A New Era for Regulatory Fine
The Turkish Competition Authority (TCA) announced completion of a landmark amendment to its regulation of fines on 27 December, 2024.
Firstly, the new regulation has abolished definitions of "cartel violations" and "other violations" which determined the base fine rate (2-4% and 0.5-3% respectively). A base fine rate no longer applies granting the TCA a wide margin of discretion.
Secondly, a staggered increase in fine based on duration of the breaching activity replaces the old system (which increased fines by 50% and 100%, respectively, for breaches lasting 1-5 years and more than 5 years). Fines will now increase by 20% for each year of the relevant infringing activity (by 20% for 1-2 years; 40% for 2-3 years etc).
Thirdly, the amount of reduction for mitigating circumstances is now entirely at the discretion of the TCA (having previously been limited to between 25-60% of the base rate fine).
Finally, the new regulation has introduced a new clause which confirms an increase in fine "if the parties resume the infringement after notification of the investigation" (the original wording having been "in case the parties resume the cartel after notification of the investigation").
For a more detailed analysis of the new regulation please see our article here.
TCA Breaks Duck with Merger Dawn Raid
Param's acquisition of Kartek had previously been subjected to a Phase II review. According to a recent announcement, the transaction is cleared subject to commitments.
Kartek is active in (i) software/hardware services, (ii) operational activities (card operations, POS/ ATM) and (iii) mobile payments, etc. Param is an e-money company.
Anonymous complaints alleged that the transaction was closed without waiting for TCA approval. The target had allegedly already started using the acquirer's brand in its advertising and implemented other actions, such as senior employee transfers and price increases, before obtaining clearance.
The dawn raids saw seizure of several documents confirming completion of the transaction without approval and indicating:
- The acquirer appointed the target's senior management.
- The acquirer attended the target's senior management meetings.
- The acquirer played a decisive role in promotion, salary increases and choice of bank for salary payments.
- Development of joint sales and marketing activities.
- The acquirer joined customer meetings presenting a united front.
- The acquirer carried out day-to-day activities (bills, social media, payment plans regarding debts etc).
- The acquirer provided manpower for operational and systemic processes.
As a result, the TCA fined two members of the Yilmaz family as ultimate shareholders in Param.
New Interim Measure Decisions Published
The TCA has respectively denied and allowed requests for interim measures against Frito Lay and Novo.
It had been alleged that Frito Lay hindered competitors at retail sales points by de facto exclusivity practices via its use of stands. The TCA stated interim measures require strong indications of infringement resulting in serious, irreparable harm. Though Frito Lay is dominant in the packaged chips market, the TCA could not find a prima facie connection between exclusivity and stand usage. The request was therefore denied.
Having applied similar logic to a complaint against Novo, however, the TCA found the company offered personalized, progressive, retrospective discounts likely to result in dominance for the specific product concerned. Moreover, this view was supported by documents seized during an on-site inspection.
The TCA therefore granted the interim measure in relation to the applicable product only.
Ciceksepeti Investigation Closed (Pursuant to Commitments)
An investigation arose from allegations that Çiçeksepeti closed its platform services to third parties and favoured its own dealers. The company, a leading online seller of flowers, offered two commitments:
- Third party sellers who meet certain requirements will be allowed to operate on the platform at their request.
- Publication of basic parameters affecting search ranking to facilitate transparent search results.
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