Answer ... A notification is deemed filed once it has been received in complete form by the Competition Authority. If the information requested in the notification form is incorrect or incomplete, the notification is deemed filed on the date on which such information is completed or corrected.
The Competition Board, upon its preliminary review (ie, Phase I), will decide either to approve the transaction or to investigate it further (ie, Phase II).
The Competition Board will notify the parties of the outcome within 30 days of submission of a complete filing. There is an implied approval mechanism whereby tacit approval is assumed if the Competition Board has not responded within 30 calendar days of submission of a complete filing. In practice, the Competition Board almost always responds within this period by either sending a written request for information or – very rarely – by issuing a final decision.
The Competition Authority can send written information requests to the parties, any other party relating to the transaction and third parties such as competitors, customers and suppliers.
Any written request by the Competition Authority for missing information will cut the review period, which will then restart from day one as of the date on which the responses are received.
If a notification leads to an investigation (Phase II), a full investigation will be launched. This takes about six months, which may be extended for an additional six months if necessary.
Answer ... Aside from close follow-up with the case handlers reviewing the transaction, the parties have no available means of speeding up the review process. The Competition Authority may extend the timeline by sending requests for information; however, there is no provision within Law 4054 for the Competition Authority to suspend the review period.
Answer ... Neither Law 4054 nor Communiqué 2010/4 foresees a ‘fast-track’ or simplified review procedure to speed up the clearance process.
Answer ... The Competition Authority is empowered to contact certain regulatory authorities around the world, including the European Commission, to exchange information. In this respect, Article 43 of Decision 1/95 of the EC-Turkey Association Council authorises the Competition Authority to notify and request the European Commission (Directorate-General of Competition) to apply relevant measures if the Competition Board believes that transactions realised in the EU territory will adversely affect competition in Turkey. This provision grants reciprocal rights and obligations to the parties, and the European Commission thus has the Competition Authority to request the Competition Board to apply relevant measures to restore competition in relevant markets.
Moreover, the research department of the Competition Authority periodically consults with relevant domestic and foreign institutions and organisations. The European Commission has been reluctant to share any evidence or arguments with the Competition Authority in a few cases where the Competition Authority explicitly requested them.
The Competition Authority also cooperates internationally with several antitrust authorities in other jurisdictions and develops training programmes for cooperation purposes. In recent years, programmes have been organised for:
- board members of the Pakistani Competition Authority;
- top managers of the National Agency of the Kyrgyz Republic for Anti-monopoly Policy and Development of Competition;
- members of the Mongolian Agency for Fair Competition and Consumer Protection; and
- board members of the Competition Authority of the Turkish Republic of Northern Cyprus.
Similar programmes have also been developed in cooperation with:
- the Azerbaijan State Service for Anti-monopoly Policy and Consumer Rights Protection;
- the State Committee of the Republic of Uzbekistan on De-monopolisation; and
- the Ukrainian Anti-Monopoly Committee.
These programmes were developed under bilateral cooperation agreements.
Answer ... The Competition Authority may send written information requests to the parties and any other party relating to the transaction, or may conduct comprehensive market research by requesting information from third parties such as competitors, customers and suppliers within the specified legal timeframe, with possible extensions. The provision of false or misleading information could result in monetary fines pursuant to Article 16 of Law 4054.
Law 4054 provides extensive powers to the Competition Authority in relation to dawn raids. Judicial authorisation will be obtained by the Competition Board only if the target undertaking refuses to allow the dawn raid, which will also result in a fine. While the Competition Law states that employees may be compelled to provide oral testimony, case handlers do allow a delay in responding as long as there is quick written follow-up correspondence. Therefore, in practice, employees can avoid responding on issues that are uncertain to them, provided that a written response is submitted within a mutually agreed timeframe. Computer records are fully examined by the Competition Authority, including deleted items.
Officials conducting on-site investigations must possess a deed of authorisation from the Competition Board. The deed of authorisation must specify the subject matter and purpose of the investigation. Officials are not entitled to exercise their investigative powers (eg, copying records or recording statements by company staff) in relation to matters that do not fall within the scope of the investigation, as set out in the deed of authorisation.
Only Competition Authority staff may participate in on-site inspections. They have no duty to wait for a lawyer to arrive. That said, they may sometimes agree to wait for a short while for a lawyer to arrive, but may impose certain conditions in this regard (eg, that files be sealed or email communications disrupted).
Answer ... Pursuant to Article 15 of Communiqué 2010/4, the Competition Board may request information from third parties, including customers, competitors and suppliers of the parties, and other persons related to the merger or acquisition. According to Article 11(2) of Communiqué 2010/4, if the Competition Authority is required by law to request another public authority’s opinion, this will cut the review period, which will restart anew from day one once the opinion has been received. Third parties, including customers and competitors of the parties, and other persons related to the merger or acquisition may participate in a hearing held by the Competition Board during the investigation, provided that they prove their legitimate interest.
Although this is not common practice, the Competition Authority may even invite the views of third parties on a transaction that clearly raises no competition issues. There is no specific provision requiring that market testing be carried out in the merger control filing process.
