ARTICLE
14 January 2025

A New Era In Enforcement: The Turkish Competition Authority Updates Administrative Fines Framework

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Inal Law Office

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Led by Şeyma İnal, İnal Law Office combines in-depth knowledge of Turkish law with an international outlook. Experienced members of our team assist local and multinational clients in Commercial, M&A, Shipping, Banking and Finance, Corporate, Energy, Transportation, Construction, Competition, Employment, Litigation and Arbitration fields under the requirements of business frameworks.
The TCA has fundamentally reshaped its approach to administrative fines with the publication of the Regulation on Fines to Apply in Cases of Agreements, Concerted Practices and Decisions Limiting Competition and Abuse of Dominant Position ..
Turkey Antitrust/Competition Law

The Turkish Competition Authority ("TCA") has fundamentally reshaped its approach to administrative fines with the publication of the Regulation on Fines to Apply in Cases of Agreements, Concerted Practices and Decisions Limiting Competition and Abuse of Dominant Position ("New Regulation") in the Official Gazette no. 32765 on December 27, 2024 and entered into force on the same date. This reform replaces the former regulation from 2009 ("2009 Regulation") responding to the evolving challenges of modern markets. By moving away from traditional violation categories toward a more flexible, effects-based assessment system; the amendments better reflect the complexity of contemporary anticompetitive practices while granting the Turkish Competition Board ("TCB") more discretion on determining the administrative monetary fines to be imposed. Key updates include:

  • Modernized Base Fine Rate Calculation Framework: The New Regulation eliminates the traditional distinction between cartels and other violations, along with predefined base fine rate limits for different violation types. It introduces a graduated scale for fine increases based on the duration of infringements, ranging from 20% for violations lasting 1-2 years to 100% for those exceeding 5 years, replacing the previous binary system of a 50% increase for 1-5 years and 100% for over 5 years.
  • Expanded Scope and Refinement of Aggravating Factors: The refined framework introduces new concepts like decisive influence and breaches of confidentiality obligations as aggravating factors, replaces the narrower "continuation of cartel" with the broader "continuation of violation" and clarifies the scope of recidivism for more consistent enforcement.
  • Restructured Mitigating Factors: The updated regulation removes the fixed reduction rates of (25–60%), leaving them to the TCB's discretion. It also refines the criteria for cooperation during on-site inspections, introduces foreign sales revenue as a mitigating factor, and abolishes elements like voluntary compensation and encouragement by public authorities.
  • From Cartel-Specific to Comprehensive Individual Liability: By removing the distinction between cartel and non-cartel violations for individual liability, the New Regulation allows fines of up to 5% of the administrative monetary fine imposed on the undertaking to be applied to managers and employees with decisive influence in any type of violation.
  • Refined Rules for Addressing Multiple Violations: The restructured framework allows the TCB to impose separate fines for each identified violation without needing to establish their independence in terms of market, nature, and chronological process, as was previously required under the 2009 Regulation.
  • New Definitions Introduced: New terms like "Decisive Influence," "Undertaking," and "Association of Undertakings" have been introduced, while concepts such as "Cartel," "Other Violations," and "Active Cooperation" have been removed.

Marking a significant transition from the 15-year-old framework, the New Regulation marks a significant shift to a modernized enforcement regime; reflecting the realities of evolving markets where business models and consumer behaviours are rapidly changing, and the increasing diversification of violations necessitates a more dynamic and tailored approach to the fines. The practical application of these reforms will depend on the TCB's evolving decisional practice, where ensuring legal certainty and predictability will be of critical importance to the undertakings subject to the administrative monetary fines to be imposed.

Base Fine Rate Calculation

The New Regulation introduces a significant departure from the previous methodology for determining base fines. One of the most transformative changes brought forward is the elimination of the distinction between "cartels" and "other violations," and the previously foreseen limits applicable to such different violation types (in the 2009 Regulation, 2% to 4% was foreseen for cartels and 0.5% to 3% for other violations). As a result, the calculation of fines will no longer vary based on the type of violation, while the base fine rate is no longer subject to predefined limits; granting the TCB the discretion to determine a base fine rate up to the statutory maximum of 10% of the undertaking's turnover, as stipulated under Article 16 of Law No. 4054 on the Protection of Competition.

