should preserve records and avoid communications suggesting agreement to maintain prices.

Dealers should also review their own conduct in marketplaces, franchise networks and trade associations. Competition law applies not only to suppliers but also to buyers and resellers that participate in restrictive arrangements.

16. Drafting Tips for Distribution Agreements

A Turkish distribution agreement should include competition-compliant pricing language. It should state that the distributor is independent and free to determine resale prices. It may allow the supplier to issue non-binding recommended resale prices or maximum resale prices, but only if the distributor remains free to sell below recommended prices.

The agreement should avoid clauses requiring approval for discounts, restricting minimum sale prices, fixing margins or mandating compliance with campaigns. If the supplier organizes promotional campaigns, the structure should be reviewed carefully. Short-term genuine promotions may be possible in certain circumstances, but they should not become a general mechanism for price control.

The agreement should also include compliance obligations, lawful communication rules, and procedures for handling dealer complaints. However, a compliance clause alone is not enough. The company’s actual conduct must match the written agreement.

17. RPM and Settlement Procedures

In some investigations, undertakings may use settlement procedures. Settlement may reduce the administrative fine if the undertaking accepts the existence and scope of the infringement under the applicable procedural rules. The Fakir announcement, for instance, refers to a 25% discount applied to the administrative fine.

Settlement may be useful where evidence is strong and the company wants to reduce uncertainty. However, it has legal consequences and should be assessed carefully. A settlement may affect future litigation strategy, reputational risk and possible follow-on damages claims. Companies should evaluate settlement together with the strength of evidence, commercial consequences, potential private claims and broader compliance remediation.

18. Private Law Risks and Damages Claims

RPM may also create private law consequences. If an agreement violates Article 4, the relevant restrictive clauses may be invalid. Customers, dealers or competitors may also attempt to claim damages if they can prove loss caused by the infringement.

In practice, private damages claims in RPM cases may be complex because the claimant must establish damage, causation and the amount of loss. However, a Competition Board infringement decision can increase litigation risk. Therefore, companies should not assess RPM only in terms of administrative fines. Civil exposure, contract disputes, termination claims, dealer conflicts and reputational damage should also be considered.

19. High-Risk Sectors for RPM in Turkey

RPM risks may arise in many sectors, but certain industries are particularly exposed. These include consumer electronics, household appliances, cosmetics, luxury goods, pharmaceuticals, medical devices, automotive spare parts, fast-moving consumer goods, food and beverages, furniture, fashion, online retail, franchise chains, e-commerce marketplaces and branded consumer products.

The risk is higher where suppliers have strong brands, dealers operate with narrow margins, online discounting is visible, and traditional retailers complain about price competition from e-commerce sellers. It is also higher where sales teams are evaluated based on maintaining dealer satisfaction rather than compliance.

20. Conclusion

Resale price maintenance in Turkey is a major competition law risk for suppliers, distributors, franchisors, franchisees, online sellers and dealer networks. Turkish law does not prohibit suppliers from recommending resale prices or setting maximum prices in appropriate circumstances. However, it does prohibit fixed or minimum resale prices and any direct or indirect conduct that restricts the reseller’s freedom to determine its own price.

The most dangerous RPM practices include mandatory price lists, minimum resale price clauses, maximum discount limits, threats against discounting dealers, bonus reductions, supply restrictions, online price enforcement, dealer complaint-based interventions and disguised pressure through commercial incentives. The Turkish Competition Authority looks at economic reality, not only contractual wording.

For companies operating in Turkey, the safest approach is proactive compliance. Distribution agreements should be reviewed carefully. Sales teams should be trained. Recommended prices should remain genuinely non-binding. Dealer complaints should be handled lawfully. Online price monitoring should not be used to enforce minimum prices. Bonus systems, campaigns and termination practices should be audited from a competition law perspective.

A well-designed RPM compliance program protects not only against administrative fines but also against reputational damage, dealer disputes, private damages claims and regulatory scrutiny. In Turkey’s increasingly digital and price-transparent markets, suppliers and distributors must treat resale price maintenance as a priority competition law issue.