The final quarter of 2023 has brought certain exciting developments and changes to the Leniency Regulation. In September 2023, the TCA published a new draft of the Leniency Regulation for public consultation. At that time, the Leniency Regulation, which provides cartelists with the opportunity to obtain leniency and discounted fines (or even no fine at all) provided they cooperate with the TCA to detect cartels, had been in force for over 14 years. Thus, the changes in the Leniency Regulation were long overdue, and the new draft was welcomed by the sector. In December 2023, the new Leniency Regulation entered into force after its publication in the Official Gazette1.
The principal amendments to the Leniency Regulation can be listed as follows: (i) incorporation of cartel facilitators into the leniency mechanism, (ii) introduction of the requirement to submit documents with significant added value, (iii) support of leniency applications for violations that are not later identified as cartels, (iv) certain timing restrictions for applications, (v) changes to discount ranges for administrative fines, and (vi) certain procedural amendments.
Detailed information on the amendments and the implications of the new Leniency Regulation can be found within our relevant legal alert available here.
The TCA also held a webinar before the end of 2023 to clarify the new provisions contained in the new Leniency Regulation and the issues that differ from the previous regulation that was repealed. The TCA also signalled the issuance of a new guideline for the implementation of the new Leniency Regulation, which is expected to set the main principles of the leniency mechanism.
During the webinar, the TCA confirmed that a focus point for the amendments was to clarify the distinction between the leniency mechanism, which is essentially a method of obtaining evidence for cartels, and the settlement procedure, which is an alternative file conclusion procedure. The TCA also emphasized that prior to 2020 when the settlement procedure was introduced to Turkish competition law, the leniency procedure, going beyond its main function, had been utilized like the settlement procedure. This prompted the TCA to make a clearer distinction between the two separate regimes to ramp up the deterrence of the sanctions. Accordingly, the TCA analysed similar mechanisms used in different jurisdictions and brought a similar concept to the Turkish leniency regime, which obliges leniency applicants to submit documents with significant added value to be able to benefit from immunity in fines.
It was also highlighted by the TCA that providing clarity on parties of a hub-and-spoke cartel benefiting from the leniency regulation was of importance and providing a legal ground for the so-called hubs was achieved with the addition of the definition of “cartel facilitator”. While there were no legal obstacles for the cartel facilitators to benefit from the leniency regime prior to this addition, the TCA emphasized that the additional provision in this respect aimed at clarifying and supporting the possibility of such parties to benefit from leniency, which could be a reassuring step for cartel facilitators to help the TCA to unearth more cartels.
The TCA also provided insight into the reasoning behind the new provision in the legislation, which enables potential parties of a cartel violation to apply and benefit from leniency, even if it is decided that the violation is not a cartel at the end of the investigation. In light of previous cases where leniency applicants were unable to benefit from full immunity in fines as the violation of the leniency applicant was found at a later stage to not constitute a cartel2 , the new Leniency Regulation has set the legal basis of similar applicants to benefit from immunity, which is expected to eliminate concerns of undertakings that hesitate to apply to the leniency program due to uncertainties regarding the nature of the infringement. Although expected, the TCA also clarified during the webinar that the relevant provision is to be applied for violations that could be considered as a cartel in the first instance, which means that undertakings that engage in certain horizontal violations may be able to enjoy this new rule, while vertical restrictions are still out of the scope of the leniency regime.
Final Thoughts
After a long overdue amendment to the active cooperation regulation of Turkish competition law, it is safe to say that there are quite positive expectations regarding the effects and the possible efficiencies the new Leniency Regulation can bring about, easing the burden of long and extensive investigations, both from a preservation and good governance of public resources and the resources of undertakings. A new guideline is also expected from the TCA for the application of the new Leniency Regulation, which is set to clarify any vague definitions in the new legislation and how the TCA plans to implement the new rules.
Footnotes
1. TCA's full English version of the Leniency Regulation can be can be accessed through this link.
2. See the Board's Hyundai Dealers decision dated 16 December 2013 and numbered 13-70/952-403. Please also see the Board's Syndication Loans decision dated 28 November 2017 and numbered 17-39/636-276 for an example of full immunity being granted although the violation does not constitute a cartel.
