Article 4 of the Law No. 4054 on the Protection of Competition (the "Competition Law") prohibits all agreements between companies that have (or may have) as their object or effect the prevention, restriction or distortion of competition. Among the types of agreements covered above, the most frequently-tested are vertical agreements. Vertical restraints such as resale price maintenance (RPM), most-favored customer clauses, exclusive dealing arrangements, rebate schemes, non-compete obligations and reverse non-compete obligations have frequent enforcement track record in the history of Turkish competition law enforcement.
A vertical agreement is a term used in competition law to denote agreements between firms operating at different levels of the production/distribution chain (e.g. relations between manufacturers and their customers/distributors).
For instance, a manufacturer of consumer electronics might have a vertical agreement with a retailer under which the latter would sell and promote the former's products, potentially in return for lower prices. Such agreements could lead to markets being partitioned and/or to the creation and maintenance of territorial restrictions. Similar vertical restraints may fall within the Article 4 prohibition, unless covered by a block exemption or individual exemption.
Subject to the condition that they do not contain hardcore restrictions (as defined in the relevant block exemption regulations), a number of vertical agreements may benefit from the protective cloak of block exemptions, thus avoiding the prohibition of Article 4. Below is a list of the block exemption regulations that may be applicable to, inter alia, vertical agreements. Depending on specific circumstances surrounding each individual case, some of the following regulations may or may not apply to vertical agreements:
- Block Exemption Communiqué No. 2002/2 on Vertical Agreements;
- Block Exemption Communiqué No. 2003/2 on R&D Agreements;
- Block Exemption Communiqué No. 2008/3 for the Insurance Sector;
- Block Exemption Communiqué No. 2008/2 on Technology Transfer Agreements;
- Block Exemption Communiqué No. 2013/2 on Specialization Agreements.
- Block Exemption Communiqué No. 2017/3 on Vertical Agreements in the Motor Vehicles Sector;..
Even in cases where a block exemption does not apply, a vertical agreement may still benefit from an individual exemption. The parties are authorized to perform a self-assessment to see if the restrictive vertical agreement fulfills the conditions of individual exemption. Similar to the EC competition law regime, conditions for an individual exemption are as follows: (i) The agreement must contribute to improving the production or distribution of goods or to promoting technical or economic progress, (ii) it must allow consumers a fair share of the resulting benefit, (iii) it should not impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives and (iv) it should not afford the parties the possibility of eliminating competition in respect of a substantial part of the products in question. This is not an alternative test and all conditions must be met for an individual exemption.