Turkey: Questioning Legitimacy Of Turkish Competition Board's Recent Decisions

Last Updated: 3 November 2016
Article by Bahadir Balki, LL.M. and Ayberk Kurt
  1. Introduction

Under the Law of Turkey on Protection of Competition (the "Turkish Competition Law") 1, the Turkish Competition Board (the "TCB") is subject to a meeting and decision quorum to be able to adopt decisions in a legitimate manner. However, in its recent decisions, which are qualified as final, the TCB clearly deviated from the meeting and decision quorum requirements, which prima facie raises questions as to their legitimacy.

In this article, we briefly analyse the TCB's decision-making process and discuss the issue of legitimacy of TCB's decisions taken in breach of the quorum requirement, which may potentially trigger legal actions for their annulment and hence may affect the interests of the business parties concerned. 

  1. Meeting & Decision Quorum

During the period 5-19 October 2016, the TCB published2 28 decisions (taken between 27 July and 25 August 2016) in relation to matters including access to the file, merger control and negative clearance. The decisions were adopted by the attendance and positive vote of only four out of seven TCB members, whereas Article 51 of the Turkish Competition Law, which regulates the statutory meetings and decision quorums, sets out the following:

Meeting and Decision Quorum

In its final decisions, the Board convenes with the participation of at least a total of five members including the Chairman or the Deputy Chairman, and it decides through unanimous votes of at least four members.

Where the necessary quorum for the decision cannot be attained in the first meeting, the Chairman ensures that all members participate in the second meeting. However, if not possible, the decision is made via the absolute majority of the participants in the meeting. In this case, the quorum for the meeting may also not be less than the one mentioned in the first paragraph. In case of a tie vote in the second meeting, the vote of the side of the Chairman is deemed preponderant.

  1. Observations

Considering the crucial nature of the TCB decisions in business life, the legislator describes the meeting and decision quorums in detail. In this respect, for final decisions of the TCB (involving matters such as merger clearance, investigation, individual exemption and negative clearance), aggravated meeting and decision quorums are mandatory under Article 51 of the Turkish Competition Law. For a meeting to be duly held, attendance of at least five TCB members is mandatory, whereas a decision can only be adopted with the unanimous vote of at least four attendees.

However, contrary to the legal provisions on this matter, the TCB, as already mentioned, adopted final decisions during meetings with the attendance of only four board members instead of (at least) five members and by unanimous votes of the attendees. Such deficiency in the meeting quorum and decision-making process demonstrates a violation of the procedural rules and brings into question the legitimacy of these 28 decisions. This issue especially raises concerns for the involved parties, as where an administrative act encompasses procedural defects; an action for annulment may be filed. It should be noted that there have been numerous cases where the TCB's decisions adopted in violation of the quorum requirement were annulled by the court, on the grounds of procedural violations. Having said that, as per the administrative litigation procedure, in case there is no annulment request within 60 days as from the publication date, the decisions of the TCB become definitive.

  1. Concluding remarks

The fact that the TCB has failed to comply with the meeting and decision quorum requirements in its recent decision-making process, places question marks of legitimacy. These decisions may potentially be subject to an action for annulment on the grounds of procedural law violations. The business parties concerned should understand the risk of any deviations by the TCB from the procedural requirements in the course of decision making process, since it may directly affect their interests and business activity.

Footnotes

1 Law numbered 4054 on the Protection of Competition Law http://www.rekabet.gov.tr/en-US/Pages/Act-No-4054

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Authors
Bahadir Balki, LL.M.
 
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