The Turkish Competition Board (“Board”) adopts the “Dominance Test” as the substantive test upon which it examines mergers and acquisitions. Per the Dominance Test, mergers and acquisitions which create or strengthen a dominant position and significantly impede effective competition in a relevant product market within the whole or part of Turkey would be blocked. The wording of the Dominance Test suggests that it is a two-prong test. The first prong is to determine whether the merger/acquisition would create or strengthen a dominant position in the relevant market.

During the examination of the first prong, the Board conducts an ex ante analysis of the company’s possible market position post-transaction. As the first step, the Board defines the relevant market. After the definition of the relevant market, it proceeds with the analysis as to whether the transaction would create or strengthen a dominant position in the relevant market. The Guidelines on Evaluation of Abusive Exclusionary Conducts by Dominant Undertakings (“Exclusionary Conduct Guidelines”) sets a non-exhaustive list for the items the Board would review at its dominant position examination. These are (i) the merged company’s market shares, (ii) market structure, (iii) barriers to entry, (iv) competitors’ market position and (v) buyer power.

The Guidelines on Horizontal Mergers (“Horizontal Merger Guidelines”) provide guidance on the market share and concentration levels which would be deemed risky. Per the Horizontal Merger Guidelines,

  • Aggregated market shares above 50% may be an indicator of dominance.
  • Aggregated market shares below 20% are most likely to not warrant an in-depth analysis.
  • In case of an HHI index below 1000 post-transaction, likelihood of competition law concerns is very low.
  • If the resulting HHI index is between 1000 and 2000 where delta is below 250, or, HHI index is above 2000 but delta is below 150, likelihood of competition law concerns is very low.

On a separate note, despite the High State Court’s approach that Article 7 refers only to single dominance, not to collective dominance, Horizontal Merger Guidelines include collective dominance within the scope of Article 7. Therefore, it seems fair to say that the Board is expected to find that a transaction which creates or strengthens a collective dominance in the relevant market would meet the first prong.