Turkey: Guidelines Project On Commitments And Conditional Authorization - I

Last Updated: 9 June 2011

The Communiqué Concerning the Mergers and Acquisitions Calling for the Authorization of the Competition Board1 ("the Communiqué") which entered into force on January 1st, 2011, brought a legal basis to the commitment and conditional authorization institution. Therefore, the possibility of eliminating the competition concerns which may arise out of operations of mergers and acquisitions via the submission of commitments was granted to the parties, and the possibility of giving a conditional authorization was granted to the Competition Board ("the Board").

Following the publication of the Communiqué, the Guidelines Project on Remedies Acceptable by the Competition Authority in Merger / Acquisition Operations2. ("the Guidelines Project") was prepared and submitted for public comment on February 7, 2011, by being published on the official website of the Competition Authority.

The Guidelines Project, like the Commission notice on remedies acceptable under Council Regulation3 ("the Notice") still in force in the European Union, regulates the general principles of commitments, their characteristics, and the conditions and methods for their execution without eliminating case-by-case examination.

The characteristics of commitments and the different kinds of commitments, as well as their submission to the Board and the sanctions in case of breach are examined within our Newsletter this month.

Characteristics of Commitments

The Guidelines Project foresees an important number of characteristics for commitments:

Commitments are to be submitted voluntarily by the parties of the operation. The Guidelines Project regulates that only the parties of the operation may submit commitments and that the Board may not unilaterally impose a condition or modify the commitments submitted by the parties. Within this scope, if the Board is convinced that an operation of concentration4 may cause competition concerns in the relevant market, the Board will ask the parties to submit commitments which may eliminate these competition concerns in lieu of directly rejecting the operation. Nevertheless, the Board may not oblige the parties to submit commitments, and the parties are totally free to submit or not submit commitments.

This regulation, which is in conformity with the Notice, is felicitous in two points. First of all, it will be easier to reach the objective set by the Guidelines Project. Indeed, by reason of the parties' deep knowledge of the operation, only the parties may submit the best commitments in conformity with the operation of concentration. Furthermore, the Board's behaviour was standardized. Henceforth, the Board will not be able to give conditional decisions even though no commitments were submitted by the parties5.

<>Commitments must be proportional. The principle of proportionality represents another reason for the parties' need to submit commitments. Indeed, since the Board is not as well as informed as the parties on the operation, it may impose a disproportionate commitment on them. The Guidelines Project, like the Notice, only refers to the principle of proportionality but does not define this principle. Thus, the definition of the principle of proportionality will also be included within the Guidelines Project.

The principle of proportionality will be understood as not going beyond what is necessary for the realization of the objectives of the Guidelines Project. In other words, this principle means that, if there is more than one commitment, the least troublesome will be chosen, and equilibrium will be established between the concerns and the objectives.

Commitments will be efficient and implementable. Commitments6 submitted by the parties must be efficient. In other words, the commitments will "eliminate sustainably and without any doubt" the competition concerns which may arise from the operation of concentration. In addition, the commitments must be implementable within the shortest time. Otherwise, in case of any modification in the conditions of the market or in case of the realization of an extraordinary or unexpected situation, commitments will lose their objective and will be insufficient to eliminate the competition concerns.

In order for the Board to determine whether the commitments fulfill these conditions, the parties must also submit to the Board, in addition to the commitments, detailed information on the content and implementation of the commitments and indicate how they will eliminate competition concerns. Nonetheless, the Board will not base its analysis only by using the information submitted by the parties. As a matter of fact, the Board will also analyze elements such as the place of the parties and their competitors in the market, the implementation of the commitments by the parties efficiently and in due time within the conditions of the market.

Accordingly, the obligation to submit commitments which may eliminate competition concerns arising from an operation is the responsibility of the parties, and the analysis of these commitments is the responsibility of the Board.

There is no doubt that this regulation parallel to the Notice is very felicitous. However, in order to easily reach the objectives set by the Guidelines Project, the following amendments must be realized:

  • As with the Notice, the "review clause" must also be included within the Guidelines Project. This clause gives the parties the possibility of modifying their commitments in case of an extraordinary situation such as a modification in the conditions of the market. In this way, the Board, in lieu of directly rejecting the operation, will re-analyze the operation of concentration within the revised commitments.
  • In order for the Board to realize a correct analysis and to give a decision profitable for the economy, it is necessary to mention that documents and information provided by the parties must be accurate. As a matter of fact, the information and documents to be provided by the parties represent the keystone of the commitment and conditional authorization institution.
  • A determined period of time must be provided for the implementation of the commitments. Otherwise, the commitment may be implemented in a longer time which will cause a result contrary to the expected result.

Kinds of Commitments

The different kinds of commitments will be analyzed in detail in our next Newsletter. However, general basic information may be given this month on the different kinds of commitments.

The Guidelines Project, in the same way as the Notice, states that commitments may be structural and behavioural. Structural commitments mean commitments which cause a modification in the structure of the undertaking such as a divestiture. This kind of commitment necessitates short-term control because it may be implemented instantly. As for behavioural commitments, they are related to the future market behaviour of the parties. These commitments, contrary to structural commitments, necessitate long-term control because they may be implemented within a long period a time.

Although the Guidelines Project states that both structural and behavioural commitments may be submitted, it stipulates that behavioural commitments may be implemented de facto in the absence of a structural commitment. As per the Guidelines Project, behavioural commitments may be accepted if they may reach an efficiency level comparable to a structural commitment and if there is no structural commitment having an equivalent effect.

