Beyond Enforcement: Competition Advocacy Practices Of The Turkish Competition Authority

One of the concrete manifestations of the complex structure of economic life and the regulatory need that accompanies it is the regulation aimed at ensuring effective competition in markets. In this context, markets are regulated through various instruments in order to establish and maintain a competitive environment. One such instrument is competition advocacy, which constitutes one of the functions of competition authorities.

Although competition advocacy may take concrete form through a wide range of activities, it may be defined as initiatives aimed at raising awareness of competition, explaining its benefits and creating a competitive environment through relations with public institutions and organizations and activities directed toward the public, in addition to the enforcement of competition rules.¹ Since competition advocacy may manifest itself through all kinds of activities, it would be more appropriate to assess it in terms of its purpose. In our view, any secondary activity aimed at establishing competition in markets may be characterized as competition advocacy. Indeed, in addition to their primary activities, competition authorities also undertake various activities to foster, disseminate, and strengthen a culture of competition. Although competition advocacy can be traced back to the beginning of the twentieth century, it appears to have been understood at a later stage in countries where competition regulations were established relatively late. Nevertheless, some competition authorities have adopted competition advocacy from the outset of their activities and have pursued such activities effectively.²

Competition advocacy is of great importance for establishing effective competition in markets. The fact that many competition authorities have been established as independent administrative authorities and do not constitute an integral part of the government further demonstrates the importance of their activities within the framework of regulatory functions. The interaction of an authority with public institutions on every matter affecting competition, its provision of opinions on legislative initiatives, and its informative activities aimed at raising awareness among both public institutions and the general public are of vital importance for establishing competition. In this respect, competition advocacy can be regarded as an important instrument enabling competition authorities to perform their functions effectively and as a means that, alongside their primary activities, generates significant gains in pursuit of their objectives.

Undoubtedly, the most significant concrete manifestation of competition advocacy is its contribution to legislative processes. Competition legislation should be supported not only by legislation aimed at protecting effective competition, but also by all legislative initiatives falling within the scope of commercial activity. In such cases, the expert opinions provided by competition authorities concerning legislation are of particular importance for protecting and developing the market structure sought to be established.

The participation of authorities in legislative processes takes place through different procedures. While some authorities are given the opportunity to participate actively in negotiations, others may be required to submit their opinions only after the legislative process has been completed, thereby rendering their contribution less effective. Another issue concerns whether public authorities are bound by the opinions of competition authorities when drafting legislation on matters in respect of which such opinions have been sought. While some authorities are concerned that their opinions may not be binding, there are also views that granting binding-opinion powers to institutions that do not form part of the government would not be appropriate.³

Competition advocacy is carried out not only through legislative activities but also through all kinds of activities aimed at developing a culture of competition within society and markets. Publications and broadcasting activities of authorities, institutional interactions, cooperation with public institutions and organizations, educational activities such as training programs, seminars and conferences, research conducted jointly with academic institutions, and sectoral and market investigations may also be regarded as forms of competition advocacy. In the remainder of this study, the competition advocacy activities of the Turkish Competition Authority (“TCA” or “the Authority”) will be examined and evaluated.

The Turkish Competition Authority and Competition Advocacy

The TCA conducts various activities concerning competition advocacy and occasionally addresses this issue in its decisions. Although the TCA was not granted an explicit statutory mandate regarding competition advocacy, circulars were issued by the General Directorate of Personnel and Principles of the Prime Ministry in 1998 and 2001 requiring the opinions of the Authority to be obtained regarding draft regulations on the competition policies of public institutions and organizations and in their decisions. This indicates that, in addition to the Authority itself, the government of the period also pursued initiatives parallel to those of the Authority with a view to ensuring effective competition.

Despite its relatively young age, the TCA makes effective use of competition advocacy and integrates it into its activities. One of the most significant activities in this regard is the specialty thesis required as a prerequisite for assistant competition experts to become competition experts. The Authority has developed a rather unusual yet highly effective strategy in this respect. Specifically, assistant competition experts seeking to become competition experts are required to prepare a specialty thesis in the field of competition.⁴ These theses are published publicly on the Authority's website. This method, which systematically contributes to the body of academic knowledge, constitutes a strong manifestation of competition advocacy.

The Authority also refers to competition advocacy in many of its decisions. In a decision concerning a public undertaking providing infrastructure services in a particular province, the Authority stated that “(…) although there was no need to initiate an investigation, the opinion of TCA stating that the pricing mechanism should be restructured by the relevant and competent authorities in such a way as to prevent excessive pricing and benefit consumers should nevertheless be communicated pursuant to subparagraph (f) of Article 30 of Law Act No. 4054 (…)”.⁵ In another decision, the Authority resolved that “the application concerning the sales tonnage commitment could not be assessed under Communiqué No. 2002/2 under the existing circumstances; however, taking into account the effects of this issue on the sector, the Presidency should be authorized to submit an opinion to the Energy Market Regulatory Authority (“EPDK”) pursuant to subparagraph (f) of Article 30 of Act No. 4054 (…)”.⁶ These decisions demonstrate that the Authority has established effective communication with regulatory authorities within the scope of competition advocacy.

Another noteworthy practice in this regard is the bulletins published by the Authority in the form of warnings. These publications concerning sectoral activities constitute warnings in which anti-competitive practices of undertakings operating in a particular sector are brought together, and the undertakings concerned are informed that such practices are contrary to competition rules and that the relevant practices should be discontinued.⁷ The first study of this kind was prepared for the driving school sector, and a similar bulletin was subsequently published for bread producers. Based on complaints submitted to it, TCA warned bread producers and professional chambers that they could be subject to sanctions as a result of anti-competitive practices.⁸ Both bulletins contained elements that were simultaneously preventive and educational, while also introducing a new perspective to competition advocacy.

The Authority continues to conduct activities in various fields in line with its competition advocacy mission. As can also be observed from the Authority's annual activity reports, other concrete manifestations of its activities in this field include its representation in various international settings, efforts to develop qualified human resources in the field of competition through training and internship programs, cooperation with universities, and the consistent continuation of various publication and broadcasting activities. In this respect, it can be observed that the Authority has integrated competition advocacy into its activities and continues to pursue it consistently.

Footnotes

1. Turkish Competition Authority, “Competition Advocacy.”

2. ICN, Advocacy and Competition Policy, ICN Conference, Naples, 2002.

3. ICN, ibid.

4. Regulation on the Turkish Competition Authority Professional Staff, Art. 19(1)(b).

5. Competition Board Decision dated 20 December 2006, No. 06-92/1176-354.

6. Competition Board Decision dated 31 March 2010, No. 10-27/410-156.

7. Özkan, Ahmet Fatih, 2016, “A New Tool in Competition Advocacy: The Press Bulletins of the Competition Authority,” İnönü University Law Review, 5(2), p. 517.

8. Özkan, Ahmet Fatih, ibid., p. 517.

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.