Answer ... There is no normative regulation allowing or disallowing carve-out arrangements. However, carve-out arrangements have previously been rejected by the Competition Board (eg, Total SA, 06-92/1186-355, 20 December 2006; and CVR Inc Inco Limited, 07-11/71-23, 7 February 2007), which has argued that closing is in itself sufficient for the imposition of a suspension violation fine, and that further analysis of whether a change in control actually took effect in Turkey is unwarranted. The wording of the Competition Board’s reasoned decisions does not analyse the merits of carve-out arrangements, but rather takes the position that the notion of a carve-out is unconvincing. Therefore, measures such as carve-outs and hold separate agreements will not circumvent the filing requirement and cannot be recommended as safe early closing mechanisms recognised by the Competition Board. Finally, the Turkish merger control rules do not provide for the possibility of derogation from the suspension obligation.
However, none of the cases cited in this regard points to the establishment of de facto precedent concerning a Competition Board -accepted derogation from the suspension obligation, due to the exceptional characteristics of the cited cases.
Answer ... The substantive test is a typical dominance test. Under Article 7 of Law 4054 and Article 13 of Communiqué 2010/4, mergers and acquisitions which do not create or strengthen a dominant position and do not significantly impede effective competition in a relevant product market within the whole or part of Turkey will be cleared by the Competition Board.
Article 3 of the Competition Law defines a ‘dominant position’ as “any position enjoyed in a certain market by one or more undertakings by virtue of which, those undertakings have the power to act independently from their competitors and purchasers in determining economic parameters such as the amount of production, distribution, price and supply”. However, the substantive test is a two-prong test and a merger or acquisition can be blocked only when the concentration not only creates or strengthens a dominant position, but also significantly impedes competition in the whole territory of Turkey or in a substantial part thereof.
The test does not vary by sector.
Answer ... In addition to the dominance test explained in question 4.8, the Competition Authority also examines whether a joint venture would result in coordination within a given market. Article 13/III of Communiqué 2010/4 provides that the Competition Board will carry out an individual exemption review of notified joint ventures that emerge as an independent economic unit on a lasting basis, but that have as their object or effect the restriction of competition between the parties or between the parties and the joint venture itself. The wording of the standard notification form also allows for such a review.
Answer ... Unilateral effects are the predominant criterion in the Competition Authority’s assessment of mergers and acquisitions in Turkey. That said, in a couple of exceptional recent cases the Competition Board discussed the coordinated effects under a ‘joint dominance test’ and rejected the transactions on those grounds (eg, Ladik, 05-86/1188-340, 20 December 2005). These cases related to the sale of certain cement factories by the Savings Deposit Insurance Fund. The Competition Board evaluated the coordinated effects of the mergers under a joint dominance test and blocked the transactions on the grounds that the transactions would lead to joint dominance in the relevant market. The Competition Board took note of factors such as:
- structural links between the undertakings in the market;
- past coordinative behaviour;
- entry barriers;
- transparency of the market; and
- the structure of demand.
It concluded that certain factory sales would result in the establishment of joint dominance by certain players in the market, thus significantly lessening competition. Regarding one such decision, which was appealed before the Council of State, the Council of State mentioned in its ruling, among other things, that Law 4054 prohibits only single dominance and therefore stayed execution of the decision by the Competition Board, which was based on collective dominance.
No transaction has yet been blocked on the grounds of vertical foreclosure or conglomerate effects. However, a few decisions discuss those theories of harm. For example, one recent decision in this respect was the Competition Board’s Luxottica/Essilor decision (18-36/585-286, 1 October 2018). The Competition Board examined the conglomerate effects that the transaction might have with respect to the lens and optical frames markets and possible bundling applications.
Although no transaction has yet been blocked on the grounds of vertical foreclosure or conglomerate effects, in Toyota/Vive (17-12/143-63, 6 April 2017), the Competition Board outlined the main factors that should be considered in evaluating conglomerate concentrations. The decision is significant as the first time the Competition Board has focused on conglomerate effects, even though conglomerate effects were an important issue in the European Union in 2017 (eg, Qualcomm/NXP and Bayer/Monsanto). The transaction concerned Toyota’s acquisition of sole control over Vive BV. While the parties to the transaction submitted that no market would be affected, since their activities did not horizontally or vertically overlap in Turkey, the Competition Board decided that the transaction would lead to a conglomerate concentration, given that the parties’ activities were complementary and substitutive. Accordingly, the Competition Board asserted that competitors could be foreclosed from the market through unilateral conduct in the form of tying, bundling and other exclusionary behaviour; and that in addition to the parties’ market shares, their incentive and ability to foreclose the market should be considered in assessing the existence of conglomerate effects. The Competition Board ultimately decided that the market shares of the parties and the structures of the two relevant product markets would not give the parties the necessary market power and ability to foreclose the market, and unconditionally approved the transaction.
As the scope of Law 4054 is limited to the assessment of competition in a given market, the Competition Board’s assessment is limited to this and does not take account of labour or social issues.