Turkey: TCA Revises Terms Of Block Exemption For Motor Vehicle Sector

Last Updated: 5 June 2017
Article by Dr. Eren Gunay

Turkish Competition Authority (TCA) has published a new Block Exemption Communiqué (Communiqué No. 2017/3) for the Vertical Agreements in the Motor Vehicle Sector ("New Communiqué) on 24 February 2017, updating terms of the block exemption on specified vertical arrangements. With this New Communiqué, the Competition Authority has instituted some changes in policy, in line with the 2011 sector study that they have conducted. This regulatory update follows a similar update by the European Commission, whose Regulation No. 461/2010 necessitated changes to some of the provisions of its Regulation No. 1400/2002.

The New Communiqué, replaces Communiqué No. 2005/4 which was in force since January 1, 2006. The Competition Authority has instituted a grace period of two years to achieve compliance with new provisions stipulated in the new communiqué.

In their study, TCA deemed that market concentrations in the sales market were in line with competitive markets and observed that prices have not increased in real terms since 2005, despite increased demand. TCA concluded that there was no evidence of a sufficient degree of market failure necessitating stricter measures on the sales market. On the other hand, in the after sales market, referring to spare parts and repair and maintenance services, the study has identified market distortions, including high profit margins and high market concentration of authorized dealers in the after sales market for more recent vehicles.

Conditions to Qualify for the Block Exemption Have Been Removed

In Communiqué No. 2005/4, block exemption was subject to meeting some restrictions on vertical arrangements which are no longer conditions in the New Communiqué.

Previously, vertical contracts could not restrict dealers or after-sales service providers from transferring their rights and obligations arising from the vertical arrangement to another dealer or service provider within the authorized network. Further, both parties to the vertical contract were obligated to specify their reasons to terminate a contract with proper notice. Since provisions of the Turkish Commercial Code (Law No. 6102) and the Turkish Code of Obligations (Law No. 6098) allow the intended results of these provisions, such provisions were deemed no longer necessary in the new communiqué. Likewise, the provision of the right to arbitration to settle disputes was removed due to conflict with Article 413 of Law No. 6100 on Civil Procedure.

Marketshare Thresholds Have Been Simplified

Companies will benefit from this block exemption as long as their market share remains below the threshold set at 30%. This threshold will apply equally to the sales and after-sales markets and to exclusive distribution and quantitative selective distribution systems alike. This implies a lowering of the threshold set at 40% for quantitative selective distribution networks under the guidelines of the previous communique, while maintaining the other thresholds. As before, no threshold has been set for qualitative selective distribution networks.

Sector studies conducted by TCA have indicated that differentiated thresholds have not contributed to efficiency, but market participants have found compliance challenging. Specifically, shares of participants in the sales market have remained below the threshold and therefore they have chosen to implement quantitative selective distribution systems, whereas participants in the after sales market have chosen quantitative or qualitative selective distribution systems based on whether their market shares have remained below or exceeded the threshold, according to their own estimation of market shares. However, such estimations of market share cannot be corroborated by the Competition Authority and create legal indeterminacy. Following these, the thresholds have been homogenized to create a simpler policy.

TCA has also argued that high profit margins incentivize market entry when qualitative-selective distribution systems are implemented, however the determination of whether qualitative conditions have been met by a service provider to become authorized should be left to the court system and regulation should not be introduced.

Single-Branding Obligations (Non-Compete Clauses)

Under the new regulation, any direct or indirect obligation by a supplier to limit the buyer's purchases from other (non-designated) suppliers to below 20% of the buyer's total purchases for some class of goods or services constitutes a single-branding obligation. In other terms, there is a single-branding obligation when a supplier obliges a buyer to make at least 80% of its purchases for a product or service from that supplier. Previous regulation had set the threshold at 70%, that is a supplier would have enforced single-branding obligation by requiring to provide at least 30% of a buyer's total purchases.

Previously, no single-branding obligation would benefit from the block exemption, but under the new regulation, single-branding obligations on dealers (sales market) will benefit from the block exemption, provided they have terms no longer than five years or they may only be extended by mutual consent after five years. No such exemption is provided for the after-sales market which was determined to be less competitive than the sales market in the 2011 study. Chains of independent spare parts providers will benefit from the block exemption for single-branding obligations of terms no longer than five years.

