The Turkish Competition Board announced hot off the press the outcome of the investigation against nine Turkish paper recycling companies, and the Turkish paper sector investigation with administrative monetary fine request for waste paper export restrictions resulted in an individual exemption recognition of the Turkish Competition Authority.
ELIG, Attorneys-at-Law has represented Modern Karton, the largest Turkish paper recycling company, in this investigation, which marks one of those extremely rare files in Turkey where a policy concern not directly related to competition law (i.e. a policy concern relating to minimizing trade deficit) may have played a role in the ultimate decision, together with a state action defense of the parties concerned, as the parties collective behavior was influenced by a set of rules brought by the relevant ministry tackling trade deficit.
The Turkish Competition Board found that the defendants violated competition laws by harmonizing their commercial behaviors and colluding against waste paper producers that aim to export waste paper. However, the Board did not levy turnover-based monetary fines against the defendants and granted 3-year exemptions (as of the effective date of the Communiqué No: 2011/6, i.e. June 2011) under objective criteria. These objective criteria are not yet announced but will be delivered to the defendants by the Presidency of the Turkish Competition Authority soon.
Per the regulation on the registered export of waste paper in 2011 (Communiqué No: 2011/6), waste paper producers have to submit at least three approval letters issued by Turkish recycling companies to let these waste paper producers export. Upon a complaint that the Turkish recycling companies misused this regulation to prevent the waste paper export and coordinated their commercial behaviors vis-à-vis waste paper producers, particularly the issuing of the letters, the Competition Board initiated an investigation. After the presentation of the defenses, the Competition Board concluded that the defendants' acts merit an individual exemption, although these actions violated Article 4 of Law No. 4054 on Protection of Competition (which is akin to and closely modeled on Article 101 of TFEU). As the Board accepted defenses that the cumulative conditions of individual exemption were met, the Board granted 3-year exemption to each defendant as of June 2011 ending June 2014.
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