New development
The Turkish Competition Authority (“TCA“) published its 2023 Annual Report (“Report“) on its official website on August 13, 2024. The full Report is available here. The Report provides an overview of the TCA’s activities in 2023.
In the foreword of the Report, it is underlined that there was an increase in the number of competition violation cases concluded by the Turkish Competition Board (“TCB“) in 2023 compared to the previous year, and that the consumer welfare-oriented approach followed by the TCB since 2020 has predominantly manifested itself in its 2023 activities. As a result, the Report provides that the food industry was among the top 3 sectors that were subject to the most competition violation investigations in 2023.
In addition, the Report’s foreword states that 2023 was a very important year in terms of labor markets. The Report emphasized that, in the investigation related to the labor market concluded in 2023, no-poaching agreements were defined as cartels. It was underlined that this recognition is important in terms of indicating that the TCA will not make concessions to no-poaching agreements.
Legislative Activities
In 2023, the TCA updated the Regulation on Active Cooperation for Detecting Cartels. According to the Report, there are ongoing studies on the Draft Directive on the Procedures and Principles Regarding On-Site Inspections.
Letting the Numbers Talk
Compared to 2022, the number of TCB decisions increased by approximately 8%. In fact, the TCA issued decisions for 342 cases in 2022 and 370 cases in 2023. In 2023, approximately 59% of these cases were related to M&A, 39% concerned competition law violations, and 2% were about individual exemptions and negative clearances.
- Competition Law Violations: Of the 145 decisions taken by the TCB regarding competition law violations in 2023, 117 decisions were taken at the end of the investigation process. The remainder were issued after preliminary investigations. Accordingly, it can be said that 2023 represents a significant increase compared to 2022, when the TCB decided on 78 cases, 54 of which were full-fledged investigations.
- Out of 145 cases, 121 were related to anticompetitive agreements (55 of them were between competitors, 69 were between undertakings at different levels of the supply chain (vertical), and 3 were of mixed nature) and 18 were related to abuse of dominant position and 6 were of a hybrid nature.
- The TCB rejected the allegations in 25 out of the 28 preliminary investigation files and decided that there is no need for an full-fledged investigation.
- The investigation mostly concerned 5 sectors: (i) chemicals and mining, (ii) food, (iii) machinery, (iv) automotive and vehicles, and (v) culture, arts and entertainment.
- Of the 117 investigation files, 28 were concluded with commitments, and 68 were concluded with settlement. These numbers support the Report’s assessment that the Commitment Communiqué and the Settlement Regulation, which entered into force in 2021, were effectively implemented in 2022.
- M&A: In 2023, the TCB examined 217 transactions in total, a 11% decrease compared to the 245 transactions in 2022.
- The TCB examined 217 transactions, including 139 acquisitions, 73 joint ventures, 3 privatizations and 2 mergers.
- The TCB concluded that 30 notified transactions were out of scope or not subject to clearence. In the notified transactions, the TCB unconditionally cleared 184 of these transactions, while conditionally approving 3 transactions.
- According to the Report, the TCB took 1 transaction into Phase II review. The review of this transaction is ongoing.
- The top 3 sectors in terms of M&A transactions were reported as IT and platform services, chemicals and mining, and healthcare services.
- For detailed information, you can find our legal alert on the TCA’s M&A Overview Report for 2023 here.
- Exemptions and Negative Clearances: In 2023, the TCB decided on a total of 6 exemptions and 2 negative clearance files in the automotive and vehicles; IT and platform services; banking, capital markets, finance and insurance services; and media, advertising and publishing sectors.
- The TCB finalized 4 of these decisions with individual exemption, 1 with block exemption and 1 with conditional exemption as part of the individual exemption.
Administrative Fines
The Report provides a full comparative yearly summary of the administrative monetary fines imposed on the undertakings.
- Compared to 2022, there was an increase in the amount of fines imposed in 2023. While the TCB imposed a total of TRY 1.73 billion due to competition law violations in 2022, this figure increased to TRY 1.90 billion in 2023.
- In 2023, the highest total amount of administrative fines levied in completed investigations was imposed on the food sector with TRY 792.8 million, followed by the machinery industry and the healthcare services sector.
- In 2023, the highest total amount of administrative fines was imposed on the food sector with TRY 792.8 million, followed by the machinery industry with TRY 715.2 million and the healthcare services sector with TRY 499.4 million.
- Fines for anticompetitive agreements, concerted practices, and decisions of association of undertakings amounted to approximately TRY 1.8 billion, whereas fines for abuse of dominance amounted to approximately TRY 101 million.
- Fines for false or misleading information in terms of requests for information and on-site inspections amounted to TRY 3.4 million.
- Fines for preventing or hindering on-site inspections amounted to TRY 267 million.
- The TCB imposed a total of TRY 492 million proportional administrative fines on undertakings.
Conclusion
The Report describes 2023 as a very busy and productive year, where the TCA maintained all its functions without any interruption in relation to enforcing competition rules, which constitutes its main task, and carried out its enforcement activities without any disruption. The TCA noted that, as in previous years, developments in national and international markets, relevant literature, and practices of other countries were also closely monitored. Accordingly, within the scope of the Report, it can be predicted that the TCA will be very active in the coming years, as it was in 2023, and that we will continue to see the footprints of global competition law developments and trends in Turkey.
