Turkey: Definition of “Cartel” and Recent Cartel Cases

Last Updated: 10 February 2015
Practice Guide by ELIG, Attorneys-at-Law

Definition of Cartel

Cartel is the common concept which refers to anti-competitive agreements and/or concerted practices among competitors including (i) price fixing, (ii) market allocation, (iii) collective refusal to supply/deal (group boycotts), (iv) imposing quotas or (v) collusive bidding in tenders. Such agreements and concerted practices have consistently been deemed to be per se illegal. Cartels are accepted as the most severe competition restriction. They are the result of competitors striving to increase their profits by controlling different market related variables including, especially, price and output.

Article 4 of The Law on the Protection of Competition No. 4054 (the “Competition Law”) prohibits any form of agreements which has the “potential” to prevent, restrict or distort competition. Lack of effect does not preclude the application of the cartel prohibition. Article 4 does not refer to “appreciable effect” or “substantial part of a market” and thereby excludes any de minimis exception yet. Generally speaking, the rules and principles applicable under the EU competition law on cartel definition would also apply in Turkey.

The Turkish Competition Authority (the “TCA”) treats cartels differently than other practices restricting competition and punishes them in the most severe manner, due to the severe damage cartels do to economy. The TCA mostly imposes administrative monetary fines on cartelists. Cartel activity may also result in administrative monetary fines on employees/executives with decisive roles in the formation of cartels. Bid rigging cartels may also be subject to criminal sanctions. Last but not least, loaded punitive damages are available for the injured parties under private law.

One of the most effective methods competition authorities, including the TCA, utilize in their fights against cartels is the “leniency programs”. The leniency program facilitates the TCA’s work on detecting cartels, which by nature operate in secret. The program provides cartelists the opportunity to be immune from competition law sanctions if they disclose the cartel to the TCA as the first comer and meet the additional conditions listed in the relevant leniency regulation. For further detail, please see the sections (i) Leniency Program, (ii) Conditions for Full immunity and Reduction of Fines and (iii) Deadlines for Application.

Recent Cartel Cases

Please see the following Turkish Competition Board (the “Board”) decisions for further insight into the Board’s handling of cartel cases.

Yeast Cartel

The Board launched an investigation against four fresh yeast producers to determine whether they violated Article 4 of the Competition Law through colluding to set prices for fresh bread yeast. At the end of the investigation, the Board imposed a total fine of approximately TRY 14 million (EUR 5 Million) on three undertakings. Mauri Maya was granted full immunity upon its leniency application submitted, and following it dawn raids were conducted at the premises of the undertakings.

This decision is a landmark decision as the Board did not have any precedents of such case where the Board granted full immunity to the applications made following the initiation of the preliminary investigation and the dawn raids conducted. For the first time, the Board put the Leniency Guidelines into practice through granting full immunity to a leniency applicant, Mauri Maya, who submitted its application after the preliminary investigation was initiated, and following it dawn raids were conducted, as considering the added value and sufficient content of Mauri Maya’s leniency application.

Gaz Cartel case

In this case, Berk Gaz was the first applicant to apply for leniency. Being convinced that Berk Gaz provided sufficient documents and information, while also fulfilling the other conditions set out in the Leniency Regulation, the Board granted full immunity to Berk Gaz in spite of the fact that the new evidence uncovered during the on-site inspection had shed light on the investigation.

Sodium Sulphate case

This is the case where the Board discussed leniency concerns in the sodium sulphate, crystal sodium sulphate and raw salt market. Here, Sodaş Sodyum Sanayi, AŞ which is one of the undertakings under investigation, made a leniency application and received a reduction of one-third of the fine to be imposed. In addition, the general manager of the same undertaking also applied for leniency and received a reduction of fine in the amount of 50 per cent.

This document is not intended to create an attorney-client relationship. You should not act or rely on any information in this document without first seeking legal advice. This material is intended for general information purposes only and does not constitute legal advice. If you have any specific questions on any legal matter, you should consult a professional legal services provider.

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