22 June 2021
Communiqué on Commitments to be Submitted in Preliminary Investigations and Investigations on Anti-Competitive Agreements, Concerted Practices and Decisions, and Abuse of Dominant Position numbered 2021/2 (“Communiqué No. 2021/2”) and Communiqué on Agreements, Concerted Practices and Decisions and Acts and Conducts of Association of Undertakings That Do No Considerably Restrict Competition numbered 2021/3 (“Communiqué No. 2021/3”) have been published in the Official Gazette dated 16 March 2021 and numbered 31425.
As is known, certain amendments have been made to the Law on the Protection of Competition (“Law”) with the Law dated 16.06.2020 and numbered 7246 in order to ensure compliance with the European Union legislation which has been taken as reference in the preparation of the Law.
Within this scope, with the amendment to Article 43 of the Law, possibility for the undertakings and association of undertakings to make commitments during preliminary investigations has been introduced. Therefore, if the Competition Board (“Board”) is of the opinion that competition problems can be resolved by virtue of the commitments made, the Board may decide not to initiate an investigation or to terminate the investigation by making these commitments binding upon the undertakings or association of undertakings.
Likewise, with the amendment to Article 41 of the Law, it has been accepted that the Board, based on criteria such as market share and turnover, may not investigate agreements, concerted practices and decisions and acts and conducts of associations of undertakings that do not considerably restrict competition in the market, provided that they do not constitute gross violations such as price fixing between competitors, allocation of territory or customers, and restriction of supply.
It was envisaged that the implementation principles regarding these amendments would be determined by the secondary legislation to be issued by the Competition Authority (“Authority”). In this regard, with the Communiqué No. 2021/2, published on March 16, 2021, detailed regulations have been introduced regarding the commitments that can be submitted by undertakings. The Authority has also regulated the procedures and principles regarding agreements, concerted practices and decisions and acts and conducts of associations of undertakings, which can be considered as “de minimis” and may not be subject to an investigation due to the market share it affects, with the Communiqué No. 2021/3 published in the Official Gazette of the same date.
You may find below brief information on both Communiqués.
A. Regulations of the Communiqué No. 2021/2
1. Clear and hardcore violations are excluded from the commitment procedure.
As per the Communiqué No. 2021/2 (“Communiqué”), the possibility of commitment may be applied in order to eliminate the emerging competition problems arising within the scope of Article 4 of the Law on agreements, concerted practices and decisions restricting competition, and Article 6 on abuse of dominant position, excluding clear and hardcore violations.
2. The possibility of starting the commitment procedure is limited to a period of three months and the applications must be submitted in writing.
According to the Communiqué, parties who want an investigation carried out against them to be terminated based on a commitment, may request to make a commitment during the preliminary investigation or investigation process. However, requests to submit such commitments during the investigation process must be submitted to the Authority in writing within three months after the serving of the investigation notification. After this period has elapsed, requests to make commitments to the Authority will not be taken into account.
3. These commitments of undertakings or associations of undertakings will be evaluated by the Board and the procedure foreseen in the Communiqué will be applied after the Board's decision regarding the initiation of commitment negotiations.
The Board may decide to initiate commitment negotiations or to reject the application for commitment and to terminate the commitment procedure, by evaluating the flagrant and gross violation nature of the agreement, decision and action within the scope of the review it will make, as well as any other issues it may deem necessary.
3. In the event that the submission of a commitment is agreed upon, the parties will send the text of the commitment and one copy of the commitment and its summary free of trade secrets and confidential information to the Institution within the period to be granted.
The time to be granted for the submission of the commitment will be determined by the Authority during the commitment negotiations, depending on the stage of inquiry and the scope of the commitment.
4. The commitment text must clearly include the commitment made, and no alternative commitments.
In addition to the obligation that the commitment text clearly includes the commitment made and no alternative commitments, the text of the commitment must also include other elements specified in the Communiqué.
5. The Board will evaluate the commitment submitted in terms of whether it resolves the competition problems by taking into account the elements it should contain.
As a result of its evaluation, if the Board approves the commitment, it may decide not to open an investigation or to terminate the investigation, by making the commitment binding for the related party, or to seek the opinions of third parties about the commitment.
If the Board does not approve the commitment as a result of its evaluation or after the opinion received from third parties, it will decide that the parties can make changes in the commitment within the framework of the Board's evaluations and within the period to be determined just for once, or to terminate the commitment procedure.
6. In case the parties want to change the commitment, revisions can be made in the commitment text with the approval of the Board.
If the Board approves the amended commitment text, the revised commitment will become binding on the related party, and it will be decided not to open an investigation or to terminate the investigation that has been opened, or to seek the opinions of third parties. If the Board does not find the revised commitment text appropriate, it will decide to terminate the commitment procedure.
7. Where the commitment is made binding, the parties' compliance with the commitment will be monitored and if the commitments are fully fulfilled, the Board will take a decision in this regard.
Monitoring the compliance of the parties with the commitment may be carried out by means of regular reporting by the parties, appointment of third parties for audit purposes, or cooperation with professional associations or relevant public institutions and organizations. In addition, the Board will always be able to conduct an investigation on its own motion regarding the monitoring of the commitment.
8. Application Period of the Communiqué
The Communiqué will also be applied to ongoing investigations as of the date of its entry into force, 16 March 2021. As of this date, in investigations where three months has elapsed from the decision to open an investigation, the condition that the request to make a commitment is submitted to the Authority within three months as of the notification of the investigation (see II.A.2) will not be required.
1. Clear and hardcore violations are excluded from the scope of agreements, concerted practices and acts and conducts of association of undertakings that may not be subject to investigations.
As per the Communiqué No. 2021/3 (“Communiqué”), in agreements concluded between competitor undertakings, excluding clear and hardcore violations, if the total market share of the parties does not exceed 10% (ten percent) in any of the relevant markets affected by the agreement; and in agreements concluded between non-competitor undertakings, if the market share of each of the parties does not exceed 15% (fifteen percent) in any of the relevant markets affected by the agreement, the relevant agreements do not significantly restrict competition in the market.
It is accepted that the relevant decisions will not significantly restrict competition in the market if the total market share of the members of the association of undertakings does not exceed 10% (ten percent) in any of the relevant markets affected by the decision, excluding clear and hardcore violations.
In the event that parallel networks created by vertical restrictions of similar nature cover more than 50% (fifty percent) of the relevant market, these thresholds will be applied as 5% (five percent) in terms of agreements and decisions between both competitor and non-competitor undertakings.
Likewise, according to the Communiqué, the fact that the market shares of the contracting parties or the members of the associations of undertakings in the relevant markets affected by the agreement or decision exceed the specified thresholds will not directly mean that the agreement or decision in question restricts or significantly restricts competition in the market.
2. The Board has been given a discretionary power over whether agreements and decisions that do not significantly restrict competition should be subject to investigation.
According to the Communiqué, agreements and decisions that do not significantly restrict competition in the market may not be subject to investigation by the Board. Also if it is understood later in the investigation process that the market shares of the undertakings and associations of undertakings under investigation do not exceed the thresholds, the Board may terminate the investigation.
3. Market share will be calculated on the basis of market value of sale or, where appropriate, purchase value.
Although it is a rule that the market share is calculated on the basis of the value of sales in the market and, if appropriate, the purchase value, in the absence of data pertaining to values of sale or purchase, estimations based on other reliable market data, including the quantity, can be used to calculate market shares of the contracting parties and the members of the associations of undertakings concerned in the markets.
According to the Communiqué, market shares calculated using the data of the previous year will be taken into account for each calendar year in the agreement or decision period in the application of the thresholds mentioned above.