The Turkish Competition Authority Publishes Communique Introducing A New Commitment Mechanism
Ali Ilicak,Yagmur Kaya
The latest amendment to the Law on Protection of Competition No. 4054 (“Law No. 4054”) has introduced a brand-new commitment mechanism designed to eliminate competition law violations arising from the abuse of dominance and restrictive agreements without the need to complete ongoing pre-investigation and investigation procedures. Accordingly, during a pre-investigation or investigation, parties can offer commitments voluntarily to the Turkish Competition Board (“the Board”) in regard to particular violations. If the Board finds these commitments sufficient to eliminate its competition concerns, it can choose not to launch an investigation, or to end an ongoing investigation before its completion without issuing an administrative fine. The mechanism aims to save time, reduce costs and prevent anti-competitive damages from increasing.
In order to regulate the commitment mechanism in detail, the Turkish Competition Authority issued a communique named the “Communique on commitments offered during pre-investigation and investigation on restrictive agreements, concerted practices, decisions, and abuse of dominance” ("the Communique"), which was published in the Official Gazette numbered 31425 on 16 March 2021 (Available in Turkish only).
What Does the Communique Regulate?
The Communique stipulates the complete commitment mechanism procedure, providing rules on the submission, evaluation, nature, termination, tracking, and fulfillment of commitments in detail. More importantly, the Communique sets the scope of violations for which undertakings can apply to the commitment mechanism.
The Scope of the Commitment Mechanism
Law No. 4054 stipulates a general rule that the commitment mechanism does not apply in cases of clear and severe competition law violations. However, it does not define the violations but does provides examples such as price-fixing, allocation of customers, or territory. That said, the Communique provides a definition for “evident and severe violations” and determines the scope of violations that are subject to the commitment mechanisms definitively.
According to the Communique, evident and severe violations are as follows:
a. Horizontal agreements, concerted practices, and decisions of undertakings’ associations in relation to (i) price-fixing, (ii) allocation of customers, output, territory or trade channels, (iii) output limitations or quotas, (iv) collusive tendering.
b. The exchange of competitively sensitive information such as information on future pricing, output, or sales quantities among competitors.
c. Resale price maintenance agreements, concerted practices, and decisions of undertakings’ associations that impose fixed or minimum prices on distributors.
Undertakings found to have engaged in any such violations cannot benefit from the commitment mechanism.
The Procedure for the Commitment Mechanism
Submission of commitment requests: The commitment procedure begins with a written request from undertakings. To apply to the commitment mechanism during the investigation stage, undertakings must submit their requests within three months of receiving an investigation notice.
Please contact Ali Ilıcak for more information.