For a joint venture to be notified to the Turkish Competition Authority as being a concentration within the meaning of competition law, the joint venture must fulfil a set of requirements: (i) it must be under the joint control of its parent companies and (ii) it must function on the market on a lasting basis and (iii) it must be autonomous/financially independent from its parents. If any of these elements is not present, joint venture becomes a non-full-function joint venture and therefore, considered as an agreement leading to co-operation (co-operative agreement).
In case the joint venture falls outside of the full-function scope, its competitive risks will still be assessed as they can be a means for the parent companies to coordinate their behavior on the market, either between themselves, or with the joint venture itself. A joint venture is not inherently anti-competitive, but it may lead to certain anti-competitive impacts as articulated under Article 4 of Law No. 4054 on the Protection of Competition (the “Competition Law”) which concerns restrictive agreements/decisions/concerted practices.
In its competitive assessment, the Turkish Competition Board (the “Board”) analyzes whether the parent companies are not, in fact, through their joint venture, setting up mechanisms that have the same object or effect as restrictive agreements to fix prices or allocate markets and clients. For that purpose the Board considers the position of the parties to the cooperative agreement on the market affected by the co-operation, relying on the assumption that if the parties have low combined market share, the co-operative agreement is unlikely to restrict competition within the meaning of Article 4 of the Competition Law. However, the Board also states that a general threshold for market power, which is sufficient to cause restrictive effects on competition, cannot be determined. Therefore, it evaluates the relevant market share threshold depending on the specific type of co-operative agreement on a case-by-case basis.
Whenever the use of the sole quantitative market share criterion indicates a fairly reduced probability of relevant distortion of competition, due to the absence of significant market power of the parties involved in a given joint venture, the complementary analysis of the joint venture may be relatively simplified and less demanding. In that case, a favorable assumption may in principle be established, almost equivalent to a presumption of non-restriction of competition arising from the joint venture which will only be rebuttable through conclusive evidence. Otherwise, in the absence of such evidence, the presumption arises from the above mentioned complementary analysis.