1 What is the relevant legislation and who enforces it?
The Law on the Protection of Competition (LPC, Law 4054) was enacted in the Turkish parliament on December 7 1994. Its purpose was to prevent
agreements, decisions and practices that restrict, prevent or distort competition within the Turkish market for goods and
services, and the abuse of dominant position. The law was published in the Official Gazette and became effective on December 13 of that
year. The Competition Board was set up on February 27 1997 to apply the law and act as the decision-making body of the Competition
Authority. Eight months later, the Authority announced the organisation of the new body by a decree published on November 5 1997. Since
then, the Authority has acted quickly to put the new law into practice.
The Competition Authority is the sole body responsible for applying the
LPC. Article 20 contains a clause stipulating that, while carrying out its
duties, the Authority shall be independent and shall not receive any orders or directives from any organ,
authority, entity or person.
2 What is the substantive law on cartels in the jurisdiction?
Article 4 of the LPC is designed to prevent competition being distorted by decisions within associations of
enterprises, or agreements about concerted practices between enterprises in certain markets for goods and
services. The article runs parallel to Article 81(1) of the EC Treaty.
3 Are there any industry-specific offences/defences? No.
4 Does the law apply to individuals or corporations, or both?
The law applies only to corporations - individuals are not covered.
5 Does the regime extend to conduct that takes place outside the
jurisdiction?
The LPC applies to anti-competitive behaviour that has an effect on the Turkish market.
Thus, it also applies to undertakings located abroad, if their anti-competitive agreements or practices affect the Turkish market.
6 Are there any current proposals for change to the regime?
Turkish competition regime is inspired by EU legislation. It has been passed and accepted as a piece of modern
legislation, and there are currently no plans to change it.
Investigation
7 What are the typical steps in an investigation?
The Competition Board may, upon an application or upon its own initiative, instigate a direct
investigation. Equally, the Board may decide on a initial investigation to determine whether a preliminary proceeding for the application is
necessary. In cases where a preliminary investigation is carried out, the director appoints one or more experts from the Board's staff to act as reporters and to carry out the preliminary
investigation. The reporters then have 30 days to notify the Board in writing of all relevant information and
evidence, together with their views of the matter.
The Board will meet within 10 days of this report being submitted to decide whether it is necessary to initiate a preliminary
investigation. If, on the basis of the information in its possession, the Board consider that there are serious and sufficient
grounds, it will inform the applicants in writing of its decision and of the commencement of the
proceedings.
Anyone who claims to have a direct or indirect interest may bring an action against the decision of the Board concerning an express or implied dismissal of the
application.
The Board, having decided to initiate the investigation, appoints Board
members, together with a reporter or reporters, and authorises them to carry out the
investigation, which must be completed within six months. The Board may extend this period only once by a further six
months, where it is deemed necessary.
The Board must inform the parties concerned of the commencement of the investigation within 15 days of its
decision. The parties then have 30 days to submit arguments in writing relevant to their
defence. For this submission period to begin to run, the Board must inform them of the legal grounds and the nature of the alleged
infringement, together with its request for the arguments of the parties. The decision of the Board on the initiation of investigation is final.
The parties, having been informed that an investigation has started against
them, can request a copy of all documents issued by the Authority and all types of evidence
obtained, from the date of initiation of the investigation up to the date of the request for a
hearing. It is important to note that the Board cannot base its decision on any issue about which the parties are not informed or not given the right of
defence.
The report produced at the end of the investigation stage is issued to all the Board members and to the parties
concerned. Those who are deemed to have infringed the LPC are notified that they must submit their second defence in writing to the Board within 30
days. The experts charged with carrying out the investigation must then submit their additional views on the arguments in writing within 15
days; this is also notified to all the Board members and to the parties
concerned. The parties can respond to these views within 30 days. This time limit may be extended
once, in cases where the parties have justifiable reasons and then, only by another 30
days. A reply from the parties which is not made within this specified time period shall not be taken into
consideration.
A hearing takes place if the parties concerned have requested it in their defence or in their reply
petitions. However, the Board can, on its own initiative, decide that a hearing should take
place. In either case, the hearing occurs between 30 and 60 days following the end of the
investigation. Invitations to the hearing must be sent to all the relevant parties at least 30 days before the date of the
hearing.
Hearings are held in public, though the Board may, on grounds of protecting public morality or trade
secrets, decide to hold it in closed session. Nonetheless, experience shows that the parties must submit strong arguments if they are to persuade the Board to hold a closed
session.
Hearings are presided over by the chairman or, in his absence, by the deputy
chairman. A hearing can only be held with the attendance of the chairman or the deputy chairman and at least seven members of the Board. Hearings are to be concluded within no more than five consecutive sessions
(several meetings held on the same day will be considered to be one session). The final decision of the Board is to be made on the same date as the last
session. If that is not possible, it must be issued, together with the Board's
reasoning, within 15 days of the hearing.