However, behavioural commitments may be as efficient as structural commitments. For that reason, the condition of the absence of a structural commitment will not be provided for the implementation of behavioural commitments. The principle of proportionality also necessitates that a behavioural commitment be implemented if it is sufficient to reach the expected objective. Indeed, behavioural commitments are nearly always the least troublesome and most economical in comparison with structural commitments. For that reason, it is necessary to modify the Guidelines Project and to disconnect the acceptance of behavioural commitments from the absence of structural commitments.

Submission of Commitments to the Board

The Guidelines Project states that commitments may be submitted with the notification or after the notification during the preliminary or the final examination phase. In the notification form annexed to the Communiqué, a special part was separate for commitments.7

Submission of Commitments in the Preliminary Examination Phase. The Guidelines Project states that commitments may be accepted in the preliminary examination phase on condition that competition concerns may be readily identifiable and easily remedied and that the commitments submitted in order to eliminate these competition concerns are clear and evident. In this sense, substantive and implementing commitments entered into by the parties must be submitted in full and in detail and signed by a duly authorised person. Furthermore, the parties must, by reason of the time limitation, submit the commitments on time to the Board.

Even if this regulation is parallel to the Notice, the Guidelines Project does not state that both the competition concerns arising out of the operation of concentration and the commitments submitted in order to eliminate these competition concerns must be so clear that a deep examination is not needed. However, the non-necessity of a deep examination represents the basis of the preliminary examination. For that reason, this point must also be clearly included in the Guidelines Project.

Submission of Commitments in the Final Examination Phase. The Guidelines Project states that commitments may be submitted with the written pleas related to the final examination report at the latest and that, by reason of the duration of the final examination, the commitments may also be developed in the second written pleas on condition that they have been submitted at the beginning of the final examination.

Commitments submitted in this phase are, in principle, pending until the final decision of the Board. Nevertheless, if the professional person empowered to analyze the commitments reach the conclusion that the commitments are sufficient to eliminate the competition concerns before the ending of the final examination report, he or she may submit the commitments to the Board's agenda along with the report prepared by the same authorized person.

As can be observed, the final decision related to commitments may be given before the final report in this phase. Therefore, the parties must also in this phase give full and fair information in order for the commitments to be examined without any loss of time. However, this point is not indicated in the Guidelines Project. Moreover, the Guidelines Project does not indicate how the commitments are to be submitted to the Board. Nonetheless, the commitments must be submitted to the Board in this phase after being signed by a duly authorized person. For that reason, all points mentioned above must either be listed in this part too or be referred to in the preliminary examination phase.

Distinction between Condition and Obligation and Sanctions for Their Breach

The Guidelines Project, as with the Notice, states that condition and obligation have different meanings but, in lieu of giving their definitions, it explains these notions via examples. As a matter of fact, the Guidelines Project sets forth that the divestiture of a business unit is a condition and that the appointment of a divestiture trustee is an obligation. Nevertheless, it is necessary that these notions be defined within the Guidelines Project. Within this scope, it must be included within the Guidelines Project that a condition means the requirements determined in relation with the commitments submitted by the parties and that obligation means the implementing steps / methods which are necessary to achieve the requirements.

The Guidelines Project also determines the sanctions for breach of the conditions and the obligations. Within this context, the Guidelines Project states that for breach of a condition, the conditional authorization decision will be automatically nullified and that, in case of breach of an obligation, an administrative fine will be levied on the parties.

The regulation of this point within the Guidelines Project is very felicitous. Indeed, the confusion existing in the Notice for the case of breach of the obligation was not reported in the Guidelines Project, and a determined sanction was foreseen for that situation.


The Guidelines Project constitutes a kind of road map for the operations of concentration. For that reason, in order for the objective of the Guidelines Project to be reached, it would be better if the material amendments mentioned above are also taken into consideration.

Additionally, with a view for the Guidelines Project to be useful and comprehensible, some amendments related to the form of the Guidelines Project should be made. The proposed amendments at first glance are as follows:

  • If the amendments noted above are made, these amendments should be regulated under different articles and a title should be given to each article;
  • Unnecessary repetitions should be removed and the plan of the Guidelines Project should be re-determined;
  • Additionally, similar to the Notice, reference should be made to prior Board decisions. In this way, the comprehension of the Board's practice will be easier;

The notion of "proposition of remedy" should be replaced by the notion of "commitment". As a matter of fact, the Guidelines Project regulates that the parties behave in a certain way and not that they bring forward a proposal.


1. Official Gazette, 07.10.2010, 27722.

2. To reach the Guidelines Project, see: http://www.rekabet.gov.tr/dosyalar/images/file/BD-Cozumlerine_Iliskin_Kilavuz_Taslagi.pdf.

3. Official Journal of the European Union, 2008/C – 267/01.

4. The term "concentration" is used in the Guidelines Project instead of "mergers and acquisitions" and it is stated that the term "concentration" includes mergers and acquisitions and full-functional joint-ventures.

5. There are a lot of conditional decisions given by the Board although no commitments were submitted by the parties: Metro / Migros Decision, 19.03.1998, 57/424-52; POAŞ Decision, 18.02.1999, 99-8/66-23, Glaxo Wellcome / SmithKline Decision, 03.08.2000; 00-29/308-175; Toros Tarım / Sümer Holding Decision, 21.02.2008; 08-16/189-62 and Doğan Gazetecilik / Vatan Gazetesi Decision, 10.03.2008; 08-23/237-75.

6. The term "remedy proposition" is used within the Guidelines Project in lieu of "commitment". However, the term "commitment" will be used in our article.

7. Commitments may be submitted under point 11.5 of the notification form. See fn. 1.

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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