Per the Guidelines on Remedies that are Acceptable by the Turkish Competition Authority in Merger/Acquisition Transactions (“Guidelines”), parties to a merger or an acquisition that results in competition law concerns can submit proposals for possible remedies to eliminate the competition law concerns. The parties may propose remedies (i) together with the notification, (ii) during the preliminary review (Phase I) or (iii) during the full-fledged investigation (Phase II). In any case, a signed version of the remedies petition containing detailed information on their context and a separate summary should be submitted to the Turkish Competition Board (“Board”). Additionally, the Guidelines provide a generally-applicable all-inclusive form that lists the necessary information and documents to be submitted in relation to the remedies.

The Board will take the proposed remedies into account while evaluating the transaction. However, if the Board concludes that the transaction does not violate Article 7 of Law on the Protection of Competition No. 4054 (“Competition Law”), it will authorize the transaction unconditionally without considering the remedies.

Below is a short analysis of the procedure of offering remedies in Phase I and Phase II.

1. Phase I – Preliminary Review

A proposed remedy should be clearly related to an easily identifiable competition concern. The parties have a positive duty to express both the concern and the remedy, together with how they are linked. Due to the time constraints at the Phase I stage, it is important that the remedies petition is submitted in a timely manner. Additionally, the Board may deem it necessary to consult third parties during its assessment on the proposed remedies.

If the Board concludes that the proposed remedies are sufficient to cure the competition law concerns, it clears the transaction conditionally. In the event that the proposed remedies are not considered sufficient to remove competitive concerns, the Board will initiate a Phase II investigation.

2. Phase II – Investigation

Per Article 10 of the Competition Law, mergers and acquisitions under a Phase II investigation are suspended until the Board’s final decision. The Board will carry out in-depth technical inquiries relating to the proposed remedies, to determine whether they would eliminate the competition, by assessing whether they would (i) create or strengthen a dominant position and (ii) restrain competition in relevant market.

If the Board decides that the merger or acquisition amended by remedies will not violate competition law, it will clear the transaction conditionally. On the other hand, if the remedies are not sufficient to solve the competition law concerns, the Board would block the transaction.

Not Performing the Proposed Remedies

If the Board finds the proposed remedies sufficient, the parties are expected to perform their liabilities regarding the remedies. Parties’ liabilities are divided in two legal grounds: (i) requirements of the remedies and (ii) obligations of the parties.

Non-compliance with requirements and non-compliance with obligations each carry different legal consequences. Therefore, the concepts of requirement and obligation should not be confused. For instance, divestiture of a business is a requirement; whereas the practical stages related to divestiture (i.e. appointment of a divestiture expert and submitting necessary reports to the Board) are obligations.

In case of non-compliance with a requirement, the authorization (i.e. clearance) will automatically be invalid and the authorization decision will be void. Under these circumstances, the Board would apply Article 16 of the Competition Law, which regulates the imposition of administrative monetary fines (0.1% of the company’s latest turnover). On the other hand, in the event of non-compliance with obligations, the parties may be subject to administrative fines set forth in Article 17 of the Competition Law, which concerns periodic administrative monetary fines. In such a case, parties would be subject to periodic administrative monetary fines (0.05 % of the company’s latest turnover/per day) for each day they do not perform their obligation.