In cases where a hearing is neither requested by the parties nor imposed by the Board, the final decision is given within 30 days of the end of the investigation
stage.
8 What investigative powers do the authorities have?
During the course of the investigation, the Investigation Committee may request information and carry out on the spot
investigations. Within this period, the Committee may also request the parties and other related authorities to submit all necessary documents and
information. The Board may also request all necessary information from all public authorities and
entities, enterprises and associations of enterprises. During the investigation, any person or persons who are alleged to have infringed the law can, at any time, submit to the Board any information and evidence that may affect the
decision.
During any on the spot investigations, the Board is empowered to examine accounting and other
books, all types of documents and other records of the enterprises or of the associations of
enterprises, and where necessary, to take copies of those documents. It may also request written or oral explanations of certain issues and carry out investigations on the premises concerning the assets of the
enterprises. Investigations must be carried out by experts working under the authority of the Board. These experts must carry authorisation documents displaying the subject matter and the purpose of the
investigation, and the fact that administrative penalty payments shall be imposed if incorrect information is
provided. Oral evidence can also be used, but testimony may have to be
compelled, as the involved parties have the right to remain silent.
International cooperation
9 Is there inter-agency cooperation? If so, what is the legal basis for and extent of
cooperation?
The Competition Board and the Authority cooperate with other antitrust authorities both on a
case-by-case basis (when necessary for large-scale mergers) and on an academic
basis, for example over educational issues. However, it is to be noted that cooperation between the Turkish Authority and the European Union's Directorate General of Competition is based on bilateral agreements between Turkey and the
EU. The application of competition law in Turkey results from obligations regarding the Decision of the Association Council 1/95 Establishing Customs Union between the European Union and
Turkey. Thus the Turkish republic has enacted the EPC and accepted the effectiveness of case law constituted by EU institutions pursuant to Article 39(2)(a) of the Decision of the Association Council 1/95. The case law of the European Court of Justice has thus also become the case law of Turkish national
legislation. For competition matters concerning a Turkish undertaking and an
EU-based undertaking, both the EU Competition Directorate and the Turkish Competition Authority are considered to be the competent
authorities.
The principles of this cooperative system are laid down in Article 43 of the Decision of the Association Council 1/95. Under the
LPC, the relevant ministry related to the Turkish Competition Authority is the Ministry of Trade and
Industry.
10 How does the interplay between jurisdictions affect the investigation, prosecution and sanction of cartel activity in the
jurisdiction?
Normally the interplay between jurisdictions will not have any effect on the enforcement of Turkish competition
law.
11 How is a cartel matter adjudicated?
All cartel matters are adjudicated before the Competition Authority and the Competition Board.
12 What is the appeal process, if any?
Final decisions of the Board, decisions on interim measures and on fines and periodic penalty payments can be subjected to a judicial review before the Council of State within the specified time period following the notification of the decision to the parties. The decision becomes final if no action is taken within the time limit.
Fines cannot be collected before the decision of the Board becomes final. The enforcement of Board decisions on fines and periodic penalty payments is subject to the provisions of Law 6183 on the Procedure for Collecting Public
Credits.
13 On which party is the onus of proof?
The onus of proof is not on the Competition Board. In cases where those who have suffered damages submit evidence to the judicial authorities concerning the existence of an
agreement, the burden proving that the enterprises are not engaged in a concerted practice shall be shifted to the
defendants. The same is true of cases where parties alleging damage submit evidence that competition in the market is
distorted, in particular on market-sharing, stabilisation of the market price for a long
period, and price increases at close intervals by enterprises in the market.
Sanctions
14 What criminal sanctions are there for cartel activity?
There are no criminal sanctions for cartel activity; imprisonment is not established as a
punishment. AD the fines regulated by the LPC are administrative.
15 What civil or administrative sanctions are there for cartel activity?
The Board may impose fines on natural persons or legal entities which have the status of an
enterprise. It may also impose fines on associations of enterprises and/or the members of these associations in cases of cartel
activity.
The enterprises and associations of enterprises against which the Board finds an Article 4 infringement may be fined up to 10 per cent of their gross income for the previous financial
year. Where a fine is imposed on the company, additional fines of up to 10 per cent of the original fine may also be imposed on the individual members of the
management. The Board may also impose periodic penalty payments on a daily
basis.
16 Are private damage claims or class actions possible?
Anyone who, by a decision, an agreement or a practice contrary to the LPC
prevents, distorts or limits competition or abuses a dominant position in the market for goods and services must compensate persons who are damaged as a
result. If damages occur as a result of the practices of more than one
person, they are jointly and severally liable.