The TCA's updated framework represents a significant shift in the methodology for calculating base fine rates, introducing nuanced changes in both focus and application. Under the previous regulation, the phrase "such factors" allowed for broad interpretative flexibility by listing criteria such as market power and the severity of actual or potential damage as examples, rather than fixed requirements. On the other hand, the new system uses the term "notably," which prioritizes specific considerations—such as actual or potential competitive harm and the manifest nature of the violation—while still allowing room for additional factors to be taken into account. Indeed, the base fine rate is now determined by assessing the severity of actual or potential competitive harm and whether the violation qualifies as "naked" and/or "hardcore." These terms refer to serious anticompetitive conduct, such as price-fixing or market allocation agreements, which inherently distort market dynamics and undermine consumer welfare. The exclusion of market power from the explicit criteria represents a strategic shift, aligning the methodology toward an impact-based approach. Having said that, the New Regulation does not explicitly define what constitutes a "naked" or "hardcore" violation, raising questions about whether these terms will be confined to violations explicitly outlined in secondary legislation1 or interpreted more broadly to include other forms of anticompetitive behaviour.

In addition to the above, the updated regime introduces a significant refinement in the methodology for incorporating the duration of infringements into fine calculations, replacing the previous binary structure with a more nuanced and flexible framework. Under the former system, violations were classified into two broad categories: a 50% fine increase for durations between one and five years, and a 100% increase for durations exceeding five years. The New Regulation adopts a graduated scale of increases, structured as follows:

  • 20% increase for violations lasting 1-2 years,
  • 40% increase for violations lasting 2-3 years,
  • 60% increase for violations lasting 3-4 years,
  • 80% increase for violations lasting 4-5 years,
  • 100% increase for violations exceeding five years.

This graduated approach ensures that each additional year of infringement results in proportionate consequences, addressing the rigidity of the prior system while enhancing proportionality and predictability.

Aggravating Factors

The New Regulation introduces significant updates to the treatment of aggravating factors, enhancing their applicability, precision, and enforcement flexibility. These changes include the expansion of existing concepts, the introduction of new criteria, and the removal of certain provisions, all aimed at streamlining enforcement and aligning administrative monetary fines to be imposed with the gravity of violations.

A notable advancement lies in the recalibration of recidivism provisions. By clarifying that violations of both Article 4 (anticompetitive agreements) and Article 6 (abuse of dominance) can trigger recidivism, regardless of their similarity to prior infractions, the New Regulation eliminates ambiguities from the 2009 framework. This expansion not only broadens the scope of deterrence but also reinforces the TCA's commitment to addressing repeat violations comprehensively. Additionally, the removal of the previous "half to onefold" limitation on fine increases for recidivism grants the TCB the flexibility to impose cumulative increases of up to onefold, even in cases involving multiple violations.

The concept of ongoing violations has also been redefined. Replacing the narrower "continuation of cartel" provision, the broader "continuation of violation" concept now applies to sustained anticompetitive conduct across various anticompetitive behaviours. This adjustment reflects the Authority's intent to align enforcement mechanisms with contemporary market dynamics and strengthen deterrence against persistent harm.

The introduction of "decisive influence" as an aggravating factor marks another key advancement. This criterion allows fines to increase by up to 100% when an undertaking or individual plays an indispensable role in initiating or sustaining a violation. Similarly, breaches of confidentiality obligations under the Settlement Regulation2 can result in equivalent fines, reflecting the Authority's focus on ensuring procedural integrity alongside substantive enforcement.

While some aggravating factors from the 2009 Regulation—such as non-compliance with commitments, failure to cooperate during inspections, and coercion of other undertakings—have been removed, the updated framework introduces a more sophisticated mechanism for handling multiple aggravating factors. These factors can now be applied cumulatively, with their respective increase rates summed and added to the base fine. This adjustment ensures that administrative fines better reflect the complexity and gravity of specific violations, aligning enforcement with modern market realities.

Taken together, these refinements align the TCA's enforcement practices with global trends, enhancing its ability to deter and address anticompetitive behaviour effectively while ensuring fairness and proportionality in administrative fines.

Mitigating Factors

The updated framework for mitigating factors under the New Regulation introduces important changes, with one of the most notable being the removal of fixed reduction rates for mitigating circumstances, which were previously set between 25% and 60% under the 2009 Regulation. This change grants the TCB greater discretion in determining reduction rates, allowing for case-specific adjustments but also may raise potential uncertainties in its practical application.

The scope of mitigating factors has also been expanded, with several key additions; while the prior rules already recognized cooperation during the on-site inspections beyond legal obligations as a mitigating factor, the New Regulation provides greater detail by specifying that contributions such as offering physical or technical support to facilitate shorter or more effective on-site inspections, or voluntarily submitting additional relevant information or documents, will be considered. This incentivizes proactive engagement by undertakings during investigations. Other notable inclusions are "limited participation in the violation" and the consideration of "foreign sales revenues" within the total annual gross revenues.

