This article outlines key guidelines for undertakings to effectively manage on-site inspections by the Turkish Competition Authority under Law No. 4054. It emphasizes the importance of legal preparedness, internal training, cooperation with inspectors, confidentiality, and document tracking. It also highlights critical mistakes to avoid, such as deleting data, sharing unrequested documents, misusing confidentiality, ignoring instructions, or leaving inspectors unattended. Proper preparation and legal support are essential to reduce risks and ensure compliance.
Pursuant to Article 15 of the Law No. 4054 on the Protection of Competition ("Law"), Turkish Competition Board ("Board") may conduct on-site inspection and audit activities by visiting undertakings through its experts when deemed necessary in the performance of its duties. In accordance with the relevant article, experts may examine and take copies of all physical and electronic information and documents of undertakings. Undertakings are obliged to provide the information and documents requested within the scope of Article 15 and must not to obstruct or complicate the on-site inspection.
Pursuant to Article 16 of the Law, in the event that the requested information and documents are provided in an incomplete, false or misleading manner, or not provided at all, an administrative fine by one in thousands of annual gross revenues of undertakings will be imposed. In the event that the on-site inspection is hindered or complicated, an administrative fine by five in thousands of their gross revenues is imposed. Furthermore, pursuant to Article 17 of the Law, if incomplete information and documents are not completed within the specified period or if the inspection is obstructed, an additional fine will be imposed for these acts.
The recent approach of the Turkish Competition Authority ("TCA") regarding on-site inspections is alarming for undertakings, and effective management of these processes is becoming increasingly important. When on-site inspections are evaluated both in Türkiye and worldwide, it is observed that the sensitivity of and the effective conduct of these processes are of great importance. Accordingly, the attitudes to be adopted and avoided in order to manage the process effectively should be determined with care.
1. What to Do in an On-Site Inspection
Obtain Legal Support:
On-site inspection is a sudden and dominant process. Therefore, obtaining legal support both during and before the inspection is of great importance. Creating a compliance program that allows the company to audit itself in terms of competition law with the legal support to be obtained, and identifying and eliminating violations, if any, will prevent a possible violation before the inspection. In addition, creating a strategic review plan that sets out the procedure to be followed in the event of an on-site inspection will keep the company ready for the inspection. For example, planning in advance how and where to meet the experts, and notifying the relevant company officials or attorneys when they arrive, will ensure that the company can act quickly and in a planned manner and that the process is carried out more smoothly.
Organize In-House Trainings:
Companies should train their employees on how to carry out on-site inspection processes. These trainings may be included in the scope of the competition law compliance program. Employees should be aware of the consequences of their statements and the information they provide during inspections and act accordingly. They should also be aware that their personal phones and computers may also be subject to inspection when necessary. On the other hand, they should be informed that they are not obliged to answer all the questions. Being aware of the rules of competition law and the inspection process will ensure more effective management of the process.
Cooperate With the Experts Conducting the Inspection:
The experts conducting the on-site inspection may examine and take copies of all physical and electronic data and documents of the undertaking. Therefore, the undertaking authorities should provide full support for the presentation of the information and documents requested during the inspection. At this point, it is important to provide access to information systems and allow remote access to electronic files. The Board considers the failure to provide remote access to electronic files or the late provision of remote access to electronic files as an act that makes the inspection difficult and imposes an administrative fine of five per thousand of the annual gross income.1 On the other hand, approaching the requests and demands of the experts in a sensitive and cooperative manner during the on-site inspection will also facilitate the inspection and contribute to the healthier progress of the inspection.
Observe Confidentiality:
During the inspection, experts may examine and take copies of various documents, some of which may contain confidential data. Therefore, attention should be paid to the confidentiality of the data regarding employees and third parties. It is important to inform the experts about the presence of personal data in order to prevent a data breach. In addition, it should be kept in mind that correspondence between attorney and client should be protected as a requirement of the right to defence and therefore attorney-client privilege.
