Turkey: The Draft Guidelines On Commitments To Remedy Competition Authority Concerns

The Communiqué on Mergers and Acquisitions Calling for the Authorization of the Competition Board ("Communiqué No. 2010/4") that entered into force on 1 January 2011 establishes the legal basis for the institution of commitments to remedy the Turkish Competition Authority's concerns arising from market concentrations created by mergers and/or acquisitions. Following publication of Communiqué No. 2010/4, the Draft Guidelines on Remedies Acceptable by the Competition Authority in Merger and Acquisition Operations (the "Draft Guidelines") were submitted to the public for comments in February 2011 through the official website of the Competition Authority.

The Draft Guidelines state general principles, types and conditions of commitments, and the methods for their execution.

General Principles of the Draft Guidelines

The Draft Guidelines set out important principles regarding implementation of the commitments:

  • Commitments will only be submitted voluntarily by the parties of the operation. This principle means that the Competition Board (the Competition Authority's highest decision-making body) may neither oblige the parties to submit commitments, nor unilaterally impose a condition, nor modify the commitments that the parties have submitted. In actual fact, the parties are left totally free to submit or not to submit commitments regarding their market concentrations.
  • Commitments must be efficient and easy to apply. The commitments submitted by the parties must be efficient and must eliminate, immediately and without any doubt, any competition concerns arising from the concentration. They will be applicable within a short period of time without losing their objectives or positive effects.
  • Commitments must be proportional. This principle of proportionality explains the reason for commitments to be submitted, only voluntarily by the parties, and why the Competition Board may not impose commitments on behalf of the parties. The Board may not understand the parties' financial intentions concerning the operation and may impose disproportionate – and thus financially unacceptable – commitments on them. In other words, if there is more than one possible commitment, the one that is least problematic will be chosen, so that the balance between the danger of restriction and the objective of the commitment is maintained. (Note: The Draft Guidelines only refer to the principle, but do not define it. For the sake of clarity, it might be useful to have the definition and application criteria added to the Guidelines.)

Different Types of Commitments

The Draft Guidelines specify two types of commitments: (1) structural and (2) behavioral.

1. Structural commitments concern commitments that structurally modify the operation. The most common example is divestiture.

  • The Draft Guidelines provide rules and principles for the commitment of divesting a business. The said commitment may be seen as the total divestiture of a viable stand-alone business in a market or the grouping of various assets and/or the withdrawal ("carve-out") of certain of these assets from an existing viable stand-alone business in a market.
  • The Draft Guidelines specify the implementation phases for the divesture commitments are the determination of a suitable purchaser, the approval of the purchaser, and the conclusion of the purchase agreement. The Draft Guidelines also underline the obligations of the parties during the period between the clearance decision (including commitment) and the divestiture of a business to a suitable purchaser, e.g., appointment of a divesture trustee.

2. Behavioral commitments refer to the future market behavior of the parties in an operation and require long-term implementation methods, such as production restrictions. Examples of behavioral commitments under the Draft Guidelines are the granting of access and termination of long-term exclusive agreements. Behavioral commitments may be applied if they guarantee an efficient solution to competition concerns, such as structural commitments on the condition, as in the present case, that structural commitments may not have an equivalent effect.

It should be noted that the parties are not limited by the commitment examples stated in the Draft Guidelines and are free to submit other commitments, which they consider to be convenient for concentration and for their financial concerns.

Submission of Commitments

The Draft Guidelines stipulate that commitments may be submitted in parallel or following notification during the Competition Authority's preliminary or final examination phase. The new Notification Form annexed to Communiqué No. 2010/4 features a section in which parties may disclose their commitments.

Breach of Commitments and Obligations Attached

The Draft Guidelines stipulate the consequences of breaching the conditions of commitments and/or obligations attached to the commitments. We underline that the terms "condition" and "obligation" differ from each other. A condition is a substantial part of the commitment, whereas an obligation concerns an accessory or auxiliary condition of the commitment.

The Draft Guidelines do not contain definitions of "condition" and "obligation," but provide some examples to consider. For instance, the divestiture of a business unit is a condition, and the appointment of a divestiture trustee is an obligation. Even if the examples are clear enough in practice, definitions to be provided in the Draft Guidelines for both terms will be useful for practitioners.

According to the Draft Guidelines, the breach of a condition will result in the automatic annulment of the authorization. However, the breach of an obligation will result only in an imposition of administrative fines, and the authorization will retain its applicability and validity.


The Draft Guidelines not only constitute a legal foundation, but also cover the general principles, types and conditions of the commitments and the methods of implementation that may be applied in the context of concentrations.

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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