Turkey: Recent Activities In Competition Law

When considering the developments in recent months regarding competition law and practice in Turkey, the words ‘fast’ and ‘furious’ come to mind.

Debate continues regarding amendments to Law No. 4054 on the Protection of Competition ("Law") and changes in the secondary legislation. Various significant decisions have been taken, emphasizing the importance of the role played by the Competition Board ("Board") in the economy. Moreover, the Council of State decisions regarding both the procedural aspects of the Board decisions, and the substantive assessment thereof, have created ambiguity regarding the application of competition law.

A. The Black Letter Law

i. The Legislative Work

The proposed amendment to the Law published by the Board has long been debated among the practitioners as well as scholars. However, while the scope of the proposal is almost equal to a redrafting of the Law, nothing further has been declared or published by the Board regarding any possible amendments to the published version of the proposed amendments. Accordingly, it appears that any interested party will again be informed of the amendments through proposals sent to the Turkish Grand National Assembly as was the case in the proposed amendments regarding the Telegraph and Telephone Law No. 406, which opened for discussion substantial changes to the Law’s application in the telecommunication sector.

ii. Draft Electronic Communications Law

The scope and the content of the Law have been greatly debated within the telecommunications sector, particularly in the aftermath of the Roaming1 decision, with the tension between the Telecommunication Authority and Competition Authority coming to the surface in almost all instances. The draft Electronic Communications Law ("Draft") aims to settle the question of jurisdiction in restrictions of competition proceedings in the sector by allocating the duty and the power to investigate restrictions of competition in the sector to the Telecommunication Authority. However, certain aspects of the Draft seem to aggravate rather than ease the problems previously identified such as (i) granting both authorities jurisdiction relating to restrictions of competition in the sector; (ii) not classifying the behaviors restricting competition (i.e. agreements or abuse of dominance) or the procedure to be followed when investigating such; and (iii) not including any instrument to harmonize with the measures of the authorities.

iii. The Revision in Secondary Legislation

Three recent developments, (i) adoption of the new Communiqué No. 2005/4 on Vertical Agreements in the Motor Vehicle Sector ("Communiqué No. 2005/4"); (ii) abolition of Communiqué No. 1997/2 on the Notification of Agreements, Concerted Practices and Decisions of the Association of Undertakings ("Communiqué No. 1997/2"); and (iii) amendments to Communiqué No. 1997/1 on Mergers and Acquisitions ("Communiqué No. 1997/1") are of significance regarding the secondary legislation.

Communiqué No. 2005/4, substantively in line with the European Commission Regulation No. 1400/2002 on the Application of Article 81(3) of the Treaty to Categories of Vertical Agreements and Concerted Practices in the Motor Vehicle Sector, is expected to bring about significant changes in the organization of the motor vehicles sector with its implications being felt well before the adoption of the communiqué. While this is the case, ambiguities within Communiqué No. 2005/4 unfortunately affect its application. While the heart of the communiqué resides in limiting the exemption benefit to those below the market share threshold and the abolition of non-compete restrictions, which were formerly allowed under the preceding Communiqué No. 1998/3 on the Distribution and Servicing of Motor Vehicles,2 the relevant measuring sticks determining the proper application of the communiqué must be explained through explanatory notes as is well known from the EU experience. However, despite the European practice, the Board has not yet published any notice, communication or alike explaining the fundamental concepts of the communiqué. Accordingly, once again, the lack of guiding rules dominates the practice and there is an immediate need for administrative standards regarding such secondary legislation that will have its blueprint on the future of the motor vehicle industry in Turkey.

As we have announced in previous newsletters, the obligation to notify the Board of the agreement’s concerted practices or decision of association of undertakings has been abolished through an amendment in Article 10 of the Law.3 Accordingly, the Board recently withdrew Communiqué No. 1997/2, which outlined the rules and provided the relevant form for such notification.4 While this was expected, considering the fact that the Board still holds the exclusive power to exempt agreements from the prohibition under Article 4 of the Law, it is not clear as to how undertakings that wish to obtain an exemption from the Board as the most appropriate way to achieve legal certainty for their future transactions, should apply to the Board.

Finally, the Board, through the foregoing communiqué abolishing Communiqué No. 1997/2, amended Communiqué No. 1997/1 in order to reflect such changes in the notification of agreements.

One expects that the change in the black law will be reflected in practice, particularly with regard to ancillary restraints that become burdensome for businesses. In this context, the decision on the assessment of ancillary restraints in Intralot5 is of significance.

B. The Decisions

The Intralot Decision

This decision, which deemed the decrease in the number of the shareholders jointly controlling the target as a concentration subject to notification, is important due to its interpretation of ‘ancillary restraints’. The decision determines that any restriction aimed merely to protect the "value of shares" subject to transfer should not be deemed as an "ancillary restraint" and only those that aim to protect "the transfer of the business to the acquirer" should be classified as such.

The Board ruled that because there was not a transfer of the business, the non-compete obligation imposed on the seller may not be classified as an ancillary restraint. The decision is of importance as it casts doubt on the legal validity of any possible non-compete restrictions imposed in similar instances.

