As most competition authorities around the globe, Turkish Competition Board ('Board") has the power to request all kinds of information it deems necessary from all public institutions and organizations, undertakings and associations of undertakings while performing the duties assigned to it by the Law No. 4054 on Protection of Competition ('Law No. 4054").1 In return, those concerned are required to provide the requested information within the period to be determined by the Board. Otherwise, undertakings face significant administrative monetary fines pursuant to Articles 162 and 173 of the Law No. 4054 for violation of this obligation.
Requests for information are an indispensable source for the Board while conducting preliminary inquiries, investigations, examinations or final examinations. In that regard, there is no doubt – in principle- that the parties to an investigation and/or examination, notifying a merger or acquisition, requesting a negative clearance or exemption are obliged to provide the data requested by the Board within this context. Although the Board is authorized as per the Law No. 4054 to request information from "all" undertakings and thus, its powers do not only extent to parties that are directly involved in the relevant transaction, but certain recent cases also revealed that the Board may face reluctance or resistance in the information requests directed to undertakings which are not directly involved in the procedure that is overseen by the Board.
As another type of request for information, competition authorities resort to information from undertakings within the scope of sector studies that are being increasingly conducted to have a better understanding of certain markets and the competition problems in these markets. It is important to note that the Board has not yet imposed an administrative monetary fine to an undertaking for not responding to a request for information within the scope of a sector study. In a very recent decision4, the Board requested information from 33 retailers including A101, a retail market chain of fast-moving consumer goods, within the scope of the Board's FMCG sector study. According to the reasoning of the decision, A101 failed to meet several deadlines set out by the Board for the provision of the requested data, and that is -in principle- an infringement of the obligation to provide the data in due course. However, the Board decided -by majority of its votes- not to impose an administrative monetary fine on A101 as it eventually sent the requested data. One member of the Board disagreed with that ruling and stated in his dissenting opinion that A101 did infringe the law as at the end of the day, as it failed to provide the information in due course, despite of being provided with several opportunities priorly.
While there is no distinction between voluntary and compulsory requests for information in some countries including Turkey; OECD Directorate for Financial and Enterprise Affairs Competition Committee's study on limits and effectiveness of requests for information provides that requests for information may be voluntary (simple) or compulsory (sanctioned), which enables legal certainty for sanctions.5 A 2008 OECD Policy Roundtable further sheds light on other countries' approach on sector/market studies.6 The study reveals that there are differences in the use of compulsive powers in requests for information from non-party undertakings. The limited principles published by authorities such as Competition and Markets Authority of the United Kingdom and European Union Commission on this subject emphasize the principle of proportionality and cooperation, whereas many countries seem to follow a more flexible stance.
In fact, the text of the Law No. 4054 does not provide a distinction between compulsory or voluntary requests for information, it can be said that sector studies are also within the scope of Article 16 and 17 regulating the Board's authority to impose administrative monetary fines in cases of infringement of the obligation to provide the information/documents requested. Accordingly, an undertaking facing a request of information within the scope of a sector study, as well as an investigation or examination concerning other undertakings should duly respond to such request in order to eliminate the possibility of a monetary fine.
1. Request for Information
Article 14- In carrying out the duties assigned to it by this Law, the Board may request any information it deems necessary from all public institutions and organizations, undertakings and associations of undertakings.
These authorities, officials of undertakings and associations of undertakings are obliged to provide the requested information within the period to be determined by the Board.
2. Administrative Fine
Article 16- In those cases where
- c) In implementation of Articles 14 and 15 of the Act, incomplete, false or misleading information or document is provided, or information or document is not provided within the determined duration or at all,
the Board shall impose on natural and legal persons having the nature of an undertaking and on associations of undertakings or members of such associations, an administrative fine by one in thousand of annual gross revenues of undertakings and associations of undertakings or members of such associations which generate by the end of the financial year preceding the decision, or which generate by the end of the financial year closest to the date of the decision if it would not be possible to calculate it and which would be determined by the Board for those mentioned in sub-paragraphs (a), (b) and (c), and by five in thousand of their gross revenues to be calculated in the same manner for those mentioned in sub-paragraph (d).
3. Proportional Administrative Fine
Article 17- Without prejudice to the penalties mentioned in Article 16, paragraph one, the Board shall, for each day, impose on undertakings and associations of undertakings an administrative fine by five in ten thousand of annual gross revenues of the relevant undertakings and associations of undertakings and/or members of such associations generated by the end of the financial year preceding the decision, or generated by the end of the financial year closest to the date of the decision if it would not be possible to calculate it and which would be determined by the Board in the following cases:
- c) In implementation of Articles 14 and 15 of the Act, information or document requested is not provided within the duration determined.
Pursuant to paragraph one, sub-paragraphs (a) and (c), administrative fines can be imposed as of the expiration of the duration determined for complying with the obligations in the decisions mentioned in these sub-paragraphs.
4. The Board's decision dated 22.10.2020 with numbered 20-47/638-280.
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.