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Trends and climate
Have there been any recent changes to the cartel regime? If so, have they had a significant impact on enforcement activity?
Recent changes to the Turkish cartel regime include the publication of:
- the new Block Exemption Communique on Vertical Agreements and Concerted Practices in the Motor Vehicle Sector (2017/3); and
- the Block Exemption Communique on R&D Agreements of March 16 2016, which overhauled the Block Exemption Communique on Specialisation Agreements of July 26 2013.
Are there any proposals to reform or amend the existing cartel regime?
Have there been any recent key cases?
Although the Turkish Competition Board has not issued many recent precedents involving the imposition of administrative fines due to restrictive agreements or concerted practices pursuant to Article 4 of the Law on the Protection of Competition (4054) (the Competition Law), the board recently levied an administrative fine in an investigation launched against 13 financial institutions – including local and international banks – active in the corporate and commercial banking markets in Turkey (November 28 2017, 17-39/636-276). The main allegations concerned the exchange of competitively sensitive information on loan conditions (eg, interest and maturity) regarding current loan agreements and other financial transactions. After 19 months of in-depth investigation, the board unanimously concluded that Bank of Tokyo-Mitsubishi UFJ Turkey AŞ (BTMU), ING Bank AŞ (ING) and the Royal Bank of Scotland Plc Merkezi Edinburgh İstanbul Merkez Şubesi (RBS) violated Article 4 of the Competition Law. In this respect, the board imposed an administrative fine on ING and RBS in the amount of TL21.1 million and TL66,400, respectively, over their annual turnover in the 2016 financial year. However, the board resolved that BTMU would not face an administrative fine pursuant to its leniency application, under which it was granted full immunity, while also relieving the other investigated undertakings from administrative fines.
With regard to the main investigations initiated in 2017, the board initiated an investigation of six undertakings operating in the field of preparing chemotherapy medicine to decide whether they violated Article 4 of the Competition Law.
In addition, the board launched an investigation of 19 undertakings operating in the field of chicken meat production and the Poultry Meat Producers and Breeders Association. The investigation was initiated upon an application claiming that these undertakings had violated Article 4 of the Competition Law.
Which legislation applies to cartels and what are the relevant substantive provisions?
The Competition Law of December 13 1994 applies to cartels. The applicable provision for cartel-specific cases is Article 4, which establishes the basic principles of cartel regulation.
Article 4 of the Competition Law is akin to and closely modelled on Article 101(1) of the Treaty on the Functioning of the European Union. It prohibits all agreements between undertakings, decisions by associations of undertakings and concerted practices that have (or may have) as their object or effect the prevention, restriction or distortion of competition within a Turkish product or services market or a part thereof. Article 4 does not define a cartel, but prohibits all forms of ‘restrictive agreement’, which includes any form of cartel agreement.
Which bodies are the relevant regulatory and prosecutory authorities and what are their specific roles?
The Turkish Competition Authority is the national authority for investigating cartel matters. It has administrative and financial autonomy and consists of the Competition Board, the presidency and service departments. The Competition Authority’s five technical divisions and the presidency are assisted by:
- a research department;
- a leniency unit;
- a decisions unit;
- an information management unit;
- an external relations unit; and
- a strategy development unit.
The Competition Board is responsible for investigating and condemning cartel activity, among other things. It consists of seven independent members.
Are there any sectoral regulators with concurrent powers?
Does the legislation apply to both formal agreements and informal practices?
Restrictive agreements that do not benefit from the block exemption or an individual exemption issued by the Competition Board are covered by the prohibition in Article 4 of the Competition Law.
A number of horizontal restrictive agreements – such as price fixing, market allocation, collective refusals to deal (ie, group boycotts) and bid rigging – have consistently been deemed to be illegal.
The Turkish antitrust regime also condemns concerted practices and the Competition Authority shifts the burden of proof in connection with concerted practice allegations through a mechanism called ‘the presumption of concerted practice’. A concerted practice is a form of coordination without a formal agreement or decision, by which two or more companies come to an understanding to avoid competing with each other. The coordination need not be in writing. It is sufficient that the parties have expressed their joint intention to behave in a particular way (eg, by way of a meeting, a telephone call or an exchange of letters).
Does the legislation apply to individuals, companies or both?
The Competition Law applies both to undertakings and associations of undertakings. An ‘undertaking’ is defined as a single integrated economic unit capable of acting independently in the market to produce, market or sell goods and services.
Does the legislation subject companies to civil liability, criminal liability or both?
The penalties imposed under the Competition Law are administrative in nature. Therefore, the Competition Law can lead to administrative fines (and civil liability), but not criminal penalties. That said, some cases have had to be referred to a public prosecutor after the Competition Law investigation has been completed.
Does the legislation subject individuals to civil liability, criminal liability or both?
Administrative penalties may also apply to individuals if they engage in business activities as an undertaking. Similarly, penalties for cartel activities may also apply to individuals acting as employees, board members or executive committee members of an infringing entity if such individual had a determining effect on the creation of the violation.
Cartel conduct will not result in the imprisonment of the individuals implicated therein unless the investigated act is criminally prosecutable conduct, such as bid-rigging in public tenders or illegal price manipulation.
Where cartel conduct is punishable by both civil and criminal penalties, can the enforcement authority pursue both types of penalty? How does the authority decide which penalties to seek?
Are there any sector-specific offences or exemptions?
