What is the Turkish Competition Authority’s Approach to Competition Compliance Programs?
A Comparative Global Overview
Altug Ozgun,Ali Ilicak,Burcu Seven
Competition and antitrust authorities in different jurisdictions share a common desire for companies to comply with competition rules, and have similar expectations to ensure compliance, however they all follow different paths to encourage undertakings. The Turkish Competition Authority (“TCA”) introduced the Guideline on Competition Compliance Programs (“Guideline”) in 2013, which sets out the fundamental requirements of competition compliance programs (“CCPs”) that enable undertakings’ to comply with the Law on Protection of Competition No. 4054 (“Competition Law”) and its secondary legislation. This article will examine the TCA’s standpoint for CCPs, as well as those of the European Commission (“EC”) and the United States Department of Justice Antitrust Division. Since the main requirements of CCPs are approximately similar, their fundamental elements will also be represented in a comparative chart.
According to the Guideline, a CCP is an application or a set of in-house regulations and rules that enable undertakings and/or associations of undertakings to audit themselves in terms of competition law. A CCP’s purpose is to ensure that managers and employees of undertakings are well-informed about competition rules, and to detect behaviour or practices contrary to competition legislation in a timely manner that enables the prevention of competition law violations.
The scope of a compliance programme can vary for each undertaking; the TCA strongly emphasizes the requirement for a tailor-made CCP which is designed in accordance with the risks and needs of each undertaking’s size, operations, sector, and market. Does the undertaking hold a dominant position in the market? Are there entry barriers? What is the possibility of a cartel forming? The TCA strongly underlines how these factors should change the structure and implementation of CCPs. Nevertheless, the TCA still addresses minimum requirements sought in each CCP and groups the basic elements under four headings:
1.Preparing an internal guide that sets out the principles and procedures of competition regulations and the CCP.
2. Training and communication with company employees in an adequate and appropriate manner.
3. Regular evaluation and auditing of the compliance programme.
4. Applying consistent discipline and incentives at all levels of an organization with a top-down compliance culture.
A CCP guide should primarily emphasize the importance of competition law compliance and its integrity with company policy. It should contain general information about the procedures and principles of competition legislation, wrongful conduct, agreements and decisions, the consequences for companies that violate the legislation, and the powers of the TCA and the Competition Board. The TCA strongly emphasizes the importance of tone at the top; senior management should clearly express its commitment to implementing a CCP with a zero-tolerance policy. It also strongly recommends designating a counsel or a senior manager to be responsible for the implementation of a CCP, and the auditing, control, timely reporting, and support of employees for competition compliance, especially in large-scale companies and holdings.
It is worth specifying that the TCA expects undertakings to approach competition compliance as an “ethical and legal” matter and that a CCP should be more than just complying with the law, it should be an integral part of company policy.
When it comes to the question of whether the implementation of a CCP will be considered as a mitigating factor, despite the TCA’s behaviour to the contrary so far, with so few Board decisions to consider, it is hard to reach a final verdict. Article 7 of the “Regulation on Fines to Apply in Cases of Agreements, Concerted Practices and Decisions Limiting Competition, and Abuse of Dominant Position” states the issues to be taken into consideration by the TCA while setting administrative fines to be imposed, however, it does not address any compliance program related factors.
A decision given in 2013 represents the TCA’s appreciation of the efforts of undertakings to comply with competition law, however, it states that those efforts cannot be considered as a mitigating factor to determine lower basic fines. While this decision does not include any CCP-related evaluation, another decision given in 2013 is rather closer to including a remark on the implementation of CCPs. The decision emphasizes the “sine qua non” character of CCPs for undertakings to comply with competition regulations, and states that the implementation of these programs is the TCA’s policy. However, the mere “existence” of a CCP is not accepted as an indication of an undertaking’s non-violation of competition law. The decision is also remarkable because it refers to the contravening conduct of senior managers employed in the undertaking’s various branches, deeming their conduct to have been carried out with the whole undertaking’s consent. A great lesson to be learnt here is how senior managers’ actions can affect the overall CCP.
EU competition rules are directly applied by the EC, national authorities, and courts; therefore, they touch everyone who does business in the EU.
