Turkey: Insights on the new Amendments to the Turkish Competition Law

Law No.7246 Amending the Law on the Protection of Competition („Amendment Law“) entered into force on 24 June 2020.  This regulation is a response to the European Commission’s 2019 Turkey Report, regarding the steps that Turkey should take in order to harmonize Turkish competition law with that of the EU. It clarifies certain mechanisms in Law No. 4054 which were ambiguous before. New mechanisms are introduced as to the selection of the cases, to the remedies in case of an anti-competitive conduct and to the tools of the Board to end the procedure when the companies agree to settle or offer commitment.

To begin with, the “de minimis principle” is introduced. With this amendment, the Turkish Competition Board (“Board”) will be able to decide not to examine agreements and practices which do not exceed thresholds defined by the Board. Although it is not clear how the Board will define these thresholds, it is logical to expect that the European Commission’s notice on agreements of minor importance which do not appreciably restrict the competition under Article 101 (1) of the Treaty on the Functioning of the European Union will be taken as a reference. Conduct which substantially violates competition such as price fixing, territory/customer sharing and restriction of supply will still be examined even if they fall under the thresholds. 

Furthermore, the “dominance test” is replaced by the “significant impediment to effective competition test” („SIEC“) as a tool for measuring the detrimental effects of mergers and acquisitions. The SIEC Test is used in EU Law and expands the range of mergers and acquisitions which are prohibited. With this change in the law, the Board will be able to prohibit not only transactions that may result in creating a dominant position or strengthening an existing dominant position, but also those that can significantly impede competition. 

Another important change is that the Amendment Law gives the Board power to order structural remedies in exceptional cases, in addition to behavioural remedies. When an undertaking or an association of an undertaking engages in anti-competitive conduct, first, the behavioural remedies will be applied like before. With the amendment law, an additional process of structural remedies will be operating when the behavioural remedies are determined to have failed.  

In addition, two mechanisms which are inspired by EU law are introduced: commitment and settlement. The purpose of these mechanisms is to provide the Board the opportunity to end the investigations without going through the whole investigation procedure. 

As the first mechanism, the companies are able to voluntarily offer commitments during any part of the investigations to make the Board sure that they will abide by the prohibition of restrictive agreements and abuse of dominance.  Based on the decision of the Board on the timing and sufficiency of the commitment, it will be determined if the investigation will be continued or not.  The investigation can be re-launched by the Board in the event of non-compliance with the commitment, material changes concerning the facts on which the decision was based or false information that is found to be included. 

Besides this, the Board is enabled to initiate the settlement procedure ex officio (of its own motion) or upon parties’ request, as a second mechanism for the closure of the investigation. In the event of settlement, a final decision will be made including the possibilities of the finding of a violation and an administrative monetary fine. If settled, the administrative monetary fine can be reduced up to 25%.  However, by entering in to a settlement, the violation is acknowledged by the defendant, which will make it possible for the other party to demand compensation. 

It is clarified in the Amendment Law that the authority may inspect and make copies of all the information and documents in companies’ physical records as well as those in electronic clouds and IT systems. The Board was already making use of this power earlier, but this was not clarified in the law before the amendment. 

Moreover, the Amendment provides for the applicability of self-assessment to certain agreements, concerted practices or decisions of associations of undertakings. Self-Assessment is a mechanism where market players assess the compatibility of their conduct with the relevant competition law.

Lastly, the Board used to have 15 days to provide the additional report after they completed the investigation period. With the new development in the law, the Board has an option to double the period and prepare its additional report in up to 30 days.

In essence, the Amendment reflects the experience of the Board over 20 years and it is a profound movement in the direction of bringing the Turkish competition law closer to EU law. Without any doubt, the new changes will provide more efficiency in terms of time and resources dedicated to the procedure. 

Dr Gökce Uzar Schüller
Frankfurt a.M. and Istanbul
Gülce Sepin, Trainee 
Frankfurt a.M. 

October 2020