The TCA recently unveiled its highly anticipated Annual Report for the year 2022 (“Report”), offering valuable insights into the authority's endeavours and its progression throughout the year. The Report not only highlights the TCA's enforcement actions and cases but also underscores strategic insights, regulatory amendments, and the monetary repercussions of competition law violations.
Stricter Enforcement and Expanded Scope
In the foreword of the Annual Report, the President of the TCA, Birol Küle, accentuates the importance of adapting to new business models and atypical infringements. The Report underscores how competition law has been deployed across various sectors in a gradual manner, necessitating an economic perspective to address structural market issues. Notably, the TCA broadened its scope to markets significantly impacting citizens' daily lives and financial facets.
In 2022, the TCA concluded 342 cases, encompassing 78 competition infringement cases, 19 exemption/negative clearance applications, and 245 merger and acquisition cases. This represented a slight dip in the total number of cases compared to the previous year.
2022 in Figures
- Merger and Acquisition Decisions
The TCA reviewed 245 transactions in 2022, marking a 21% decrease compared to the preceding year. This decline was partly attributed to increased turnover thresholds following the regulatory amendments introduced in 2022. Most of these transactions entailed acquisitions, joint ventures, and privatisations, with the top industries being chemistry and mining, IT & platform services, and healthcare services. The Competition Board (“Board” or “TCB”) unconditionally cleared 209 of these transactions, while conditionally approving two transactions. Additionally, 34 transactions were deemed beyond the scope or not requiring approval. The Report notes that five transactions advanced to Phase II review, with all but one concluded this year.
- Cases on Competition Violations
The TCA concluded 78 cases related to competition violations in 2022, marking a slight decrease from the previous year. These cases pertained to anti-competitive agreements and abuse of dominance, with 58 of these cases concerning anti-competitive agreements, 14 concerning abuse of dominance, and six being hybrid cases. The TCA dismissed the allegations in 20 out of 24 preliminary investigation files.
The distribution of these cases across sectors revealed a significant focus on the food industry, machinery industry, healthcare services, and information technologies. The Report also spotlighted an increase in the number of investigations and on-site inspections, credited to augmented IT and human resource capacity within the TCA.
- Exemption and Negative Clearance Cases
The TCA concluded 15 cases regarding exemptions and four cases regarding negative clearances in 2022, spanning nine different industries primarily in sectors such as banking, capital market, finance, and insurance services. The TCA granted five individual exemptions, three block exemptions, and four conditional exemptions. One undertaking's exemption was revoked, and in two decisions, individual and block exemptions were evaluated together.
Monetary Fines
In 2022, businesses incurred a total of TRY 1.73 billion in administrative fines. These penalties primarily stemmed from anti-competitive agreements, concerted practices, and decisions of associations of undertakings (amounting to TRY 1.37 billion), and abuse of dominance (amounting to TRY 352 million). Additionally, fines totalling TRY 115 million were levied for obstruction of on-site inspections during the year, while fines for false or misleading information in response to requests for information and onsite inspections amounted to TRY 3.5 million. A sector-bysector analysis reveals that the highest fines, totalling TRY 1.06 billion, were imposed on businesses within the food industry sector, followed by the information technologies and platform services sector (TRY 347 million), and the agriculture and agricultural products sector (TRY 186.7 million). These three sectors represented approximately 92% of the total fines imposed for breaches of competition regulations. Notably, no fines were imposed for gunjumping in 2022.
Regulatory Amendments
Significant amendments were made to Communiqué No. 2010/4 in 2022, extending its scope to cover “killer acquisitions.” This implies that acquisitions of undertakings engaged in critical sectors now require clearance, regardless of their turnover. The turnover thresholds for notification were also revised to reflect changes in the calculation of turnovers for financial institutions. Moreover, the TCA updated its guidelines on the assessment of mergers and acquisitions to align them with the Significant Impediment to Effective Competition (SIEC) test introduced in 2020. The Report includes remarks on its efforts towards a legislative study concerning the Digital Markets Regulation, which is anticipated to foster a higher degree of competition in digital markets and accordingly regulate the gatekeeper power of large companies with significant market power, influenced by the European Commission's Digital Markets Act.
Final Thoughts
The Report concludes that 2022 was a dynamic and productive year for the TCA, highlighting its steadfast efforts to uphold competition principles. It reaffirms the TCA's dedication to enforcing competition laws effectively while adapting to evolving market dynamics. Through strategic initiatives, regulatory amendments, and vigilant enforcement, the TCA continues to play a pivotal role in promoting fair competition, ultimately contributing to a robust and competitive Turkish business environment.
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