Abstract
This article examines the recent transformation of the administrative fines system within Turkish competition law, as introduced by the Regulation on Administrative Fines (Official Gazette, 27 December 2024) and its accompanying Guideline (Competition Authority, 19 February 2025). The study analyzes the historical context, objectives, and systematic changes of the new framework, highlighting its departure from previous lenient practices toward a more rigorous penal system. By eliminating distinctions between violation types and introducing case-by-case penalty calculations, the new regulation aims to address contemporary challenges, particularly in digital markets. The article evaluates the implications for undertakings, emphasizing the increased reliance on settlement mechanisms and the strategic considerations for compliance.
- Introduction and History
In 1997, in the initial stages of Turkish competition law practice, in which we were also involved, there was tolerance in the application of administrative fines for competition violations in the early stages. This situation was implemented as a competition policy as it was early implementation, in parallel with the EU and member states, so that the undertakings would be unfamiliar with competition law and get used to it. Low penalties were given to very clear and serious competition violations, and it was assumed that the undertakings would act more carefully.
While it was clear that this assumption was wrong, its implementation was a preference for the first years. However, both EU experiences and the US practice of over a century required rapid learning, especially for big undertakings. At the beginning of 2009, the Turkish Competition Authority began to define how it would use its authority with a regulatory process by issuing a penalty regulation for the first time. In this regulation, it was determined how much risk the undertakings detected to be infringed on competition would take at the minimum level. In addition, the basic administrative fine lowest limit was determined high by associating it with the concept of clear and serious violations currently included in other secondary legislation and practice. The final fine rate was reached according to the rules of increasing with aggravating factors and decreasing with mitigating factors over the determined basic fine rate. In Turkish competition law practice, no undertaking had ever received an administrative fine exceeding 10% of its turnover from the same investigation, no matter how many different violations it had committed.
Based on the provisions of the Turkish Competition Law, which became more compatible with EU legislation with the legislative amendments, penal policies and practices had diversified with the entrance of "leniency," "commitment," and "settlement" mechanisms. The worldwide pandemic and the subsequent digital economy initiatives and new ways of doing business had strengthened the Competition Authorities' aims to impose high penalties and take additional measures for competition law violations.
The Turkish Competition Authority has also announced that it has entered a new phase in which it will apply higher penalties to competition violations by publishing the new penal regulation and guideline with the "Regulation On Administrative Fines To Apply In Cases Of Agreements, Concerted Practices And Decisions Limiting Competition And Abuses Of Dominant Position" published in the Official Gazette dated 27.12.20241 and the "Guideline on Administrative Fines to be Imposed in Case of Agreements, Concerted Practices and Decisions Restricting Competition and Abuse of Dominant Position" published on the Competition Authority website on 19.02.20252, in order to switch to a penal system suitable for new situations and to apply higher penalties from now on.
2. Objectives of the New Administrative Fines Regulation
The TCA's rationale for revising the fines system is articulated in its official announcement (TCA, 2025). The primary objective is to calculate fines for each competition violation independently, applying aggravating and mitigating factors to determine the total penalty. The previous regulation's reliance on fixed lower and upper fine limits was deemed inadequate for addressing severe violations, particularly those in digital markets that impact entire sectors. The new framework eliminates these limits, enabling the TCA to impose higher penalties tailored to the violation's nature and impact.
This shift reflects the TCA's intent to align with global trends in competition enforcement, where digital platforms and innovative business models have necessitated adaptive regulatory responses (OECD, 2023). The new regulation underscores a commitment to deterrence through proportionate and severe sanctions.
It is understood from the Competition Authority statement that more severe administrative sanctions will be applied to competition violations from now on.
3. Systematic Changes in the New Penal Framework
3.1. General Modifications
The most important change brought by the new penalty regulation is that it removes the distinction between cartels and other violations in determining the basic fine that will determine the total penalty rate and does not foresee any initial rate.
In addition, each violation will be evaluated separately and the upper limit of 10% will be taken into account separately for each violation.
In the case-specific case, the Competition Authority and the Competition Board will apply the administrative procedure according to the severity of the violation and will apply the increase and mitigating reasons in accordance with criteria such as commitment, compliance with conciliation systems, cooperation and the duration of the violation.
The justifications for the regulation change in the guideline are that the distinction between cartels and other violations should be ended in the application of the penalty, the increase and reduction criteria to be determined when applying the penalty should be determined subjectively for the enterprise, and higher penalties should be given in digital markets.
The new regulation and guideline have eliminated legal certainty compared to the old practice and have revealed that all violations should be treated with caution.
3.2.Determination of Basic Fine; Separate Violation, Separate Fine.
While the basic principles in determining penalties are explained in the guide, attention is drawn to the determination of separate violations. It is emphasized that in defining each competition restriction as a separate violation, the definition will be made with principles such as the integrity of the violation, time flow, integrity of evidence and case laws according to the nature of the incident. It is possible for an enterprise to be subject to investigation with more than one violation at the same time.
The upper limit of the penalty to be applied will be applied for each separate violation with a rate of 10% of the total turnover of the enterprise in the year before the date of the decision.