However, the decision creates other intriguing debates (considering the fact that the transaction should have, in fact, not been notified to the Board as it did not fall within the scope of the communiqué since there was no change of control) such as the legal status of restrictions imposed on sellers in cases either not falling within the scope of the communiqué or below thresholds and, the legal nature of the conditional approvals by the Board imposing obligations on the parties to amend such restrictions. Because the Law has changed in respect to the notification obligation regarding agreements, the Board should focus its analysis solely on the assessment of the substance of the case and should assess the restriction if necessary from an exemption point of view, rather than merely adopting conditional approvals to amend such restrictions. It may also be argued that such obligations do not affect the substance of the case, since they are deemed as ancillary by nature and they may not be subject to a "conditional approval" by the Board.

The Cement Decisions

The Board’s decision in the cement privatizations6 has also attracted the attention of the press. The Board blocked certain of the cement privatizations through utilizing, in particular, the collective dominance theories. However, it was in fact the approach of the Council of State, in its judicial review while rendering a suspension order, that remarkably ignited discussions among scholars and practitioners. The Council of State noted in its decision7 that (i) the transaction did not lead to a single dominance; (ii) the assumption about the undertakings’ future behavior in the post-merger market structure by considering the previous restrictions of competition among the same parties in other geographic markets was erroneous in itself and inconsistent with the approach in the geographic market definition; and (iii) the collective dominance was not referred to in the wording of Article 7 of the Law, dealing with mergers and acquisitions.

Privatization Decisions

While the Board’s approach to privatizations has encountered much debate particularly in respect to the scope of the powers of the Board under the model of privatizations, which has not yet been judicially tested, the decisions of the Board in the last year, particularly regarding Türk Telekom and the privatization of the ports where the Board blocked the acquisition of the İskenderun Port by the acquirer of a neighboring port, were significant. However, the real importance of such decisions goes beyond the actual effect of the acquisitions, because many such decisions involve the granting of a concessionary right to the successful bidder regarding the operation or provision of certain economic activities that reside, arguably, outside of the scope of the Law. The Board decision regarding granting of a concessionary right for the provision of a compulsory physical 8

The Yeast Decision

The yeast market has long been subject to investigations of the Board, as the market is composed of a very limited number of participants. As expected, the issue of price movements in this market has been scrutinized by the Board. Drawing a distinction between rational market behavior of the undertakings in question and coordinated behavior was a daunting task for the Board. While this task is sometimes a heroic one, the recently published yeast decision of the Board9 blurred the line between restricted practices and the ordinary market behaviors of undertakings, which has been criticized for stretching the outer bounds of the presumption of concerted practice under the Law because the only material issue was the parallel nature of the undertakings’ prices subject to investigation that was uncovered by the Board.

"Procedural" Decisions

One peculiar characteristic of Turkish Competition Law has been the procedural irregularities in the decisions of the Board, that later resulted in a great tide of annulments by the Council of State. Certain Council of State decisions, formerly adopted on the grounds that the decisions lacked dissenting opinions, are currently followed by the decisions taken on the grounds that such were legally erroneous because the investigating Board member took part in the decision meetings. Moreover, a recent set of decisions by the Council of State is to vacate many of those decisions adopted by the Board in the last year on the ground that, while it is stated in the Law that the Board is formed of seven members, it was legally erroneous for the Board to convene and adopt decisions with eight members, the additional seat emanating from the fact that as the number of the Board members changed, there were already eight members and the amending Law did not contain a temporary article considering the status of such 8th member.Within this environment, and the delicacy of procedural issues before the Council of State, the Board’s approach to those decisions vacated by the Council of State is significant. To date, the Board has re-adopted such decisions without, however, initiating a separate procedure about the alleged facts. Accordingly, one may also see a new tide of decisions by the Council of State annulling such decisions as well as the standing of the Board in such decisions is even more arguable among scholars before their judicial review.


1. See Competition Board decision, Roaming, dated 9 June 2003 and numbered 03-40/432-186.

2. Based fundamentally on its European counterpart, that is Regulation (EC) No 1475/95 on the Application of Article 85(3) of the Treaty to Certain Categories of Motor Vehicle Distribution and Servicing Agreements (Regulation 1475/95).

3. Through Law No. 5388 on the Amendment to Certain Provisions of the Law on the protection of Competition, dated 2 July 2005.

4. Through Communiqué No. 2006/2, published in the Official Gazette dated 9 March 2006.

5. See Competition Board Decision, Intralot/ Teknoser, dated 22 December 2005 and numbered 05-87/1201-349.

6. See Competition Board decision, Ladik/ Akcansa, dated 20 December 2005 and numbered 05-86/1188-740.

7. Council of state decision Ladik/ Akcansa, dated 1 March 2006 and numbered E. 2005/10038.

8. See Competition Board decision Zorunlu Fenni Muayene, dated 2 February 2006 and numbered 06-08/98-26.

9. See Competition Board decision Pakmaya, Oz Gida, Mauri Maya, Akmaya dated 23 September 2005 and numbered 05-60/ 896-241.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions