Cartel leniency in Turkey: overview

A Q&A guide to cartel leniency law in Turkey.

The Q&A gives a succinct overview of leniency and immunity, the applicable procedure and the regulatory authorities. In particular, it covers the conditions to be satisfied, the method of making an application, availability of immunity from civil fines to individuals, the scope of leniency, circumstances when leniency may be withdrawn, leniency plus, confidentiality and disclosure, and proposals for reform.

To compare answers across multiple jurisdictions visit the Cartel leniency Country Q&A tool.

This Q&A is part of the global guide to competition and cartel leniency. For a full list of jurisdictional Cartel Leniency Q&As visit www.practicallaw.com/leniency-guide.

For a full list of jurisdictional Competition Q&As, which provide a high level overview of merger control, restrictive agreements and practices, monopolies and abuse of market power, and joint ventures in multiple jurisdictions, visit www.practicallaw.com/mergercontrol-guide and www.practicallaw.com/restraintsoftrade-guide.

Contents

Regulation

1. What laws provide for a leniency programme and which regulatory authority administers it? Is there any published guidance?

Applicable laws and guidance

The statutory basis for competition law in Turkey is the Law on Protection of Competition No 4054 (Competition Law). The secondary legislation specifying the details of the leniency mechanism is the Regulation on Active Cooperation for Discovery of Cartels (Leniency Regulation) of 15 February 2009 and the Guidelines on Clarification of Regulation on Leniency (Leniency Guidelines) of 19 April 2013.

Regulatory authority

The national competition authority for enforcing the Competition Law is the Competition Authority, a legal entity with administrative and economic independence.

The Competition Authority consists of the:

  • Competition Board. In its capacity as the competent body of the Competition Authority, the Competition Board is responsible for, among other things, reviewing and resolving cartel cases and leniency applications. The Competition Board consists of seven members and is seated in Ankara.

  • Presidency.

  • Main Service Units, which comprise the following:

    • five supervision and enforcement departments;

    • department of decisions;

    • economic analyses and research department;

    • information management department;

    • external relations, training and competition advocacy department;

    • strategy development, regulation and budget department; and

    • cartel and on-site inspections support division (Leniency Division).

Each of the five supervision and enforcement departments has a sectoral job definition.

 
2. What infringements of competition law does the leniency programme cover?

Under the Leniency Regulation, the leniency programme is only available for cartelists. It does not apply to other forms of anti-trust infringement. Section 3 of the Leniency Regulation provides a definition of cartel, which encompasses price fixing, customer/supplier/market sharing, restricting output or placing quotas, and bid-rigging.

The Turkish cartel regime is, in principle, administrative and civil in nature (not criminal). Certain antitrust violations such as bid-rigging in public tenders may also be criminally-prosecutable, depending on circumstances.

 

Recent cases

3. What notable recent cases have applied the leniency programme?

In the aftermath of the entry into force of the Leniency Regulation, several leniency applications were submitted before the Competition Board. As leniency applications are confidential, the examples below are limited to certain non-confidential applications.

Following a leniency application, the Competition Board initiated an investigation in early 2014 concerning several undertakings, including the Deutsche Bahn group of companies operating in the market for rail freight forwarding services on allegations of an Article 4 violation through customer allocations agreements within the framework of Balkan Train and Soptrain cooperation (16 December 2015, 15-44/740-267). At the end of the long in-depth investigation, the Competition Board concluded that the customer protection agreements have not produced effects on the Turkish markets within the meaning of Article 2 of Law No. 4054 and therefore, the allegations in question do not fall within the scope of the Competition Law.

In Yeast (22 November 2014, 14-42/738-346), the Competition Board launched an investigation against four fresh yeast producers to determine whether they violated article 4 of the Competition Law by fixing the prices of fresh bread yeast. The Competition Board held that the defendants violated Article 4 and imposed a total fine of approximately TL14 million (approximately EUR5 million) on three yeast producers. The fines range between 1.8% and 2.7% of their annual turnover. Mauri Maya San. A.Ş received full immunity as a result of its leniency application. The leniency application was submitted after the dawn raids. Mauri Maya could otherwise have received a monetary fine of 4.5% of its annual turnover. Through this decision, the Board implicitly invited more leniency applications, even for the cases where a pre-investigation is already initiated and dawn-raids were conducted.

