The commitment mechanism for violations under Article 4 and 6 of Law No. 4054 on the Protection of Competition (“Turkish Competition Law”) was embedded into Turkish legislation with the amendments introduced to the Turkish Competition Law on 24 June 2020. Following its introduction, many questions have been raised concerning details for the commitment mechanism's application, and secondary legislation has been eagerly awaited.
In response, on 16 March 2021 the Turkish Competition Authority (the “Authority”) published the “Communiqué No. 2021/2 on Commitments for Preliminary Investigations and Investigations on Anticompetitive Agreements, Concerted Practices, Decisions and Abuse of Dominant Position”, i.e., the Communiqué on Commitments, which entered into force on the same day as its publication.
Below we analyse the fundamental aspects of the Communiqué on Commitments.
When and how should the commitment requests be submitted?
The first step of the commitment application is to submit a written request for commitment to the Authority. Undertakings and associations of undertakings are required to submit their written commitment requests "within three months" from an investigation notice. This three-month requirement will not be applied to on-going investigations as of 16 March, 2021, the date the Communiqué on Commitments takes effect.
How will commitment negotiations take place?
The second step, commitment negotiations, can be carried out orally or in writing. Oral negotiations will be recorded in a written report. No further details regarding the commitment negotiations, such as their content, the number of meetings to be held or meeting duration, are defined in the Communiqué on Commitments.
The start of commitment negotiations may be delayed if the Turkish Competition Board (the “Board”) needs to carry out more detailed research. If the application is made during the preliminary research process, the Board may decide to postpone negotiations until the investigation process is completed.
What should be taken into consideration during the submission of the commitment text?
If an undertaking or an association of undertakings decides to submit a commitment as a result of commitment negotiations, they are required to submit the following documents to the Authority within the time period determined by the Board during the negotiations:
i. The commitment letter;
ii. A copy of the commitment letter redacted from trade secrets and confidential information; and
iii. A summary of the commitment letter.
The Competition Board will determine the statutory period for the submission of the commitment letter, depending on the stage of the examination carried out by the Authority and the scope of the commitment to be submitted.
What should be included in the commitment letter?
Undertakings or associations of undertakings are required to clearly and precisely present their commitments in the commitment letter. Accordingly, a submitted commitment letter should not contain alternative commitments.
Undertakings or associations of undertakings should clearly state the following matters within the letter to be submitted:
i. The competitive concern aimed to be resolved by the commitment;
ii. The content of the commitment;
iii. When the commitment will start to be fulfilled;
iv. For how long and in which way the commitment will be applied;
v. The statutory period to be complied with in the implementation of the commitment;
vi. The cases in which these periods may be extended;
vii. The impact of the commitment on the market;
viii. How to resolve the competitive concern;
ix. How compliance with the commitment can be monitored; and
x. Other matters deemed necessary.
What decisions may the Board take about the commitment text?
The decisions that the Board may take if it deems the submitted commitment sufficient are as follows:
i. Not to initiate an investigation by making the commitment binding on the relevant party;
ii. To end an on-going investigation by making the commitment binding on the relevant party; or
iii. To receive the opinions of third parties about the commitment.
The decisions that the Board may take if it deems the submitted commitment as insufficient are as follows:
i. Offer the parties a single opportunity to revise the commitment within the period to be determined by the Board; or
ii. To terminate the commitment process.
If the Board terminates the commitment process, the parties cannot request to submit another commitment.
Which undertakings cannot apply for commitments?
Undertakings or associations of undertakings will not be able to apply for commitment in the presence of certain actions, defined as hard-core restrictions, as follows:
i. Actions that directly or indirectly prevent, distort or restrict competition in a market for goods or services, or that has that as their object or effect or likely effect through:
- The exchange of competitive information between competitors, such as price determination; the exchange of the data of customers, suppliers, regions or trade channels; restriction of supply amounts or the imposition of quotas; bid rigging; future price, production or sales amount determination to be implemented; and
- Agreements and/or concerted practices for the determination of the fixed or minimum selling price of the buyer in the relationship between undertakings operating at different levels of the production or distribution chain (i.e., a vertical relationship), and the decisions and actions of associations of undertakings regarding these issues.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.