On June 24, 2020, Law numbered 7246 Amending the Law on The Protection of Competition numbered 4054 has been published in the Official Gazette and entered into force on the same day. In addition to the explanations in our reminder dated 24.6.2020, the full text of the changes is given below.
Paragraph 1 of Article 5 has been amended as:
“The Board, in case all the terms listed below exist, may decide to exempt agreements, concerted practices between undertakings, and decisions of associations of undertakings from the application of the provisions of article 4:
- a) Ensuring new developments and improvements, or economic or technical development in the production or distribution of goods and in the provision of services,
- b) Consumer’s having benefit from the above-mentioned,
- c) Not eliminating competition in a significant part of the relevant market,
- d) Not limiting competition more than what is compulsory for achieving the goals set out in sub-paragraphs (a) and (b).
The related undertakings or undertakings of associations may apply to the Board to determine it by the Board whether the agreement, concerted practices between undertakings, and decisions of associations of undertakings under Article 4 meet the exemption terms.”
► It is stated in the preamble of the Article that the amendment will enable the undertakings to exercise a self-assessment system as it is applied in the European Union. In the pre-amendment letter of the Article, it was the Board itself deciding as to whether the actions of the undertakings fall within the scope of the exemption. With the amendment, while the obligation to apply to the Board is eliminated, it is granted to the undertakings to decide whether they meet the exemption requirements. Further, the option is also available to apply to the Authority and request to assess it.
Paragraph 1 of Article 9 has been amended as:
“If the Board, upon informing, complaint or the request of the Ministry or on its initiative, establishes that the Articles 4, 6 and 7 of this Law are infringed, it notifies the undertaking or associations of undertakings concerned of the decision encompassing that behavior to be fulfilled or avoided to establish competition and structural remedies in the form of transferring certain commercial activities or partnership interests or assets of undertakings. Both behavioral and structural remedies should be proportionate to and necessary to end the infringement effectively. Structural remedies are applied only in cases where the behavioral measures introduced earlier have yielded no results.”
► With this amendment, a new remedy is added to those that may be introduced by the Board for the protection of competition, and it empowers the Board the opportunity to take structural remedies in its decisions regarding the undertakings, in the form of transferring of partnership interests or assets. Structural remedies that can be ordered may only be introduced if the undertakings do not comply with the remedies imposed by the Board for correcting their anti-competitive behavior, or if such remedies have failed.
The below Paragraph has been added to Article 41:
“The Board, based on criteria such as market share and turnover thresholds, may not launch an investigation on the agreements, concerted practices and/or decisions of association of undertakings that do not materially restrict competition in the market, excluding explicit and severe 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 Board.”
► By this paragraph added to the Article, it is eliminated the obligation to launch an investigation regarding the agreements, concerted practices, and decisions of association of undertakings that do not exceed the market share and turnover thresholds already determined by the Board, except preliminary investigation reports on explicit and severe infringements. The practices to be assessed by the Competition Authority within this scope will be determined by the communiqué issued by the Board.
The below paragraph has been added to Article 43 and its heading has been amended as “Commencement of Investigation, Commitment, and Settlement:
“In the course of a preliminary investigation or investigation in progress, a commitment may be proposed by the concerning undertaking or association of undertakings to eliminate the competition problems arising under Article 4 or 6. If the Board deems that the competition concerns can be resolved through submitting commitments, it may resolve not to open an investigation or to terminate the ongoing investigation by making them binding for the related undertakings or the associations of undertakings. No commitment is accepted for explicit and severe infringements such as price-fixing among competitors, territory, or customer allocation, or restriction of supply. The procedures and principles regarding the implementation of this paragraph shall be determined by the communiqué issued by the Board.
After the Board renders a decision according to the third paragraph, it can re-open an investigation in the following circumstances:
- there is a substantial change in any element that constitutes the decision;
- the related undertakings or the association of undertakings violate their commitments; or
- it is realized that the decision had been made based on incomplete, incorrect, or misleading information provided by the parties.
The Board, after launching an investigation, may initiate settlement procedure at the request of those concerned or ex-officio, while taking procedural benefits arising from the rapid completion of the investigation process and disputes regarding the existence or scope of the infringement. The Board may resolve settlement with undertakings or the associations of undertakings against whom an investigation is initiated and accepting the occurrence and scope of the infringement, until the official service of the investigation report.
Within this framework, the Board shall provide the parties investigated a certain time to submit a settlement letter in which they accept the existence and scope of the infringement. Notifications made after the given period shall not be taken into consideration. The investigation shall be terminated with a decision involving the detection of infringement and an administrative fine.
After concluding the settlement procedure, a reduction in administrative fines may be applied up to twenty-five percent. The reduction in administrative fines pursuant to this article does not prevent applying further reduction under the sixth paragraph of article 17 of the Law No. 5326.
If the process results in a settlement, neither administrative fines nor the matters included in the settlement letter may be the subject of litigation by the parties.
All other procedures and principles regarding settlement shall be determined by the regulation issued by the Board.”
► By the amendment of the Article, it has been introduced reconciliation and commitment procedures that were not previously included in our Competition Law, and it enables the undertakings who have acted violating the competition, but if this violation is not explicit or severe, such undertakings may determine and implement the steps to eliminate the infringement. It is set forth that there will be a 25 percent reduction in administrative fines that will be applied to undertakings that acknowledge that they have caused the violation and specify the steps they will take to resolve it and whose commitment letters are accepted by the Board. Within the scope of the submitted commitment, the undertakings those who settled do not have the right to appeal the letter of the settlement. Further, the amendment also states that if the undertaking does not comply with its commitments or the information provided within the scope of the commitment is deficient, incorrect, or misleading, the Board may initiate a new investigation again.
As a ground for the amendment, it is supported by the European Union harmonization process and the time spent in the investigation process of public institutions to be used more effectively and focusing on other major concerns preventing competition.
Att. at Law Barışcan Bilgiç
Disclaimer: This information and our comments above are for guidance purposes only and should not be regarded as a substitute for taking legal advice. Vona Law Office makes every effort to ensure accurate and up to date content, however, it may not reflect the most current legal developments based on the amendments on the applicable laws and legislations after the publishment of this article. Therefore, nothing in this article should be considered as legal advice and you should consult with lawyers before making any decision or taking any action based on the information included in this article.