The Law on the Amendment of the Law on Protection of Competition (in Turkish, “Rekabetin Korunması Hakkında Kanunda Değişiklik Yapılmasına Dair Kanun”, hereinafter referred to as the “Amending Law’’) was published in the Official Gazette dated 24 June 2020 and became effective as of the said date.

We would like to bring forth to your attention some of the main changes implemented therein, which may be of interest to your field of activity.

The Amending Law brings some major and crucial changes to the Competition law No:4054 (in Turkish, “Rekabetin Korunması Hakkında Kanun”, hereinafter referred to as the “Competition Law”’); the most important changes implemented are:

Other significant changes can be summarized as follows:

A parallel regulation to European Union legislation was aimed to be adopted and as per Article 8 of the Amending Law, the below provision has been added to the Article 41 of the Competition Law:

‘’The Competition Authority may decide not to open a full-fledged investigation on the agreements, concerted practices between undertakings, and decisions of associations of undertakings that do not materially restrict competition in the market, except for open and hard-core infringements such as price fixing among competitors, region or customer allocation and restriction of supply. The procedures and principles regarding the implementation of this paragraph shall be determined by the communiqué issued by the Competition Authority’’

Accordingly, the Competition Authority may not conduct an investigation on agreements, concerted practices and decisions and acts of undertaking group by taking into account “market share” and “turnover”.  The Competition Authority shall enact Communiqué with regard to the application of the said Article.

Another significant change introduced by the Amending Law is regarding the Article 7 of the Competition Law that governs the control on mergers and acquisitions.

The Article 7 of the Competition Law, prior to the recent amendment, was as follows:

Article 7: Merger by one or more undertakings, or acquisition by any undertaking or person from another undertaking-except by way of inheritance-of its assets or all or a part of its partnership shares, or of means which confer thereon the power to hold a managerial right, with a view to creating a dominant position or strengthening its/ their dominant position, which would result in significant lessening of competition (in Turkish, “rekabetin önemli ölçüde azaltılması”) in a market for goods or services within the whole or a part of the country, is illegal and prohibited.

Following the amendment, the new provision is as follows:

Article 7: Merger by one or more undertakings, or acquisition by any undertaking or person from another undertaking, except by way of inheritance, of its assets or all or a part of its partnership shares, or of means which confer thereon the power to hold a managerial right, which result with a significant lessening of effective competition in a market for goods or services within the whole or a part of the country, particularly by creating a dominant position or strengthening an existing dominant position, is illegal and prohibited.

Accordingly, not only the mergers and acquisitions that result with the creation or strengthening of a dominant position, but also the mergers and acquisitions that may result with significant impediment of effective competition can be prohibited as well.

Whereas it was compulsory to apply to the Competition Authority for any agreement, concerted practice between undertakings and decisions of associations of undertakings to be exempted from the provisions of the Article 4 which prohibits agreements and concerted practices between undertakings, and decisions and practices of associations of undertakings which have as their object or effect or likely effect the prevention, distortion or restriction of competition directly or indirectly in a particular market for goods or services, now with the new regulation it is voluntary to apply to the Competition Authority.

To this effect, if all four cumulative conditions set forth in Article 5 below are satisfied, agreements, concerted practices between undertakings and decisions of associations of undertakings are exempted from the application of the provisions of article 4:

i. The agreement must promote new developments and improvements or economic or technical progress in the production and distribution of goods and provision of services

ii. Consumers must benefit from the positive effects

iii. The agreement must not eliminate competition in a substantial part of the market

iv. Competition must not be restricted more than necessary to achieve the objectives listed in (a) and (b)

Pursuant to the Article 15 of Competition Law, the Competition Authority is entitled to perform examinations at the premises of undertakings and associations of undertakings in cases it deems necessary. To this end, as per Article 15/1-a, it was entitled to examine the books, any paperwork and documents of undertakings and associations of undertakings, and take their copies, if needed.

As per Article 4 of the Amending Law, the Article 15/1-a has been amended and pursuant to new regulation; “the Authority may examine the books, any data and documents kept in the physical and electronic media and information systems, and take copies and physical samples of them”.

Another change concerns the Article 43. The title of the Article 43 of the Competition Law was changed as “Commencement of Investigation, Commitment and settlement” and the third paragraph of the same article which stated “The Decision of the Board to initiate an investigation is final’’ was deleted. As per Article 9 of the Amending Law, a commitment can be made in order for the competition problems to be eliminated that are occurred within the scope of the Articles 4 and 6 of the Competition Law during a preliminary research or investigation. In the event that the Competition Authority becomes convinced that the present competition problems can be solved through subject commitments, it may decide not to initiate investigation or to end the pending investigation by deciding the commitments to be binding in terms of relevant undertakings or associations of undertakings.

Yet, commitments regarding clear and hardcore infringements, such as price fixing among competitors, territory or customer allocation, or restriction of supply shall not be accepted. The procedure and principles for the implementation of this provision shall be regulated through a Communiqué.

The settlement method is another new institution introduced to the competition law.

After the commencement of the investigation, The Competition Authority may start the settlement procedure either ex-officio or at the request of either by one or more of the parties by taking into account the procedural interests that may arise from the fast finalization of the investigation procedure and due to the differences in the opinions on the existence and scope of the violation.

The Competition Authority can settle with the undertakings or associations of undertaking that acknowledge the existence and scope of the violation until the notification of the search report. Within that context, when an investigation is initiated, the Competition Authority grants peremptory term to the parties, for the submission of the settlement statement attesting the acknowledgement of the existence and scope of the violation.

The investigation shall be ended with a final decision comprising the determination of the violation and imposing an administrative fine. In case the procedure ends with the settlement, administrative fine and the provisions of the settlement shall not be suable before the courts.  The administrative fines to be imposed will be decreased by 25%. This discount will not revoke the implementation of the discount applied under Article 17 of the Law No. 5326 on Misdemeanors.

Our Law Firm remains at your disposal for any further clarifications or assistance you may need about the subject matter.