Comparative Guides

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4. Results: Answers
Cartels
6.
Penalties and sanctions
6.1
What penalties may be imposed in criminal proceedings on companies? What penalties may be imposed on individuals?
Turkey

Answer ... As explained in question 2.3, the sanctions that may be imposed under Law 4054 are administrative in nature. Therefore, Law 4054 leads to the imposition of administrative fines (and civil liability), but not criminal sanctions. That said, there have been cases where the matter had to be referred to a public prosecutor after the competition law investigation was complete. Bid rigging may be prosecuted under Sections 235 and following of the Turkish Criminal Code if it relates to public tenders. Illegal price manipulation (ie, manipulation through disinformation or other fraudulent means) can also be punished by up to two years’ imprisonment and a civil monetary fine under Section 237 of the Turkish Criminal Code.

Law 4054 applies to ‘undertakings’ and ‘associations of undertakings’. An ‘undertaking’ is defined as a single integrated economic unit that is 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 they act as an undertaking.

The sanctions specified below may apply to individuals if they engage in business activities as an undertaking. Similarly, sanctions for cartel activity may also apply to individuals acting as the employees or board members/executive committee members of the infringing entities, if such individuals had a determining effect on the violation. Apart from these, there are no sanctions specifically for individuals.

For cartels, the board may impose a fine of up to 10% of the relevant company’s Turkish turnover generated in the financial year preceding the date of the fining decision (or, if this is not available, the turnover generated in the financial year closest to the date of the fining decision). Employees and/or managers of an undertaking/association of undertakings who had a determining effect on the violation can also be fined up to 5% of the fine imposed upon the undertaking/association of undertakings.

For more information about this answer please contact: Gönenç Gürkaynak from ELIG Gürkaynak Attorneys-at-Law
6.2
What penalties may be imposed in civil proceedings on companies? What penalties may be imposed on individuals?
Turkey

Answer ... The most distinctive feature of the Turkish competition law regime is that it provides for lawsuits for treble damages. In this way, administrative enforcement is supplemented by private lawsuits. Articles 57 and following of Law 4054 entitle any party that is injured in its business or property by reason of anything forbidden in the antitrust laws to sue the violators for three times the damages plus litigation costs and attorneys’ fees. If individuals engage in business activities as an undertaking or are held responsible due to their determining effect on the violation, a lawsuit for treble damages can be brought against them.

For more information about this answer please contact: Gönenç Gürkaynak from ELIG Gürkaynak Attorneys-at-Law
6.3
How are penalties in cartel cases determined? In deciding on the applicable penalties, will the enforcement authorities consider penalties imposed in other jurisdictions?
Turkey

Answer ... With reference to the Law on Minor Offences, Article 17 of Law 4054 requires the Competition Board to consider the following factors when determining penalties:

  • the level of fault and the extent of possible damage in the relevant market;
  • the market power of the undertaking(s) within the relevant market;
  • the duration and recurrence of the infringement;
  • the cooperation or driving role of the undertaking(s) in the infringement;
  • the financial power of the undertaking(s); and
  • compliance with any commitments.

The Regulation on Fines to Apply in Cases of Agreements, Concerted Practices and Decisions Limiting Competition and Abuse of Dominant Position sets out the methodology to calculate fines for anti-competitive conduct. According to the regulation, for cartels the basic fine will be between 2% and 4% of the company’s turnover in the financial year preceding the date of the fining decision (or, if this is not available, the turnover generated in the financial year closest to the date of the fining decision); aggravating and mitigating factors are then factored in. The regulation also applies to executives or employees who have had a determining effect on the violation and provides for certain reductions in their favour.

In addition to monetary sanctions, the board is authorised to take all necessary measures to:

  • terminate the restrictive agreement;
  • remove all de facto and legal consequences of every action that has been taken unlawfully; and
  • take all other necessary measures in order to restore the same level of competition and status as existed before the infringement.

Additionally, Law 4054 authorises the board to take interim measures until the final resolution on the matter if there is a possibility of serious and irreparable damage. Such a restrictive agreement is void and unenforceable, with all its legal consequences.

The board does not take into account penalties imposed in other jurisdictions, as well as overlapping liability for damages in other jurisdictions.

For more information about this answer please contact: Gönenç Gürkaynak from ELIG Gürkaynak Attorneys-at-Law
6.4
Can a defendant company pay the legal costs incurred by and/or penalties imposed on its employees?
Turkey

Answer ... There is no statutory law which prohibits a defendant company from paying the legal costs incurred by and/or penalties imposed on its employees. However, legal compensation of the employer will not result in the transfer of the legal liability for the costs incurred or fines imposed.

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