There are no industry-specific offences or defences. The Competition Law applies to all industries without exception. Nonetheless, there are sector-specific antitrust exemptions. The prohibition on restrictive agreements and practices does not apply to agreements that benefit from a block exemption or an individual exemption (or both) issued by the Competition Board. The applicable block exemption rules are:
- the Block Exemption Communique 2002/2 on Vertical Agreements;
- the Block Exemption Communique 2017/3 on Vertical Agreements and Concerted Practices in the Motor Vehicle Sector;
- the Block Exemption Communique 2008/3 for the Insurance Sector;
- the Block Exemption Communique 2008/2 on Technology Transfer Agreements;
- the Block Exemption Communique 2013/3 on Specialisation Agreements; and
- the Block Exemption Communique 2016/5 on Research and Development Agreements.
To what extent, if any, does the legislation apply to extraterritorial conduct?
Turkey is an ‘effect theory’ jurisdiction (ie, it follows the principle of objective territoriality) where the main concern is whether cartel activity has affected Turkish markets, regardless of:
- the nationality of the cartel members;
- where the cartel activity took place; or
- whether the members have a subsidiary in Turkey.
The Competition Board has refrained from declining jurisdiction over non-Turkish cartels or cartel members in the past, unless they had an effect on Turkish markets. However, the board is yet to enforce monetary or other penalties against firms located outside Turkey and without any presence therein, mostly due to enforcement restrictions (eg, difficulties of formal service).
Initiating an investigation
Who can initiate an investigation of potential cartel conduct?
The Competition Board is entitled to launch an investigation into alleged cartel activity ex officio or in response to a notice or complaint. A notice or complaint may be submitted verbally or through a petition. The board may reject a notice or complaint if it deems that it is not serious. A notice or complaint is deemed to be rejected if the board remains silent on the matter for 60 days. The board will decide to conduct a pre-investigation if it finds that the notice or complaint is serious.
If an investigation is initiated by complainants or third parties, what rights (if any) do they have?
The complainants can attend the oral hearing if they make a written request within the period determined by the Competition Board. Third parties can attend the oral hearing by submitting a petition and presenting information and documents that show their interest in the subject of the oral hearing. Further, the complainants and other third parties have a right to access the file under Communique 2010/3 on the Regulation of Right of Access to Files and the Protection of Commercial Secrets.
What obligations does a company have on learning that an investigation has commenced?
A company must provide all necessary information requested by the Competition Board within the period determined by the Competition Authority.
What obligations does a company have if it believes that an investigation is likely?
The Competition Law provides no specific rules regarding a company’s obligations for a potential investigation.
What are the potential consequences of failing to act or delaying action?
The Competition Board may request all information that it deems necessary from public institutions and organisations, undertakings and trade associations. Officials of these bodies must provide the necessary information within the period fixed by the board. Failure to comply with a decision ordering the presentation of information may lead to the imposition of a turnover-based fine of 0.1% of Turkish turnover generated in the financial year preceding the date of the fining decision (if this is not calculable, Turkish turnover generated in the financial year nearest the date of the fining decision will be used). The minimum fine to be applied in such cases is TL21,036 for the year 2018. In cases where incorrect or incomplete information has been provided in response to a request for information, the same penalty may be imposed. Similarly, a refusal to grant the Competition Authority access to business premises may lead to fines of 0.5% of Turkish turnover generated in the financial year preceding the date of the fining decision.
Formal stages of investigation
What are the formal stages of and approximate timeframe for investigations?
The Competition Board will conduct a pre-investigation if it finds a notice or complaint serious. At this preliminary stage, the undertakings concerned are not notified that they are under investigation, unless there is a ‘dawn raid’ (ie, an unannounced on-site inspection).
The Competition Authority's experts’ preliminary report is submitted to the Competition Board 30 days after a pre-investigation decision is undertaken. The Competition Board will then decide, within 10 days from the receipt of the preliminary report, whether to launch a formal investigation. If the board decides to initiate an investigation, it will send a notice to the undertakings concerned within 15 days.
The investigation must be completed within six months. If deemed necessary, the board can extend this period once for up to six months. The investigated undertakings have 30 days from the formal service of the notice to prepare and submit their first written defence.
Subsequently, the Competition Authority issues its main investigation report. Once the main investigation report is served on the defendants, they have 30 days to respond, which is extendable for a further 30 days (ie, a second written defence). The investigation committee then has 15 days to prepare an opinion concerning the second written defence (an additional opinion). The defending parties have another 30 days to reply to the additional opinion (ie, a third written defence). When the parties' responses to the additional opinion are served on the Competition Authority, the investigation process is completed.
An oral hearing may be held on the parties' request. The Competition Board can also decide ex officio to hold an oral hearing. Oral hearings are held between 30 and 60 days following the completion of the investigation process.
The Competition Board renders its final decision within:
- 15 days from the hearing if an oral hearing is held; or
- 30 days from the completion of the investigation process if no oral hearing is held.
It usually takes around six to eight months from the announcement of the final decision for the Competition Board to issue a reasoned decision.
What investigative powers do the authorities have?
Article 15 of the Competition Law authorises the Competition Board to conduct dawn raids. Accordingly, the board is entitled to:
- examine the books, paperwork and documents of undertakings and trade associations and, if necessary, make copies;
- request undertakings and trade associations to provide written or verbal explanations on specific topics;
- conduct on-site investigations with regard to any asset of an undertaking; and
- examine computer records, including, but not limited to, deleted items.
Under the Competition Law, employees can be compelled to give verbal testimony, but case handlers can permit a delay in providing an answer if there is a quick written follow-up correspondence. Therefore, in practice, employees can avoid providing answers on issues which are uncertain to them, provided that a written response is submitted within a mutually agreed time.
What is the geographic reach of public enforcement actions?
Turkey is an ