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Results: 4 Answers
Merger Control
7.
Penalties and sanctions
7.1
If notification is mandatory, what sanctions may be imposed for failure to notify? In practice, does the relevant authority frequently impose sanctions for failure to notify?
 
Turkey
As explained in question 3.3, pursuant to Article 16 of Law 4054, if the parties to a notifiable transaction violate the suspension requirement, a turnover-based monetary fine based on the local turnover generated in the financial year preceding the date of the fining decision at a rate of 0.1% will be imposed on the incumbent firms (ie, the acquirer(s) in the case of an acquisition and both merging parties in the case of a merger).

A monetary fine imposed due to violation of the suspension requirement shall in no event be less than TL 26,027 (approximately €4,250) in 2019. The wording of Article 16 of Law 4054 does not give the Competition Board discretion as to whether to impose a monetary fine in case of violation of the suspension requirement. In other words, once a violation is detected, the monetary fine will be imposed automatically.

If, at the end of its review of a notifiable transaction that was not notified, the Competition Board decides that the transaction falls within the prohibition of Article 7 under the dominance test applicable in Turkey, the undertakings may be subject to fines of up to 10% of their turnover generated in the financial year preceding the date of the fining decision. Employees and managers of the undertakings concerned who had a determining impact on the violation may also be fined up to 5% of the fine imposed on the undertakings, as a result of implementing a problematic transaction without the Competition Board’s approval.

In case of failure to notify, in addition to monetary sanctions, the Competition Board is authorised under Article 11(b) of Law 4054 to take all necessary measures to:

  • terminate the transaction;
  • remove all de facto legal consequences of every action that has been taken unlawfully;
  • return all shares and assets (if possible) to the places or persons that owned these shares or assets before the transaction or, if this is not possible, assign them to third parties, and forbid participation in control of these undertakings until such assignment takes place; and
  • take all other necessary measures it deems necessary.

Additionally, under Article 7 of Law 4054, a notifiable merger or acquisition which is not notified to and approved by the Competition Board is deemed legally invalid, with all the attendant legal consequences. Therefore, in such a situation the parties may be unable to enforce their rights under the agreement before the Turkish courts until the Competition Board has cleared the transaction. The Competition Board usually becomes aware that parties to a notifiable merger have failed to comply with the standstill obligation upon receiving a complaint or on an ex officio basis. The Competition Board has issued several fines for violation of the suspension requirement (eg, Tekno Ray, 12-08/224-55, 23 February 2012; Anayurt, 14-22/422-186, 25 June 2014; Fairless-Simsmetal, 09-42/1057-269, 16 September 2009; and Longsheng 11-33/723-226, 2 June 2011).

For more information about this answer please contact: Gönenç Gürkaynak Esq from ELIG Gürkaynak Attorneys-at-Law
7.2
If there is a suspensory obligation, what sanctions may be imposed if the transaction closes while the review is ongoing?
 
Turkey
Closing the transaction without the approval of the Competition Board will breach the suspension requirement, as explained in question 7.1.

For more information about this answer please contact: Gönenç Gürkaynak Esq from ELIG Gürkaynak Attorneys-at-Law
7.3
How is compliance with conditions of approval and sanctions monitored? What sanctions may be imposed for failure to comply?
 
Turkey
In terms of monitoring compliance with remedies submitted, there are no specific timeframes for filing with the Competition Authority. The remedies will include their own reporting/informing mechanisms, which will be approved or amended by the Competition Authority.

For more information about this answer please contact: Gönenç Gürkaynak Esq from ELIG Gürkaynak Attorneys-at-Law