In Hyundai dealers (16 December 2013, 13-70/952-403), the Competition Board launched an investigation to determine whether 21 Hyundai dealers violated Article 4 of the Competition Law through an agreement to fix prices and sale conditions of new Hyundai cars. Although one of the investigated dealers submitted a leniency application, the Competition Board did not consider it a proper leniency submission. It viewed it as a mitigating factor under the Regulation on Fines. That was because the conduct in question did not amount to a cartel, the only violation for which leniency is available. The Competition Board granted a reduction of one fourth of the fine to be imposed to the applicant dealer due to its active-cooperation. The other dealers were imposed a monetary fine equal to 3% of their annual turnover.

 

Availability of leniency

Administrative liability

4. Is full immunity from administrative penalties available? What conditions must be met for immunity to be granted?

Application for leniency

A cartelist may apply for leniency until the investigation report is officially served. Depending on the application order, there may be total immunity from, or reduction of, a fine. This immunity or reduction includes both offending companies and their employees/managers, with the exception of the "ring-leader" which can only benefit from a second degree reduction of fine.

First applicant

The first applicant undertaking to file a complete application for leniency before the opening of a preliminary investigation (or after the preliminary investigation up until the "investigation report") is officially served, may benefit from total immunity, subject to the condition that the Competition Authority has no evidence on the cartel infringement. Employees/managers of the first applicant will also be totally immune. However, for there to be total immunity, the applicant must not be the "ring-leader". If that is the case (that is, the applicant has forced the other cartelists to participate in the cartel), there will be a reduction of fine between 33% to 50% for the undertaking and between 33% to 100% for the employees/managers.

Second applicant

The second applicant to file a correctly prepared application will receive between a 33% to 50% reduction of the fine. Employees/managers of the second applicant that actively co-operate with the Competition Authority will benefit from a reduction of between 33% to 100%.

Third applicant

The third applicant will receive between a 25% to 33% reduction. Employees/managers of the third applicant that actively co-operate with the Competition Authority will benefit from a reduction of between 25% to 100%.

Subsequent applicant

Subsequent applicants will receive between a 16% to 25% reduction. Employees/managers of subsequent applicants will benefit from a reduction of between 16% to 100%.

Conditions for immunity

The conditions for benefiting from the immunity/reduction are as follows:

  • The applicant must submit:

    • information on the products affected by the cartel;

    • information on the duration of the cartel;

    • names of the cartelists;

    • dates, locations, and participants of the cartel meetings;

    • other information or documents about the cartel activity.

  • The required information may be submitted verbally.

  • The applicant must avoid concealing/destroying the information/documents on the cartel activity.

  • Unless the Leniency Division decides otherwise, the applicant must stop taking part in the cartel.

  • Unless the Leniency Division instructs otherwise, the application must be kept confidential until the investigation report has been served.

  • The applicant must continue to actively co-operate with the Competition Authority until the final decision on the case has been rendered.

 
5. Is there a sliding scale of available leniency from administrative penalties?
 
6. Is immunity or leniency for administrative penalties available to individuals? If so, what conditions apply?

Immunity or leniency is available to managers and employees. There are as yet no precedents about the status of former employees (see Question 4). Individuals who carry out an economic activity and act as an undertaking within the meaning of competition laws can also benefit from the leniency programme, if they take part in a cartel.

The Competition Board may not grant any reduction in fines to the applicant in cases where one or more of its employees refuse to co-operate. In its decision, the Competition Board considers the number of executives/employees that do not cooperate with the Competition Authority, their positions within the undertaking and any effort given by the undertaking to enable these persons' co-operation. In practice, therefore, it is in the Competition Board's discretion to decide whether or not it will apply a reduction.

 

Criminal liability

7. Is immunity or leniency available for companies and/or its employees in relation to criminal prosecution? What are the implications for employees when an undertaking has been granted immunity or leniency?

Circumstances

While the Turkish cartel regime is administrative and civil in nature, certain antitrust violations such as bid-rigging in public tenders may also trigger criminal consequences. Immunity or leniency does not close the door on leveraging criminal procedures on the basis of a Competition Board decision.

Proceedings against employees

Cartel conduct will not result in imprisonment against the individuals implicated unless the investigated act amounts to a criminally-prosecutable conduct such as bid-rigging in public tenders or illegal price manipulation. There have been cases where the matter had to be referred to a public prosecutor before or after the relevant competition law investigation was completed. Employees/managers of an offending company may face criminal liability, even in cases where the company benefits from immunity or leniency.

Employees' interests

The current employees of a cartel member also benefit from the same level of leniency or immunity that is granted to the entity (see Question 6).