In case of detection of multiple violations by an enterprise, very high penalties such as 30-40-50% may be given.
In the application of penalties, a basic fine will be determined separately for each violation according to the subjective situation.
The increase and reduction rates regarding the basic fines will be applied later.
The reductions that occur according to the "active cooperation" and "settlement" regulations, if any, will be applied separately for each violation on the total administrative fine to be found.
The initial penalty rate in the guide is as follows; It has been explained that in cases where there is damage caused by the violation and the violation is clear and serious, the initial penalty amounts will be determined higher.
It has been explained that in cases where there is damage, high rates will be determined in violations of undertaking with higher market share in geographically larger markets. It has been explained that in cases where there is serious and obvious violation such as price fixing, market sharing, and collusion in tenders, the initial penalty rate will be determined higher.
3.3.Aggravating Circumstances
The increases in the initial penalty rate according to the duration of the violation are explained in the regulation and guide.
Accordingly, it has been announced that it will be increased by one fold for violations lasting longer than 5 years, and by 1/5, 2/5, 3/5 and 4/5 on an annual basis for violations up to 5 years. It has been explained that the first violation date and the full calendar year principle will be applied in calculating the periods and that the provisions of the Code of Civil Procedure and the Turkish Code of Obligations will be applied to the extent appropriate.
Among the reasons for the increase, the penalty received by the same undertaking from the Competition Authority, even if under different articles, will be taken as the basis for recurrence. Different legal entities can also be determined as the same undertaking within the definition of undertaking. A decision previously taken as the basis for recurrence will not be taken as the basis for recurrence again. In other words, recurrence will be applied once. In the event of recurrence, the basic fine may be increased up to one fold at the discretion of the Board.
Other conditions for increasing the basic fine, the existence of a decisive effect in the violation, the continuation of the violation and the failure to comply with the confidentiality obligation during the reconciliation process are explained as discretionary aggravating factors.
It has been explained that if there is more than one aggravating factor, an aggravating increase will be made on the total rate.
3.4.Mitigating Circumstances
In the new system, the mitigating factors are;
- undertakings assisting the on-site investigation by providing information on their own,
- committing the violation under the pressure of other undertakings,
- limited participation in the violation,
- the activities in question having a low share in the turnover,
- the existence of public authority incentives,
- the existence of buyer power in the market,
- there is no established jurisprudence for the violation yet and the existence of force majeure, and it has been explained that there may be discretionary discount reasons with new jurisprudence as well as old jurisprudence.
The discount reason clearly introduced with the new regulation is the high rate of export revenues. It has been explained that undertakings operating based on exports can benefit from a new discount reason provided that they have not committed a violation with the power they receive from this.
3.5.Penalty Imposition on Undertaking Employees
It has been explained that managers who have a decisive influence on the formation of the competition restrictions among the employees of the enterprise may also be given a penalty of five percent of the penalty given to the enterprise.
It has been explained that in order to impose a penalty on the managers, the decisive influence must be determined as "an indispensable function in the formation and/or continuation of the violation".
3.6.Determination of the Final Fine Rate
As stated above, the basic fine, which will be determined differently on a case-by-case basis depending on the nature of the violation, will be applied at discretion in the presence of aggravating and mitigating factors, and the final penalty rate will be reached.
In addition to the guide for the application of the new penalty system, penalty calculation tables are provided. In these sample calculations, it is also presented as an example that two separate violations can be sentenced to a penalty of more than 10%.
4. Evaluation of the New Fine Systematics
In the guideline, as in the regulation, explanations have been made with uncertainties due to the high discretionary power in determining the starting rate of the basic fine and the discount rates.
It would not be wrong to say that the period of high-rate penalties has begun with the penalization system to be determined on a case-by-case basis.
In the application of the new penalization system of Turkish competition law, the possibility of administrative fines exceeding 10% of the turnover in multiple different violations has also been clearly brought to the agenda.
This strict penalization policy may further increase the application of the "settlement" mechanism, which has been used intensively in Turkish competition law application in recent years and is also preferred by undertakings.
In the application of reconciliation, the ability to determine the penalty rate low and to make a discount from the determined rate is seen as a positive application for undertakings.
On the other hand, the acceptance of the violation without a Board decision, the inability to resort to litigation, the direct finalization of a violation that will be taken as a basis for recurrence, and becoming the direct addressee of compensation claims are the negative aspects of this application.
5. Conclusion
Undertakings that will be subject to Turkish competition law application must make their evaluations during the investigation process and determine their investigation strategy.
Taking into account the strict penalty policy, even if they do not consider that they have committed a violation, they will have to choose between closing with a low penalty through the institution of "settlement" or a long-term legal battle that includes the lawsuit phase in order to defend that there was no violation until the end.
Footnotes
1. https://www.rekabet.gov.tr/Dosya/para-cezalari-yonetmeligi-20250306110611418.pdf
2. https://www.rekabet.gov.tr/Dosya/ceza-yonetmeligi-kilavuzu-20250306110146946.pdf
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