Thus, the new regulation is more permissive towards vertical agreements limiting multi-branding in the sales market. Similar regulatory changes were introduced by the European Commission, based on the observation that the previous regulation did not succeed in introducing in-store competition between brands providing little benefit from increased competition while introducing additional costs as manufacturers demanded greater levels of investment from their dealers to defend their brand identity against multi-branding.

This block exemption will not apply to obligations relating to the establishment of additional spare parts sales outlets or after-sales service facilities, however suppliers may prevent dealers in the sales market from establishing new outlets. Again, this differentiated approach mirrors the study findings of limited competition in the after-sales service and spare parts market.

Equivalent Spare Parts are Underutilized but Certification Has Been Introduced

The after sales market has been observed to be dependent on Original Equipment (OE) spare parts, supplied by the manufacturer of the vehicle. OE equivalent parts have low market share and are found only at independent service providers because certification of OE equivalence was not introduced until recently. In their study, the Competition Authority determined that certification of equivalent spare parts was necessary to improve market competition. Since then, Prime Ministry's Undersecretariat of Treasury has issued Circular No 2015/2 dated January 13, 2015, effective June 1, 2015 which tasked Turkish Standards Institute (TSE) with the certification of equivalent spare parts for a term of two years. After the expiration of that term, accredited bodies will be allowed to certify spare parts as equivalent to OE. As before, in their new communiqué, TCA has excluded from the block exemption any vertical restrictions on the procurement of OE or OE equivalent spare parts from third parties, other than for work carried under warranty cover.

Regulation of Access to Technical Information is Outside the Scope of the Communiqué

Independent after sales service providers should have access to the same technical information, training and equipment as service providers in the authorized network. However, TCA has removed relevant regulation from the new communiqué since such access is extensively regulated by European Community regulations No. 715/2007 and No. 595/2009 published in issues No. 27207 (dated April 21, 2009) and No. 28014 (dated August 3, 2011), respectively, of the Official Gazette of the Republic of Turkey. Regarding access to technical information on vehicles sold before 2008 or technical information not within the scope of the referred directives, TCA would evaluate the matter according to Article 6 of Act No. 4054. However, it could be argued that access to technical information is necessary primarily for new models of vehicles and therefore lack of regulation on this matter is not expected to limit market competition.

Out-of-Warranty Cover Repair or Maintenance Work During the Warranty Period is Not Addressed

TCA has argued before releasing this communiqué that existing regulations imply that authorized after-sales service providers should execute out-of-warranty work during the warranty period and no stipulations should be introduced with a communiqué even though independent service providers have been restricted from the after sales market for warranty-covered vehicles. Allowing authorized service providers to recoup their investment should ensure availability of after sales service and assure parts supply. TCA has cited Article 7 of the "Implementing Regulation on Introductory Guide and User's Manual" on the determination of the timing and provision of periodic maintenance, Article 11 of the "Implementing Regulation on Certificate of Guarantee" on the determination of whether any defects were caused by misuse and Article 14 of the "Regulation on After Sales Services" on the provision of after-sales service. These regulations were published in issue No. 29029 (dated June 13, 2014) of the Official Gazette of the Republic of Turkey. With these regulations, the manufacturer or importer, vendors and authorized service centers have been authorized to determine existence of misuse and obliged to determine details of periodic maintenance and to provide after-sales service. As stated above, TCA has argued that these regulations imply that out-of-warranty work should also be performed by authorized after-sales service providers on vehicles covered by warranty.

Final Remarks

The new communiqué differentiates between the sales and after-sales markets following the findings of the sector inquiry of 2011. Since the sales market was deemed to be vibrant, some of the restrictions on vertical agreements have been removed, allowing single-brand obligations and allowing suppliers to deny dealers additional sales outlets. In contrast, the after-sales market has been found to have limited competition based on the dominance of authorized service providers for repair and maintenance work during the warranty period and limited availability of certified OE equivalent spare parts. Therefore, the Competition Authority has preserved restrictive provisions found in the previous regulation.

In other changes, general conditions and the obligations to provide access to technical information have been left out of the scope of this regulation, based on the argument that such provisions may be found in other regulations or laws.

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”

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
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

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