According to the Law On The Protection Of Competition and the
Communiqué on the Regulation of Administrative Fines, the
amount of administrative fines arising from the anti-competitive
behaviors of the undertakings may not exceed 10 percent of the
annual gross revenue of the undertakings and associations of
undertakings; or the members of such associations to be fined,
which are generated at the end of the fiscal year preceding the
final decision. If that cannot be calculated, it should be by the
end of the fiscal year closest to the date of the final decision,
and it should be calculated by the Board. This rule is applied by
calculating the total turnover of the undertakings.
Every once in a while, the concept of regulations on
administrative fines lead the undertakings that violate the
competition at a considerably lower rate—compared to the
other undertakings in the same cartel—to be penalized in an
unreasonable way. This type of administrative fines are caused by
the size of turnovers, and they pose a problem regarding the
justification of administrative fines. This can be clearly seen in
the decisional practice of the Turkish Competition Board
("Board"). There are several cases in
which the faultiest undertakings get minimal penalties. Due to the
lack of stipulation for a precise benchmark in the legislation, the
Board widely interprets the concept of "undertaking." So,
when the violation is evaluated along with the presumption of
concerted practices, the minority of the factors in determining
amount of administrative fines lead to serious consequences for the
undertakings. Without any criticism levied at presuming concerted
practices and questioning their existence, it may be slightly more
beneficial for the security of the law to limit the authority of
the Board with more detailed legislation regarding the amount of
The need for more tangible standards in calculating
administrative fines should be fully addressed in future
legislation. Although the calculation should be made in a more
limited area—rather than considering the total turnover of
undertakings—the possibility of eliminating the
legislation's deterrence element by skipping the calculation of
the total turnover cannot be denied. Nevertheless, it is
appropriately specified in the draft penal communiqué that
the gross revenue of the goods and services directly or indirectly
related to the violation— instead of the undertaking total
gross revenue—will be taken into consideration in determining
the amount of administrative fines. If enacted, the aforementioned
disproportionality of the least faulty undertaking might get the
However, determining the gross revenue of goods and services
directly or indirectly related to the violation is still
questionable. Even though the new communiqué theoretically
provides a positive and rational new system regarding the
establishment of the quantity of administrative fines, there is no
other choice but to wait and observe the effects of said amendment
in practice of the Board.
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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