 

Application proceedings

8. When should an application for leniency be made?

In order to benefit from immunity or a reduction in administrative fines, the applicant must make a leniency application either:

  • Before the opening a preliminary investigation.

  • After the preliminary investigation has opened but before the "investigation report" is officially served (where the Competition Authority has no evidence proving the cartel).

 
9. What are the procedural rules for leniency applications?

Relevant authority

The Competition Authority is the body to whom leniency applications must be made.

Applicant

The application can be made by the company, a representative on behalf of the relevant company, employees and managers of the company and/or by an individual employee or manager personally.

Informal/confidential guidance

Under the Leniency Regulation, anyone wanting to benefit from the leniency programme can obtain information on a confidential basis, whether the applicant would receive full immunity or fine reduction. However, the prospective applicant must provide enough information for the Competition Authority to evaluate whether the applicant will qualify. The amount of information required will be determined on a case-by-case basis.

Form of application

Applications can be made in person, via email, fax or phone, orally or in writing.

Markers

The Competition Authority can grant a grace period to applicants to submit the necessary information and evidence under the Leniency Regulation to complete their applications. For the applicant to be eligible for a grace period, it must provide minimum information concerning the:

  • Affected products.

  • Duration of the cartel.

  • Names of the parties.

Information/evidence

See Question 4.

Oral statements

There is no legal obstacle against conducting a leniency marker application orally. The Leniency Regulation provides that information required for making a leniency application (see Question 4) can be submitted verbally. In such a case the submitted information should be put into writing by the administrative staff of the Competition Authority and confirmed by the relevant applicant or its representatives.

Short-form applications

Not applicable.

 
10. What are the applicable procedures and timetable?

The Leniency Regulation and the Leniency Guidelines do not refer to certain timing for the Competition Board's decision on the leniency application. The Competition Board should decide on the leniency application before the investigation is completed.

 

Withdrawal of leniency

11. In what circumstances and at what stage of the proceedings can leniency be withdrawn? What implications does the withdrawal of leniency from one company have for other applicants?

Although the relevant legislation does not explicitly set out rules, leniency applications can be withdrawn. However, the Competition Authority can continue the investigation ex officio after the withdrawal.

 

Scope of protection

12. What is the scope of leniency protection after it has been granted?

In principle, the leniency protection is limited to the specific investigation it is part of. If the Competition Authority discovers further evidence of the investigated act, this does not deprive the applicant of the benefits of the leniency protection, to the extent the applicant continuously complies with the Leniency Regulation.

The leniency protection in a specific investigation does not spill over to other violations investigated in other proceedings.

An offending company that is not eligible for immunity in an ongoing investigation can receive a one fourth reduction in the ongoing investigation on top of the reduction it is already entitled to, if it provides the information/documents sought by the Leniency Regulation concerning another cartel.

 
13. Does the competition authority offer any further reduction in fines for an undertaking's activities in one market if it is the first to disclose restrictive agreements and practices in another market (leniency plus)?

An applicant that does not qualify for full immunity under an ongoing investigation but discloses another cartel before the initiation of a preliminary investigation will receive a fine reduction by one forth pursuant to Regulation on Fines.

 
14. Does the grant of leniency affect a third party's ability to bring a follow-on damages action against a leniency applicant?

Article 57 et seq of the Competition Law entitles any person who is injured in his business or property by reason of anything forbidden in the anti-trust laws to sue the violators for three times their damages plus litigation costs and attorney fees. The case must be brought before the competent general civil court. In practice, courts usually do not engage in an analysis as to whether there is actually a condemnable agreement or concerted practice, and wait for the Competition Board to render its opinion on the matter, therefore treating the issue as a prejudicial question. Since courts usually wait for the Competition Board to render its decision, the court decision can be obtained in a shorter period in follow-on actions. An immunity or leniency does not have a binding effect on the court so third parties that are aggrieved by the violation can sue offending parties before a civil court despite the existence of an immunity or leniency.

 

Confidentiality and disclosure

15. What are the rules relating to confidentiality during a leniency application?

Identity disclosure

Under the principles set out under the Leniency Regulation, the applicant (the undertaking or employees/managers of the undertaking) must keep the application confidential until the investigation report is officially served, unless it is otherwise requested by the authorised unit.

Articles 6 and 9 of the Leniency Regulation provide that unless otherwise stated by the authorised division, the principle is to keep leniency applications confidential until the service of the investigation report. Nevertheless, to the extent the confidentiality of the investigation will not be harmed, the applicant undertakings can provide information to other competition authorities or institutions, organisations and auditors. Under paragraph 44 of the Leniency Guidelines, if the employees or personnel of the applicant undertaking disclose the leniency application to the other undertakings and breach the confidentiality principle, the Competition Board will evaluate the situation on a case-by-case basis, based on the criteria of whether the person at issue is a high level manager, or whether the Competition Board was notified promptly enough after the breach or not.

