Prohibited Actions And Exemptions in Turkey
Prohibited Actions
The Competition Law lists instances it considers prohibited, but these are not limited in numbers. Any and all agreements and concerted practices with similar efects as below shall be deemed to be in breach of the Competition Law:
(i) determining (i) purchase or sale prices or (ii) factors such as cost and proit or (iii) conditions governing the purchase and sales of
goods and services,
(ii) sharing or controlling market of goods or services and sources of supply of the market,
(iii) controlling the supply or demand or determining such factors outside of the relevant market,
(iv) aggravating or restricting activities of competitors, or eliminating other undertakings that operate in the market by
boycotts or other practices, or preventing newcomers from entering into the market,
(v) except for exclusive dealership agreements, applying dissimilar conditions to equivalent transactions with other trading parties, and
(vi) making the conclusion of contracts subject to
(i) purchase of another good or service,
(ii) display of another good or service, or
(iii) re-supply of goods and services in contradiction to the nature of the agreement or commercial usage.
Nonetheless, the Competition Law allows each undertaking being party to such agreement or concerted practice to defend against such liability by demonstrating that their actions do not constitute a breach of the Competition Law on the basis of economic rationale. Each such undertaking may also beneit from immunity and leniency which would be in the form of full immunity or a reduction of administrative fine.
Pursuant to an oicial enquiry and investigation, the Competition Authority may impose administrative ines and apply other necessary measures such as cancelling the agreement or reversing any beneit derived therefrom. Although not very common, it may also ile a criminal complaint if the agreement or practice breaching the Competition Law constitutes a criminal act. Depending on the gravity of the infringing act, the Competition Authority may ine (i) each concerned undertaking up to 10% of its Turkish turnover generated in the inancial year preceding its decision’s date; and (ii) each director or employee of such undertaking that had a determining efect on the infringement up to 5% of the concerned undertaking’s fine.
Exemptions
Prohibited agreements or practices may beneit from an exemption established or granted by the Competition Authority. Exemptions provided under the Turkish competition legislation can be classiied under two sub-sections: block exemptions and individual exemption.
Currently, block exemptions granted by the Competition Authority consist of the:
(i) general block exemption on vertical agreements,
(ii) block exemption on vertical agreements and concerted practices in the motor vehicle sector,
(iii) block exemption on research and development agreements,
(iv) block exemption on specialisation agreements,
(v) block exemption on the insurance sector, and
(vi) block exemption on technology transfer agreements.
To beneit from any of the block exemptions, the relevant agreement or practice must fulil certain criteria set forth under each corresponding communiqué of the Competition Authority including without limitation a market share below 40% or 30% depending on the market. Exemption will stand as long as the criteria are met. Where an agreement or practice does not or cannot beneit from any of the block exemptions, parties may request the Competition Authority to grant an individual exemption. The Competition
Authority may grant such individual exemption provided that such agreement or practice:
(i) contributes to new developments or the technical or economic improvement in production or distribution of goods and in
providing services,
(ii) allows consumers to beneit from such new developments and improvements,
(iii) does not eliminate competition in the majority of the relevant market, and
(iv) does not restrict competition more than is required to achieve the purposes set forth under (a) and (b).
The Competition Authority may grant an individual exemption for a limited or unlimited term and/or make it subject to the fulilment of certain conditions. It has the full authority to revoke any exemption previously granted if circumstances change, conditions are not met, or it is understood that misleading information has been submitted.