Just as with the TCA, the EC requires undertakings to ensure compliance with competition rules. Therefore, it expects them to raise awareness and provide an adequate level of knowledge about competition regulations, breaches, and their consequences, at all levels of a company to prevent violations. With this understanding, the EC supports any effort serving this purpose, without obliging undertakings to name it as a CCP. However, the EC still agrees that a tailor-made and effective CCP is the best practice for competition compliance, and published its guideline “Compliance Matters: What companies can do better to respect the EU Competition rules?” (“EU Guideline”).
What the EC seeks in an effective CCP is pretty much the same as the TCA (see the comparative CCP chart below). However, the EC has a result-focused approach. Similar to the TCA’s practice so far, the EC neither finds the mere existence of a CCP as an attenuating circumstance, nor does it take it into consideration while deciding the level of fines to be imposed. The EC says, “it does not reward what is already obligatory”, or any CCP that fails to prevent violations.
The U.S. Department of Justice Antitrust Division (“Antitrust Division”) clearly takes CCPs into account in its decisions and announced its guidance document “Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations” (“U.S. Guideline”) which defines the factors for evaluating the effectiveness of CCPs.
The Antitrust Division strongly considers whether a CCP is tailor-made; applied earnestly and in good faith, and whether it works effectively. The design of a CCP, the type of risk assessment, monitoring, and compliance audits should be conducted in a manner so that each undertaking can create its own benchmark of “best practices”, since there is not a commonly accepted one. When compared with other guidelines, the U.S. Guideline has obviously been prepared in a more comprehensive and detailed manner, and truly seeks the ethical implementation of CCPs and promotion of an organizational culture that encourages ethical conduct and a commitment to compliance with competition laws. When it comes to the “fundamentals of a CCP”, again the answers are pretty much similar to the TCA’s (see CCP comparative table is below).
The U.S. Guideline concretely differs from other guidelines because it directly instructs prosecutors to evaluate CCPs and offers guidance on how to conduct an evaluation effectively and equitably. While CCPs are not directly evaluated in the scope of an investigation in Turkey or at EU level, in the U.S. evaluation is required and even a part of an investigation and the decision-making process, not only to determine the fine to be imposed, but also to select the right monitor or remedy for the company.
In summary, the Antitrust Division evaluates CCPs on a case-by-case basis and gives credit for effective and ethically implemented CCPs. The effectiveness of CCPs may be relevant to an undertaking’s culpability score, helping to determine probation and any fine to be imposed. While this “backward looking” evaluation may be an expected approach from the TCA and in EU-level decisions in the future, the Antitrust Division also implements a totally different “forward looking” practice, which evaluates the remediations made in CCPs as mitigating factors. If an undertaking is already involved in an investigation, remedial efforts such as proof of its commitment to implementing a CCP and making visible changes in the company’s ethical culture may be recognized and help to reduce any fine imposed.
Table 1 represents the basic characteristics of CCPs. It's worth mentioning that while implementing a CCP is not obliged by law, competition authorities share a general acceptance that implementing an effective CCP is the best practice. Please also be aware that national competition authorities in the European Union may have stricter requirements for implementing and evaluating CCPs.
Table 1: Comparison of CCPs across different jurisdictions
CCPs are encouraged by competition authorities all over the world. While the main requirements of an effective CCP are similar to each other, their role in the evaluation and decision-making process in an investigation may vary. The TCA’s practices so far are not yet focused on a CCP based evaluation. It is difficult to predict for now whether the TCA’s approach will change to consider an effective compliance program as a mitigating factor. Nevertheless, the recipe of an effective CCP is almost clear for the management of an undertaking and a genuine CCP itself is more effective than any creative defence argument when it comes to avoiding antitrust fines.
 “Regulation on Fines to Apply in Cases of Agreements, Concerted Practices and Decisions Limiting Competition, and Abuse of Dominant Position” published in the Official Gazette dated 15/01/2009 numbered 27142.
 Linde Gaz Decision No: 13-49/710-297 of 29.08.2013 Case No: 2012-1-80
 Frito Lay Decision No: 13-49/711-300 of 29.08.2013
 Compliance Matters: What companies can do better to respect EU Competition rules? European Union, 2012
 Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations, U.S. Department of Justice Antitrust Division, July 11,2019
 Please see: Statutory Fine Reduction for Recurrence Prevention Efforts, Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations, U.S. Department of Justice Antitrust Division, July 11,2019