Applicants can request anonymity until the legal service of the investigation report.

Information disclosure

See above, Identity disclosure.

Confidentiality requests

Leniency applicants can request anonymity until the investigation report is officially served. Leniency applicants can also request confidentiality of trade secrets for up to five years within the scope of Communiqué No. 2010/3 on the Regulation of Right to Access to File and Protection of Commercial Secrets.

 
16. What are the rules concerning disclosure of statements made in support of a leniency application?

Domestic submissions and domestic discovery

Turkish courts can subpoena documents/information from all public or private authorities and bodies, including the Competition Authority. The Competition Authority is constitutionally required to submit all information/documents requested by a Turkish court. Information/documents submitted as part of a leniency application can be subject to discovery orders in Turkish courts, which can consider them if and to the extent they amount to legitimate evidence. Failure to provide the information/documents requested by the court may trigger criminal consequences on the part of the relevant Competition Authority official(s).

Turkey is party to the HCCH Convention on the Taking of Evidence Abroad in Civil and Commercial Matters 1970 (Hague Evidence Convention), together with bilateral treaties with many other countries on similar matters. Subject to the terms and conditions of the applicable conventions and treaties, the competent authorities (Turkish courts and/or the Competition Authority, as the case may be) may be required to provide information/documents, if the court were to seek judicial assistance under the applicable convention/treaty.

Foreign submissions and domestic discovery

Subject to the terms and conditions of the applicable conventions and treaties, a Turkish court can seek judicial assistance to request information and/or documents from the competent authority in the foreign jurisdiction.

 

Inter-agency co-operation

17. Does the regulatory authority in your jurisdiction co-operate with regulatory authorities from other jurisdictions in relation to leniency? If so, what is the legal basis for and extent of co-operation?

Article 43 of Decision No. 1/95 of the EC–Turkey Association Council (Decision No. 1/95) authorises the Turkish Competition Authority to notify and request the European Commission to apply relevant measures if the Competition Board believes that cartels organised in the European Union adversely affect competition in Turkey. The provision grants reciprocal rights and obligations to the parties (the EU and Turkey), and therefore the European Commission has the authority to request that the Competition Board apply relevant measures to restore competition in the relevant markets. There are also a number of bilateral co-operation agreements between the Turkish Competition Authority and the competition agencies in other jurisdictions (for example, Romania, Korea, Bulgaria, Portugal, Bosnia-Herzegovina, Russia, Croatia and Mongolia) on cartel enforcement matters. The Turkish Competition Authority also faces various issues where international cooperation is required. In this respect, there have been various decisions of the Competition Authority in which the Competition Authority has requested cooperation on dawn raids, information exchange, notifications and collection of monetary fines from the competition authorities in other jurisdictions via the Ministry of Foreign affairs and the Ministry of Justice. The Competition Authority has, however, been unsuccessful in these requests.

 

Proposals for reform

18. Are there any proposals for reform?

The Draft Competition Law, which was issued by the Turkish Competition Authority in 2013 and officially submitted to the Presidency of the Turkish Parliament on 23 January 2014, is now null and void following the beginning of the new legislative year of the Turkish Parliament. At this stage, it remains unknown whether the new Turkish Parliament or the government will renew the draft law. However, it is anticipated that the main topics to be held in the discussions on the potential new draft competition legislation will not significantly differ from the changes that were introduced by the previous draft.

 

Online resources

Turkish Competition Authority (Rekabet Kurumu)

W www.rekabet.gov.tr

Description. The official authority for enforcing the cartel prohibition and other provisions of the Competition Law in Turkey is the Competition Authority.

The updated versions of the laws, publications, latest board announcements, decisions, work principles of the Competition Board and general information about Competition Authority procedures can be obtained from the website. This information, except for Competition Board decisions, can be accessed in English.



The regulatory authority

Turkish Competition Authority (Rekabet Kurumu)

Head. Prof dr Nurettin Kaldırımcı (The Presidency of the Turkish Competition Authority)

Contact details.Üniversiteler Mahallesi 1597. Cadde No: 9 Bilkent 06800 Ankara
T +90 312 291 44 44
F +90 312 266 79 20
E webmaster@rekabet.gov.tr
W www.rekabet.gov.tr

Responsibilities. Prevent agreements, decisions and practices preventing, distorting or restricting competition in markets for goods and services, and the abuse of dominance by the undertakings dominant in the market, and to ensure the protection of competition by performing the necessary regulations and supervisions to this end.

