The sanctions that could be imposed for competition law violations are set forth under Article 16 of Law No. 4054 on the Protection of Competition (“Competition Law”). These sanctions are administrative in nature. The Turkish Competition Board’s (“Board”) Regulation on Fines to Apply in Restrictive Agreements, Concerted Practices and Decisions and Abuse of Dominant Position (“Fine Regulation”) lays down detailed rules on calculation methods, percentages and procedures on administrative monetary fines.
Principles and Rates
Companies that violate competition laws shall be (separately) subject to fines of up to 10% of their Turkish turnover generated in the financial year preceding the date of the fining decision (in case this is not calculable, the turnover generated in the financial year nearest to the date of the fining decision will be taken into account). For instance, the Board may render a decision in 2019 and conclude that Company A abused its dominant position. In that case, the Board may impose an administrative monetary fine on Company A amounting to 0-10% of Company A’s 2018 Turkish turnover. If the financial tables of 2018 are not ready yet, the Board may use Company A’s 2017 Turkish turnover. The current minimum fine is set as TL 26,028 and is revised each year.
Different Base Fine Rates for Different Violation Types
The Board calculates the base fine depending on the type of the violation. The Fine Regulation requires the Board to determine the base fine for cartels between 2 to 4% and for other violations between 0.5 to 3% of the infringing company’s turnover preceding the date of the decision.
The Board should take into consideration factors such as the level of fault and amount of possible damage in the relevant market, the market power of the investigated companies, duration and recurrence of the infringement, cooperation or driving role of the investigated companies in the infringement, financial power of the companies, recidivism, compliance with the commitments, etc., in determining the magnitude of the monetary fine.
Aggravating and Mitigating Factors
The Board may increase the base fine,
- by half to one fold, in case of (i) recidivism, (ii) maintaining the cartel after the initiation of the investigation;
- by half to one fold, in case the investigated companies do not meet their commitments made for the elimination of the competition problems;
- by up to half, if the investigated company does not provide assistance to the Turkish Competition Authority with the investigation;
- by up to one fourth, if the investigated company coerced other undertakings into the violation.
The Board may reduce the base fine at a rate of 1/4 to 3/5, in the cases including but not limited to the following:
- provision of assistance to the Turkish Competition Authority with the investigation beyond its legal obligations,
- public authorities’ encouragement for the infringing act,
- coercion by other investigated companies,
- the investigated company’s voluntary payment of damages to those harmed,
- the investigated company’s termination of other violations,
- the share of the activity field that the investigated company involved in a violation is very small within its turnover.
Fines to Be Imposed on Individuals
The Board may impose administrative monetary fines on individuals, to the extent they have determining effect on the violation. Per the Regulation, employees or members of the executive bodies of the companies or trade associations (or both) that had a determining effect on the creation of the violation may also be fined up to 5% of fine imposed on the company or trade association. There are decisions where the Board imposed administrative monetary fines on individuals (White Meat Cartel, 09-57/1393-362, 25.11.2009; SODAŞ, 12-24/711-199, 03.05.2012).