Turkish Competition Law: 4 Things You Must Check Before Making an M&A Notification
Communique No. 2022/2 ("Amending Communique") on the Amendment of Communique No. 2010/4 concerning Mergers and Acquisitions Subject to the Approval of the Turkish Competition Board ("Communique No. 2010/4") has been published in the Official Gazette dated 4 March 2022. The Amending Communique will be effective as of 4 May 2022.
1. Turkish Merger Control Thresholds Have Been Increased
Within the scope of the amended merger control thresholds, businesses must notify the Competition Board of a merger or acquisition if:
2. Technology Undertakings Have Been Introduced and are Exempt From the TRY 250 Million Thresholds.
The Amending Communique introduces "technology undertakings" and determines an exception to the thresholds applied to these undertakings. Article 4/1 (e) of Communique No. 2010/4 defines technology undertakings as “undertakings that operate on digital platforms, software and gaming software, financial technologies, biotechnology, pharmacology, agricultural chemicals and health technology industries or their assets related to these industries". In accordance with the introduction of technology undertakings, it is also stated that the TRY 250 million Turkish turnover thresholds will not apply to acquisitions of technology undertakings that operate in the Turkish market, conduct research and development activities in Turkey or provide services to Turkish users.
3. The Calculation of Turnover
The Amending Communique also updates and aligns the rules regarding the calculation of turnover for financial institutions in accordance with the recent changes made to the financial regulations.
4. Method for Application Submissions
An important update concerns the method for application submissions, which now officially allows notifying parties to submit notification forms online via e-Devlet (Turkey’s national system for web-based services), rather than by physical delivery to the Turkish Competition Board's headquarters in Ankara.
5. Alignment with the SIEC Test
In accordance with the amendments made to the Law on the Protection of Competition No. 4054 in June 2020, the dominance test now aligns with the proper SIEC (significant impediment to effective competition) test. In order to reflect the same amendment in Communique No. 2010/4, the article has been changed from “Mergers and acquisitions which would result in a significant lessening of effective competition within the entirety or a portion of the country to create or strengthen a dominant position solely or jointly are prohibited”, to “Mergers and acquisitions which would result in a significant lessening of effective competition within the entirety or a portion of the country, particularly in the form of creating or strengthening a dominant position are prohibited".
6. New Format of Notification Form
Additionally, the Amendment Communique also revises the content of the Turkish Competition Board’s notification form and its annexes.
In a nutshell, the most notable amendment to Articles 7/1 (a), (b) of Communique No. 2010/4 is the increase to the merger control thresholds, these changes are assumed to be due to the Turkish Lira’s recent currency depreciation. Within the scope of the Amending Communique, the thresholds for notifiable merger control filings have been revised from TRY 100 million to TRY 750 million, TRY 30 million to TRY 250 million; TRY 30 million to 250 million; and TRY 500 million to TRY 3 billion.
On the other hand, by defining and exempting technology undertakings in the Amending Communique, we can surmise that the Turkish Competition Board aims to control and intervene in the potential growth of the fast-paced technology industry in the Turkish market.
Additionally, the Turkish Competition Board has digitized the mergers and acquisitions notification form. A second notable change to the notification form is the presentation of information in a different format and detailed sub-sections regarding transactions, involved parties, related markets and joint ventures.
It is highly advisable for relevant companies to prepare the necessary applications in order to fully comply with the obligations described in the Amending Communique as of the effective date, 4 May 2022.
 According to Article 2 §2 of the Merger Regulation (EC) No 139/2004 of January 20, 2004, "A concentration which would not significantly impede effective competition in the common market or in a substantial part of it, in particular as a result of the creation or strengthening of a dominant position, shall be declared compatible with the common market."