Passive Sales Restrictions Revisited – Orzaks and the Limits of Online Sales Restrictions

When does a restriction on a reseller’s online sales amount to an unlawful passive sales restriction, and when can a supplier legitimately control how its products are sold online? The Turkish Competition Authority’s (the “TCA” or the “Authority”) recent decision concerning Orzaks İlaç ve Kimya Sanayi Ticaret AŞ (“Orzaks”) provides a useful starting point for answering the first question, while the Authority’s earlier decisions in Antis and Arçelik help illustrate the second.

The TCA’s decision on Orzaks (the “Orzaks Decision”) does not establish a new legal standard for passive sales restrictions. Rather, it provides a recent illustration of the TCA’s application of the established rules to contractual and commercial practices restricting resellers’ online sales. The decision is also useful when read alongside the TCA’s earlier decisions concerning the circumstances in which restrictions on online distribution may nevertheless be permissible.

The Orzaks Decision: Restricting Resellers’ Online Sales

The Orzaks investigation followed a complaint alleging, among other things, that Orzaks restricted pharmacies’ online sales of its products. The TCA subsequently investigated whether Orzaks had infringed Article 4 of Law No. 4054 on the Protection of Competition (the “Competition Law”) by restricting internet sales, alongside a number of separate allegations concerning its alleged dominant position.

Following service of the Investigation Notice, Orzaks applied to the TCA to resolve the investigation through commitments; however, the TCA accepted Orzaks’ commitment request only in respect of the conducts relating to dominant position allegations but rejected it in respect of the Article 4 allegations. Thus, the Article 4 allegations were ultimately resolved through settlement. In the Orzaks Decision, the TCA found that Orzaks had restricted pharmacies’ ability to sell its products online over an extended period and imposed an administrative fine of TRY 35,681,375.91 (approx. EUR 638 thousand).

The clearest evidence was found in the “Eczanenin Yükümlülükleri” (Pharmacy’s Obligations) clause of Orzaks’ Business Partner Agreement, which was used in this form until 2025. Under that clause, pharmacies were required to sell Orzaks products only from their own premises and were expressly prohibited from selling through online marketplaces such as Hepsiburada, Trendyol and N11 or through social media channels, on pain of termination of the agreement if online sales were detected. The TCA treated it as a restriction of passive sales prohibited under Article 4. In agreements dated 2025, Orzaks removed this prohibition and replaced it with wording stating that Orzaks does not interfere with active or passive sales, while requiring pharmacies to share their sales channels with Orzaks and to sell in line with criteria set by Orzaks to protect its brand image; the TCA found that the revised wording no longer raised concerns under Article 4.

Notably, the on-site inspection did not uncover any instance in which Orzaks had actually terminated a pharmacy's agreement for selling online. The TCA did not consider this absence of enforcement sufficient to eliminate the restriction, however. In the Authority’s assessment, the termination threat in the contract itself was capable of exerting pressure on pharmacies not to sell online, regardless of whether that threat was ever carried out.

The evidentiary picture was reinforced by Orzaks’ commercial practices. Internal communications showed that various benefits including rebates, meal-voucher incentives, loyalty campaigns and shelving support were conditional, in different circumstances, on pharmacies refraining from online sales. The TCA therefore did not assess the contractual provision in isolation. Rather, it considered the contractual restriction together with the surrounding commercial conduct and concluded that Orzaks was treating pharmacies differently because of their online sales activities.

This combination was sufficient for the TCA to characterize the conduct as a restriction of passive sales under Article 4.

Orzaks also sought to rely on Article 24(1) of Law No. 6197 on Pharmacists and Pharmacies, which prohibits the online sale of medicines and bars pharmacies and pharmacists from operating a website for that purpose. Orzaks argued that this regulatory framework, together with advertising and consumer-protection rules applicable to pharmacies, provided a basis for restricting online sales of food supplements as well. The TCA rejected this argument. It found that Article 24(1) addresses medicines only and contains no provision prohibiting the online sale of food supplements, so there was no legal basis for extending a restriction applicable to one product category (medicines) to a different category (food supplements) that the statute simply does not address.

The Orzaks Decision therefore illustrates a relatively straightforward proposition which can be summarized as that a supplier cannot turn a regulatory restriction applicable to one category of products into a general justification for restricting online sales of another category, nor can it achieve the same result indirectly through commercial incentives.

But Is Every Restriction on Online Sales Unlawful?

The answer is no.

The Guidelines on Vertical Agreements (the “Vertical Guidelines”), distinguish between legitimate qualitative requirements governing online distribution and restrictions that effectively prevent or discourage online sales. A supplier may, for example, impose objective requirements concerning the quality of an online sales environment, provided that such requirements do not have the object or effect of eliminating or materially discouraging internet sales.

The more difficult question is therefore not whether online distribution may be regulated, but where the line lies between a legitimate condition of distribution and an unlawful restriction of passive sales.

