Turkey: Turkish Competition Law

Last Updated: 23 July 2010
Article by Bilge Saltan

Turkey's legislation in the Competition Law field is not recent. Many bills were drafted by the Turkish Ministry of Trade starting from 1971 with the "Bill on the Regulation of Activities Related to Goods and Services, which are Subject to Trade, for Protection of the Consumer" till 1984 when the Ministry of Industry and Trade drafted the "Bill on the Agreements and Practices Restricting Competition". While the first bills were related to consumer of protection, the latter bill discussed monopolization and cartelization in separate sections and finally The Act No.4054 on the Protection of Competition "Competition Act" was established in 1994.

In this law making process, adoption of European Union's economic model to national policy has been most effective as Turkey had felt an urge to fill the gap in regulation. There are two main reasons to explain this urge. The first reason is that Competition regulations are necessary tools for every market-based economy. Competition is defined in economic terms by the official website of the TCA (Turkish Competitive Authority) as the rivalry in a market engaged in by sellers to increase their sales of goods and services by gaining more customers, thus increasing their profits. The second reason arises from Turkey's obligation to comply with the European standards. With this respect should Turkey wishes to have an economy such as in European countries, effective measures against anticompetitive behaviors are needed to be adopted .

In order to regulate competitive market; The European Union's legislation is a good trustworthy example which had inspired many non European Union countries such as Turkey. For an example Article 101 of the Treaty on the Functioning of The European Union "TFEU" (ex Article 81 of the TEC) prohibits company agreements which are incompatible with the internal market: "All agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market...". As a reflection of this regulation Turkish Competition Act prohibits agreements and concerted practice limiting or having a risk of limiting the competition within the context of the Article 4. It is obvious that undertakings are the decision making power and the controller of the market. When acting together, market may have a risk to go to the oligopoly market. With the dominant position, undertakings may give a direction to the market of good or service for their own benefit. This will lead an inevitable breach of the principles of competitive market. However agreements, concerted practices and decisions would be lawful in the case, where those activities aid to improve economic and technique condition of the service and the good market, when consumer benefits and general economic benefits are higher, when the activities do not affect competitive market.

Furthermore Article 102 of the TFEU (ex article 82 of the TEC) states that the European Union prohibits any abuse of dominant positions: "Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States". As an adoption of this, Article 6 of the Turkish Competition Act is related to the prohibition of the abuse of the dominant position. The crucial point here is to make a distinction in two points; whether the actor is in a dominant position or not. It is not illegal to be found in a dominant position in a competitive free market. The point is to make consumer dependent to the dominant undertaking, and the abuse of the position.

As stated above the "Competition Act" resumes these major prohibitions in its Articles 4 and 6 with some amendments. It also introduces new principles which are not regulated in the European Union law as the "Concerted Practice Presumption". Moreover, the Competition rules included in the European Council Regulation No.139/2004 on the control of concentration between undertakings also appear in the Turkish "Competition Act No.4054" in its Article 7. However, Turkey takes into consideration many relevant EU case-laws while applying the Competition Act clauses more effectively.

Additionally, The Turkish "Competition Act No.4054" establishes the Turkish Competition Authority "TCA" as an autonomous law enforcement agency with vast investigative prerogatives. The Board consists in seven members appointed for six years. The enforcement procedures to investigate an alleged fair competition violation start whether with the TCA initiative or with a complaint. Should an infringement is established; the TCA is empowered to fine the transgressing undertakings. Its decisions may be appealed to the special chamber of the Turkish Council of State competent to review TCA rulings. This national authority structure tends to fits the European standards. Compared with one of the European Countries, France also embraces quite a similar organization in its Competition Authority. Although the French Board members are numerous, the general organization of both authorities presents a few similarities. Both authorities gained the required respectful position within the scope of business community that guarantees an effective mission for them. Some differences are still ought to be highlighted: Unlike the French Competition Authority which had built many co-operations ties with other national competition authorities, the TCA is still working on establishing agreements with other competition agencies. Cooperation across national boundaries is a necessary measure to take in order to reach effective competition law enforcement. This lack can be justified by the TCA being a recent institution. The challenge from now on will be to work on gaining more experience in the years to come in order to boost its chances on being an important regulation authority worldwide.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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