Lastly, some mitigating factors previously recognized under the 2009 Regulation have been removed. These include voluntary compensation to affected parties, acknowledgment and termination of other violations, and encouragement of violations by public authorities. The exclusion of these provisions reflects a stricter interpretation of compliance, placing greater responsibility on undertakings to proactively prevent and address anticompetitive conduct.

Overall, the New Regulation reflects the TCA's commitment to a more flexible and nuanced enforcement approach. While the expanded range of factors broadens the scope for tailored fine reductions, the elimination of fixed reduction ranges underscores the need for clear and consistent decision-making by the TCB to ensure fairness and predictability in enforcement.

Administrative Fines for Managers and Employees

The New Regulation introduces a significant update to the treatment of individual liability by eliminating the distinction between cartel and non-cartel violations. Under the 2009 Regulation, managers and employees with decisive influence in cartel violations were subject to fines ranging from 3% to 5% of the administrative monetary fine imposed on the undertaking, whereas those involved in non-cartel violations were not penalized at all.

The New Regulation removes this differentiation, establishing that managers and employees with decisive influence in any type of violation—whether cartel-related or otherwise—can now be fined up to 5% of the fine imposed on the undertaking. This shift represents a more unified and equitable approach to individual liability, ensuring consistent accountability across all forms of anticompetitive conduct.

New Definitions Reflecting Modern Competition Practices

The regulation introduces new concepts reflecting the evolving landscape of competition law practice. For example, concepts such as "Decisive Influence", "Undertaking", "Association of Undertakings" and "Settlement Regulation" have been added. Simultaneously, terms like "Cartel", "Other Violations" and "Active Cooperation" have been removed, signalling a shift toward a more nuanced understanding of anti-competitive practices. Besides, the definition of Annual Gross Revenue has been broadened to include revenue from core operations, along with ordinary income or profits from other activities.

Separate Violations and Their Treatment Under the New Regulation

The New Regulation introduces a fundamental change in how administrative fines are calculated for multiple violations. Under the 2009 Regulation, separate fines could only be imposed if violations were proven to be independent in terms of market, nature, and chronological process. The New Regulation eliminates this requirement, allowing the TCB to impose separate fines for each identified violation without needing to establish their independence. This shift simplifies enforcement while adopting a stricter stance on multiple violations, aiming to enhance deterrence and ensure a more robust competition framework. Having said that, the TCB's future decisions by the will be crucial in clarifying how separate violations are defined and applied in practice.

Conclusion

The TCA's New Regulation signifies a pivotal transformation in competition law enforcement, shifting from rigid, rule-based categorizations to a more flexible, effects-based framework. By eliminating the traditional distinction between cartels and other anticompetitive practices, removing predefined fine ranges, and introducing refined assessment criteria, the updated framework equips the TCA with advanced tools to navigate the complexities of modern markets. However, this increased flexibility underscores the critical importance of ensuring compliance with the principles of legal certainty, predictability, and equality; while the effectiveness of the framework will hinge on the TCB's ability to develop robust decisional practices in key areas, such as assessing competitive harm, applying aggravating and mitigating factors, and addressing multiple violations. In addition, with the removal of fixed fine reduction rates and the expansion of the TCB's discretionary powers, establishing clear and well-reasoned precedents will be essential to balance enforcement flexibility with the predictability required by undertakings. Having said that, this increased discretion may also lead to heightened legal challenges, particularly concerning the proportionality of fines and the consistent application of the New Regulation's criteria.

The New Regulation necessitates a comprehensive reassessment of compliance strategies by the undertakings subject to the TCA's investigations. Indeed, its stricter stance on multiple violations, coupled with the removal of certain cooperation incentives, highlights the critical need for robust internal compliance mechanisms to effectively mitigate risks arising from competition law violations. Ultimately, the new regime introduces a sophisticated and adaptable framework for competition law enforcement while its success in achieving deterrence and proportionality will depend on the TCB's capacity to deliver transparent, consistent, and well-reasoned decisions. This will not only foster predictability and fairness in the Turkish competition law practice, but also strengthen the enforcement of competition law in Turkey's dynamic and rapidly evolving economic environment.

Footnotes

1. The definition of naked and hardcore violation were introduced into Turkish competition law practice through the Communiqué No. 2021/3 on Agreements, Concerted Practices, and Decisions and Practices of Associations of Undertakings That Do Not Significantly Restrict Competition, entered into force on March 16, 2021.

2. Regulation on the Settlement Procedure Applicable for Investigations on Anticompetitive Agreements, Concerted Practices, Decisions and Abuse of Dominant Position

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.

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