The TCA’s decisions in Antis and Arçelik illustrate how this distinction operates in practice, moving from a product-specific justification to a negotiated set of proportionate conditions.

Antis Decision: Can Product Characteristics Justify an Online Sales Restriction?

In its 2013 decision concerning Antis Kozmetik ve Ticaret Ürünleri A.Ş. (“Antis”), the TCA considered a selective distribution arrangement under which authorized distributors were prohibited from selling any of Antis’ products online without Antis’ prior written consent (the “Antis Decision”).

The arrangement fell outside the applicable block exemption because of the restriction on online sales. The TCA nevertheless granted individual exemption.

The decisive consideration was the nature of the products and the role of expert advice in their sale. Antis’ products were selective cosmetics distributed through pharmacies, beauty salons and perfumeries. The TCA found that selecting the appropriate product required an assessment of the consumer’s skin type and that professional advice was therefore important both to the consumer’s outcome and to the perception of the brand.

The TCA also noted that the restriction was not absolute that internet sales were not prohibited outright but were subject to Antis’ prior written consent. A separate restriction preventing authorized distributors from reselling to one another applied only to the Dermalogica professional product line, given the specialized training required for its application. The TCA further took into account the presence of substantial inter-brand competition in the market.

Antis Decision therefore suggests that a restriction falling outside the block exemption may nevertheless be capable of justification where it responds to a genuine, product-specific need, is proportionate to its stated objective and does not eliminate effective competition.

The decision is particularly relevant when contrasted with Orzaks Decision. In Orzaks Decision, the Authority found no objective basis for preventing pharmacies from selling food supplements online. In Antis Decision, by contrast, the restriction was linked directly to the characteristics of the products and the service necessary for their appropriate sale.

Arçelik Decision: Justification Must Be Demonstrated, Not Merely Asserted

The more recent Arçelik Decision illustrates a different, but complementary, aspect of the TCA’s approach.

Here, the issue was not a blanket prohibition on online sales, but a series of proposed conditions concerning sales through online marketplaces. The TCA did not accept the proposed restrictions simply because Arçelik Pazarlama A.Ş. (“Arçelik”) presented them as necessary for the organization of its distribution system. Instead, it examined each condition separately and tested whether it was objectively justified and proportionate.

This is particularly clear in relation to the proposed limitation on marketplace sales. The TCA initially rejected proposed 10% cap on marketplace sales as disproportionately restrictive. Arçelik subsequently revised the proposal so that marketplace sales could account for approximately 15% of a dealer’s turnover.

In assessing the revised threshold, the TCA relied on empirical data concerning the actual share of online marketplace sales in the sector, including data considered in its earlier decisions. The evidence indicated that the online marketplace sales of resellers were generally around the proposed level. Against this background, the TCA considered that a 15% threshold would not significantly restrict competition or materially foreclose the marketplace channel.

The same logic informed the TCA’s treatment of other proposed conditions. Measures that effectively increased the cost of marketplace sales, for example, by withdrawing certain commercial support from marketplace transactions, were rejected where they operated as a form of disguised dual pricing or otherwise made online sales less attractive.

By contrast, the TCA accepted conditions based on objective and verifiable criteria, including requirements concerning the presentation of products, the identity of the seller, safeguards against unauthorized resale and certain delivery arrangements. A marketplace-rating requirement was also considered acceptable where the rating was determined according to objective criteria established by the marketplace itself and the dealer was given an opportunity to remedy poor performance.

Arçelik Decision is therefore particularly useful in showing that the assessment of an online sales condition may depend not only on its formal wording, but also on its likely effect in the market and on the evidence available to demonstrate that the restriction remains proportionate.

Conclusion

Taken together, the Orzaks, Antis and Arçelik decisions suggest that the TCA’s approach to online sales restrictions turns less on the existence of a restriction as such than on its justification, design and likely effects. While the Orzaks Decision demonstrates the risks of contractual and commercial practices that operate to discourage online sales, the Antis and Arçelik decisions show that restrictions may be permissible where they respond to a legitimate and sufficiently substantiated objective and remain proportionate to that objective. It is also worth noting the procedural posture of the Orzaks case that the TCA accepted Orzaks’ request to resolve the dominant position allegations through commitments but rejected its commitment request in respect of the internet sales restriction, which was instead resolved through settlement. This stands in contrast to the Arçelik and several other cases, where the marketplace restriction was resolved through commitments. The distinction suggests that the TCA may be less willing to entertain commitments where the conduct amounts to a straightforward restriction of online sales, as opposed to the design of conditions governing how online sales may take place.

For businesses, the practical question is therefore not simply whether an online sales condition is imposed, but why it is imposed, whether that reason can be substantiated, and whether the condition is proportionate to the objective pursued. The TCA’s recent practice suggests that the line is drawn where a legitimate condition of online distribution becomes, in substance or effect, a means of restricting online sales themselves.