Those who have suffered damages as a result of the limitation, distortion or prevention of competition can request as damages the difference between the amount they paid and the amount they would have paid if competition had not been limited. Competitor enterprises that are affected by the distortion of competition may request all their damages from the enterprise or enterprises that distorted
competition. In calculating damages, all profits that the damaged enterprises might have gained shall be taken into
account, thereby also taking into account the balance sheets of previous
years.
In cases where damages arise from an agreement, or a decision, or from the negligence of the
parties, the judge may, upon the request of the damaged parties, decide on compensation three times that of the actual
damages, or three times the profit gained or likely to be gained by the parties who caused the
damage.
17 What recent fines or other penalties are noteworthy?
At present, the maximum fine levied by the Board stands at US$ 1,7 million for parallel conduct in the Aegean Region cement
case, US$1.6 million for refusal to supply in the Istanbul wholesale
case, and US$500,000 in a TV advertisement marketing case.
Sentencing
18 Do sentencing guidelines exist?
No sentencing guidelines exist. Since there is a large difference between the minimum and the maximum penalty that the Board might
order, it is very difficult to come up with a set of sentencing guidelines.
Nevertheless, although they are not binding, rules;
general principles applied by the Commission might be followed;
by the Board.
19 Are they binding on the adjudicator? No (see question 17).
Leniency/immunity programmes
20 Is there a leniency/immunity programme?
There is no formal leniency or immunity programme in Turkey. However, as the application of competition law in Turkey is the result of obligations regarding Article 39(2) (a) of the Decision of the Association Council 1/95, the Turkish Competition Authority can follow the applications of the European
Commission. Thus, the system applied is informally inspired by the EC Leniency
Notice.
21 What are the basic elements of a leniency/immunity programme, if one
exists?
Undertakings can benefit from a reduction in their fine provided they inform the Competition Authority about any secret
cartel, give it all relevant information, documents and evidence, and maintain continuous and complete cooperation throughout the
investigation. The percentage or rate of the reduction depends on the Board's
evaluation.
22 What is the importance of being 'first in' to cooperate?
The first enterprise to give decisive evidence of a cartel's existence will benefit from a significant
reduction. The percentage or rate of the reduction depends on the Board's
evaluation.
23 What is the importance of going second? Is there an 'immunity plus' or
'amnesty plus'option?
As explained above, there are no formal rules for getting the fine down in
Turkey. The degree of cooperation is evaluated by Board members, taking into account the basic principles applied by the
Commission.
24 What is the best time to approach the authorities when seeking leniency/immunity?
The timing is important since it affects the amount of the reduction. An undertaking will benefit from a substantial reduction if it informs the Competition Authority about a secret cartel as early as
possible, even before the Authority has undertaken an investigation.
25 What confidentiality is afforded to (a) the leniency/immunity applicant and (b) any other cooperating
party?
A high degree of confidentiality is afforded to the leniency/immunity applicant and to any other cooperating
party.
26 What is needed to be a successful leniency/immunity applicant (or other cooperating
party)?
No special evidentiary standards are required.
27 What is the effect of leniency/immunity granted to a corporate defendant on employees of the
defendant?
Where a fine is imposed on an enterprise or association, further fines of up to 10 per cent of that fine may be imposed on the individuals in
management.
28 What guarantee of leniency/immunity exists if a party cooperates?
Where leniency is granted in respect of fines, enterprises cannot be protected from the civil law consequences of its participation in an illegal
agreement. If the information provided by the enterprise leads the Authority to take a decision pursuant to Article 4 of the
LPC, the enterprise benefiting from leniency in respect of the fine will be named in that decision as having infringed the
law.
29 What are the practical steps in dealing with the enforcement agency?
Where an enterprise wishes to take advantage of favourable treatment, it should contact the Competition
Authority. Only persons empowered to represent the enterprise for that purpose may take such a step. The leniency programme does not therefore cover requests from individual employees of an
enterprise. The Authority will determine whether the conditions have been fulfilled only on the adoption of its
decision. There are no other specific regulations on dealing with the
Authority.
Defending a case
30 Can counsel represent employees under investigation as well as the
corporation?
Yes.
31 Can counsel represent multiple corporate defendants?
It is always possible for counsel to represent multiple defendants.
32 Can a corporation pay the legal costs of and/or penalties imposed on its
employees?
A corporation may pay any legal costs imposed on its employees if it so
wishes.
Getting the fine down
33 What is the optimal way in which to get the fine down?
There is no way of negotiating with the authority to agree a particular
sentence. Since there are no formal rules, the best way to obtain lenient treatment is to use counsel who will cooperate efficiently with the
Authority.
Update and trends
Despite the recently introduced body of competition regulation, the Authority is still pursuing many
cases. The most important example is the Aegean Region cement case, where the Board ruled for an aggregate fine of US$1.7 million
-the highest fine ever imposed by the Board. The Board has now initiated another cartel case concerning
anti-competitive conduct by cement producers elsewhere in Turkey.
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