Keep an Inventory of Information and Documents:
All documents examined and received during the inspection shall be recorded in a report prepared by the experts and signed by the company officials. The matters identified and recorded in the minutes may be used against the company. Especially in case there is a mistake in the minutes or a document taken can be used as evidence against the company, a copy of all documents examined and taken by the experts must be kept and, if possible, a document inventory must be created for this purpose. This inventory will play an important role in the future course of the investigation.
2. What Not to Do in an On-Site Inspection
Do Not Delete Any Data Once the Inspection Has Started:
According to the established case law of the Board, deletion of data such as folders, e-mails or messages after the on-site inspection has begun is considered as an attempt to hinder evidence and this is considered as an action that makes the inspection difficult. Whether the deleted documents are relevant to the subject matter of the inspection or can be retrieved is not taken into account in the assessment of whether the on-site inspection has been hindered.2 Therefore, once the inspection has begun, no documents or data should be destroyed and it should be ensured that the inspection process is not interfered with. If necessary, company officials should instruct not to delete any documents or information during the inspection and to preserve data integrity.
Do Not Voluntarily Share Documents That Are Not Requested:
During the inspection, employees of the undertaking have the right not to answer every question and to remain silent when appropriate. This right also gives employees of the undertaking the initiative not to voluntarily submit a document that has not been expressly requested by the applicant and reviewed by the Board. In other words, a document should not be submitted for inspection unless it has been expressly requested by the applicant and the experts have requested to examine it. This is important for the management of the investigation process.
Do Not Abuse the Confidentiality Protection:
Some information and documents are protected under the right of defence due to attorney-client privilege. Similarly, information and documents containing personal data may be exempted from inspection within the scope of personal data protection. However, documents that are not directly related to the right of defence or personal data, or that violate competition law are not protected by confidentiality and are subject to inspection. The abuse of attorney-client privilege in order to exempt acts constituting competition infringement from inspection may result in the hinderance or complication of the inspection. Therefore, behaviours aimed at abusing attorney-client privilege should be avoided.
Do Not Ignore the Experts' Requests:
Avoiding a negative attitude towards the experts or obstructing the inspection is critical to the interests of the undertaking. It is necessary to follow the instructions of the experts as far as possible and provide the necessary support. However, it is also extremely important to seek legal advice at every step. In particular, it is necessary to consult an attorney before refusing the experts' request to provide information or documents. It should be noted that the refusal must be legally justified. Therefore, cooperating with experts by obtaining legal support during the inspection process will reduce potential risks.
Do Not Leave Experts Unattended:
Leaving experts unattended may cause the undertaking to lose control of the inspection process and may lead to unintended consequences regarding documents or processes. Experts must be accompanied during the inspection, both to ensure that the inspection process proceeds in a transparent manner and to prevent possible misunderstandings or errors. Therefore, appointing an authorized employee to accompany the experts is important to ensure that the process runs smoothly and that the information needed by the experts is provided in a healthy manner. It is important that the employee accompanying the experts cooperates with the experts and behaves in a calm manner.
Conclusion
On-site inspections are highly sensitive for undertakings, both legally and operationally. It is crucial for undertakings to be prepared for this process in advance and to inform their employees through appropriate strategic plans and training. Being responsive and cooperative to the requests of the examiners allows for smoother management of on-site inspection. At the same time, closely following the process by obtaining legal advice and implementing competition compliance programs will help minimize potential risks and avoid criminal sanctions. As a result, successfully managing on-site inspections protects the company's reputation and legal security, creating a healthier business environment in the long run.
References
Board's Decision Numbered 19-38/584-250. (2019, 11 07). Retrieved from Rekabet Kurumu: https://www.rekabet.gov.tr/Karar?kararId=f36e9c11-c48a-43dc-8c07-e6b1297f06ed
Board's Decision Numbered 24-19/416-169. (2024, 04 18). Retrieved from Rekabet Kurumu: https://www.rekabet.gov.tr/Karar?kararId=2e10e853-a792-4fda-9122-1befc6e5dfa0
Footnotes
1 (Board's Decision Numbered 19-38/584-250, 2019)
2 (Board's Decision Numbered 24-19/416-169, 2024)
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.
