Ancillary restraints are restraints that are directly related to the merger or acquisition and necessary for the implementation of the transaction and for the complete achievement of the efficiencies expected from the merger or acquisition.
The concept of ancillary restraint is introduced in Article 13(5) of Communiqué No. 2010/4 Concerning the Mergers and Acquisitions Calling for the Authorization of the Competition Board (“Communiqué No. 2010/4”). Per Communiqué No. 2010/4, the Turkish Competition Board’s (“Board”) clearance decision also covers ancillary restraints. Ancillary restraints are further explained in the Guidelines on undertakings Concerned, Turnover and Ancillary Restraints in Mergers and Acquisitions (“Guidelines”). The Board has also several decisions that provide jurisprudential background/insight into ancillary restraints.
Before Communiqué No. 2010/4, the Board was assessing ancillary restraints in detail on a case-by-case basis. Currently, the parties are now primarily responsible for determining whether the ancillary restraints comply with competition law, and the Board’s decision covers ancillary restraints, even if it has not assessed them separately. It is fair to say that the Board attaches less importance to ancillary restraints and therefore the analysis of ancillary restraints is the parties’ responsibility.
The main criteria for the characterization of a restraint as ancillary are (i) direct relation and (ii) necessity. These are assessed on a case-by-case basis.
- Direct relation: Implementing restraints within the same scope or time period as the transaction is not sufficient; the restraints also have to demonstrate a close economic relation to the main transaction and facilitate a smooth transition to the new structure following the merger or acquisition.
- Necessity: The restraint has to be obligatory for the implementation of the merger or acquisition. In other words, the restraint is deemed necessary if its absence would lead to a significant increase in uncertainty and costs of the transaction. The restraint’s duration and scope will also be taken into consideration. In any case, the restraint entailing the least restrictive consequences on competition must be preferred among alternatives serving the same goal.
It is not possible to apply Article 4 (restrictive agreements) or Article 6 (abuse of dominant position) of the Law on the Protection of Competition No. 4054 (“Competition Law”) to ancillary restraints, to the extent that the provisions are appropriately defined in terms of subject matter, geographic scope and duration and therefore directly related and necessary to the concentration under the established ancillary restraints standards of the Board.