Comparative Guides

Welcome to Mondaq Comparative Guides - your comparative global Q&A guide.

Our Comparative Guides provide an overview of some of the key points of law and practice and allow you to compare regulatory environments and laws across multiple jurisdictions.

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4. Results: Answers
Cartels
2.
Definitions and scope of application
2.1
How is a ‘cartel’ defined in the cartel legislation?
Turkey

Answer ... Article 4 of Law 4054 prohibits all forms of ‘restrictive agreement’, including any form of cartel. In contrast to the Treaty on the Functioning of the European Union (TFEU), Article 4 of Law 4054 does not refer to ‘appreciable effect’ or ‘substantial part of a market’, and thus includes no de minimis exception.

In line with Article 101(1) TFEU, Article 4 includes price-fixing, market allocation and refusal to deal agreements as examples of restrictive agreements that have consistently been deemed to be anti-competitive per se.

Furthermore, cartels are explicitly defined by the secondary legislation of the Competition Authority, namely the Regulation on Fines to Apply in Cases of Agreements, Concerted Practices and Decisions Limiting Competition and Abuse of Dominant Position and the Regulation on Active Cooperation for Detecting Cartels. According to these regulations, “agreements restricting competition and/or concerted practices between competitors for fixing prices; allocation of customers, providers, territories or trade channels; restricting the amount of supply or imposing quotas, and bid rigging” are prohibited as cartel activity (see Article 3 of the Regulation on Fines and Article 3 of the Regulation on Active Cooperation). Recital 5 of the Guidelines on Explanation of the Regulation on Active Cooperation for Discovery of Cartels, published by the Competition Board in April 2013, further describes cartels as “the most serious competition infringements”.

The prohibition on restrictive agreements and practices does not apply to agreements that benefit from a block exemption or an individual exemption (or both) issued by the board. The applicable exemption rules parallel those applicable in the European Union. That said, given that cartels fail to fulfil the conditions for exemption under Article 5(3) and relevant block exemption regulations, this type of conduct is unlikely to benefit from an exemption from Article 4.

For more information about this answer please contact: Gönenç Gürkaynak from ELIG Gürkaynak Attorneys-at-Law
2.2
What specific offences are defined in the cartel legislation?
Turkey

Answer ... As explained in question 2.1, according to the Regulation on Fines to Apply in Cases of Agreements, Concerted Practices and Decisions Limiting Competition and Abuse of Dominant Position and the Regulation on Active Cooperation for Detecting Cartels, “agreements restricting competition and/or concerted practices between competitors for fixing prices; allocation of customers, providers, territories or trade channels; restricting the amount of supply or imposing quotas, and bid rigging” are considered as cartels (see Article 3 of the Regulation of Fines and Article 3 of the Regulation on Active Cooperation).

For more information about this answer please contact: Gönenç Gürkaynak from ELIG Gürkaynak Attorneys-at-Law
2.3
Is liability under the cartel legislation civil, criminal or both?
Turkey

Answer ... The Turkish cartel legislation is administrative and civil in nature, not criminal. That said, certain antitrust violations, such as bid rigging in public tenders and illegal price manipulation, may also be criminally prosecutable, depending on the circumstances.

For more information about this answer please contact: Gönenç Gürkaynak from ELIG Gürkaynak Attorneys-at-Law
2.4
Can both individuals and companies be prosecuted under the cartel legislation?
Turkey

Answer ... Law 4054 applies to ‘undertakings’ and ‘associations of undertakings’. An ‘undertaking’ is defined as a single integrated economic unit capable of acting independently in the market to produce, market or sell goods and services. Law 4054 therefore applies to individuals and corporations alike, if and to the extent that they act as an undertaking within the meaning of Law 4054.

Additionally, pursuant to Article 16 of Law 14 and Article 8 of the Regulation on Fines to Apply in Cases of Agreements, Concerted Practices and Decisions Limiting Competition, employees or members of executive bodies of undertakings or associations of undertakings that had a determining effect on a cartel may also be fined between 3% and 5% of the fine imposed on the relevant undertaking or association of undertakings.

For more information about this answer please contact: Gönenç Gürkaynak from ELIG Gürkaynak Attorneys-at-Law
2.5
Can foreign companies be prosecuted under the cartel legislation?
Turkey

Answer ... Turkey is an ‘effect theory’ jurisdiction. According to Article 2 of Law 4054, the Competition Board has jurisdiction over any cartel that affects Turkish markets, regardless of the nationality of the cartel members, where the cartel activity has taken place or whether the members have a subsidiary in Turkey. The board has refrained from declining jurisdiction over non-Turkish cartels or cartel members in the past, as long as there has been an effect on the Turkish markets (see The Suppliers of Rail Freight Forwarding Services for Block Trains and Cargo Train Services, 15-44/740-267, 16 December 2015; Güneº Ekspres/Condor, 11-54/1431-507, 27 October 2011; Imported Coal, 10-57/1141-430, 2 September 2010). However, the board is yet to enforce monetary or other sanctions against firms located outside Turkey without any presence in Turkey, mostly due to enforcement challenges (eg, difficulties in formal service or failure to identify a tax number).

For more information about this answer please contact: Gönenç Gürkaynak from ELIG Gürkaynak Attorneys-at-Law
2.6
Does the cartel legislation have extraterritorial reach?
Turkey

Answer ... As explained in question 2.5, Article 2 of Law 4054 captures all restrictive agreements, decisions, transactions and practices to the extent they affect a Turkish market, regardless of where the conduct takes place. That said, the specific circumstances surrounding indirect sales are not tried under Turkish cartel rules. Article 2 of Law 4054 would at least support an argument that the Turkish cartel regime does not extend to indirect sales because the cartel activity that takes place outside of Turkey does not in and of itself produce effects in Turkey.

Additionally, it is fair to say that export cartels do not fall within the scope of jurisdiction of the Competition Authority as per Article 2 of Law 4054. In Poultry Meat Producers (09-57/1393-362, 25 November 2009), the authority launched an investigation into allegations that included, among other things, an export cartel. The board found that export cartels are not sanctioned as long as they do not affect the markets of the host country. Although some other decisions (Paper Recycling, 13-42/538-238, 8 July 2013) suggest that the authority might sometimes be inclined to claim jurisdiction over export cartels, it is fair to assume that an export cartel would fall outside of the authority’s jurisdiction if and to the extent that it does not produce an impact on Turkish markets.

For more information about this answer please contact: Gönenç Gürkaynak from ELIG Gürkaynak Attorneys-at-Law
2.7
What is the statute of limitations to prosecute cartel offences in your jurisdiction?
Turkey

Answer ... The Competition Board can impose administrative monetary fines on a cartel within eight years of the date of the infringement. If cartel infringement is ongoing, this eight-year period is counted from the date on which the infringement ceases or is repeated. The eight-year limitation period is suspended where the board takes any action to investigate a claimed cartel infringement. In private litigation, the general provisions of the Turkish Code of Obligations are applicable with regard to limitation periods. Accordingly, a damages claim against a cartel can be brought before a court within 10 years of the event which gave rise to the damage to the plaintiff. Prosecution of criminal offences (eg, bid-rigging activity and illegal price manipulation) is subject to the criminal statutes of limitation, which may vary depending on the severity of the sentence that may be imposed.

For more information about this answer please contact: Gönenç Gürkaynak from ELIG Gürkaynak Attorneys-at-Law