Person/department to apply to. Rekabet Kurumu, Üniversiteler Mahallesi 1597, Cadde No. 9 Bilkent Çankaya 06800/ANKARA

rek@rekabet.gov.tr

Procedure for obtaining application documents. Applications can be made in person, via email, fax or phone, orally or in writing.



Contributor profiles

Gönenç Gürkaynak, Managing Partner

ELIG, Attorneys-at-Law

T +90 212 327 1724
F +90 212 327 1725
E gonenc.gurkaynak@elig.com
W www.elig.com

Qualified. Istanbul, 1997; New York, 2001; England and Wales, 2004 (non-practising)

Areas of practice. Competition law; regulated markets; mergers and acquisitions; general corporate; EU law.

Recent transactions

  • Represented Coca-Cola Satış ve Dağıtım A.Ş. in an investigation launched by the Competition Authority as a result of the preliminary inquiry related to the claims that Coca-Cola made exclusive agreements with some sale points in various cities in Turkey.
  • Represented Deutsche Bahn Group of companies (Schenker & Co AG, Schenker A.E., Schenker Arkas Nakliyat ve Ticaret A.Ş. and Fertrans AG) in an investigation conducted by the Turkish Competition Authority against nine companies active in the railway freight forwarding services market.
  • Filing merger notification with the Competition Board for the acquisition of sole control of SABMiller plc. by Anheuser-Busch In Bev.

Languages. English, French

Professional associations/memberships. Istanbul Bar (since 1997); New York Bar (since 2002); American Bar Association (since 2002); Law Society of England and Wales (since 2004); Brussels Bar (since 2004).

Publications

  • ''Most-favored-nation Clauses in Commercial Contracts: Legal and Economic Analysis and Proposal For a Guideline'', by Gönenç Gürkaynak, Esq., Ayşe Güner, Esq., Sinan Diniz and Janelle Filson, Esq., European Journal of Law and Economics, October 27, 2015.
  • ''Competition Law and Personal Data Crossing in Digital Markets'', by Gönenç Gürkaynak, Esq., Ayşe Güner, Esq., Ayşe Gizem Yaşar for Ian S. Forrester QC LL.D. A Scot without Borders, Liber Amicorum - Volume II, Concurrences Review, 2015.
  • ''Turkish Competition Authority’s Sector Inquiries: Past and Current Sector Inquiries Reviewed'', by Gönenç Gürkaynak, Esq., Ayşe Güner, Esq., and Ayşe Gizem Yaşar, The Turkish Commercial Law Review, February 2015.

Ayşe Güner

ELIG, Attorneys-at-Law

T +90 212 327 1724
F +90 212 327 1725
E ayse.guner@elig.com
W www.elig.com

Qualified. California, 2009

Areas of practice. Competition law; corporate law; commercial law; mergers and acquisitions.

Recent transactions

  • Represented Deutsche Bahn Group of companies (Schenker & Co AG, Schenker A.E., Schenker Arkas Nakliyat ve Ticaret A.Ş. and Fertrans AG) in an investigation conducted by the Turkish Competition Authority against nine companies active in the railway freight forwarding services market.
  • Merger control filing with the Competition Board for the acquisition of sole control of SABMiller plc. by Anheuser-Busch In Bev.

Languages. English, German

Professional associations/memberships. California Bar (since 2009)

Publications

  • ''Most-favored-nation Clauses in Commercial Contracts: Legal and Economic Analysis and Proposal For a Guideline'', by Gönenç Gürkaynak, Esq., Ayşe Güner, Esq., Sinan Diniz and Janelle Filson, Esq., European Journal of Law and Economics, October 27, 2015.
  • ''Competition Law and Personal Data Crossing in Digital Markets'', by Gönenç Gürkaynak, Esq., Ayşe Güner, Esq., Ayşe Gizem Yaşar for Ian S. Forrester QC LL.D. A Scot without Borders, Liber Amicorum - Volume II, Concurrences Review, 2015.
  • ''Turkish Competition Authority’s Sector Inquiries: Past and Current Sector Inquiries Reviewed'', by Gönenç Gürkaynak, Esq., Ayşe Güner, Esq., and Ayşe Gizem Yaşar, The Turkish Commercial Law Review, February 2015.

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