Certain restrictive agreements satisfying the conditions for the block exemption regime are exempted from the prohibition under Article 4 of Law No. 4054 on the Protection of Competition (the “Competition Law”). Article 5 of the Competition Law empowers the Turkish Competition Board (the “Board”) to, inter alia, issue communiqués that set forth the conditions to grant block exemptions to certain types of agreements. The most common and widely-applicable aspect of the block exemption regime concerns vertical agreements. To that end, Block Exemption Communiqué No. 2002/2 on Vertical Agreements (“Communiqué No. 2002/2”) regulates the conditions of block exemption for general vertical agreements for the supply of products/services.

The block exemption under Communiqué No. 2002/2 would apply on the condition that the supplier’s market share(s) in the relevant market(s) for contract product(s)/service(s) do not exceed 40%. Vertical agreements that feature obligations to supply to a single buyer would benefit from the block exemption, to the extent that the buyer’s market share(s) in the relevant market(s) downstream to contract product(s)/service(s) do not exceed 40%.

Communiqué No. 2002/2 lists certain so-called “hardcore restraints”, which exclude the entire vertical agreement from the application of the block exemption. It also lists certain other vertical restraints, which would not eliminate the benefits of the block exemption altogether, as long as the specific restraint can be severed from the rest of the agreement.

On condition that the vertical agreement benefits from the block exemption, the supplier can impose certain obligations which would be otherwise restrictive, such as (i) exclusive dealing, (ii) single branding, (iii) non-compete arrangements for up to five years, (iv) selective distribution, (v) ceiling resale prices.

In addition to Block Exemption Communiqué No. 2002/2 on Vertical Agreements, there are also many sector-specific and agreement-specific block exemptions. Further explanation on these exemption regimes is described under “Sector-Specific Exemptions”.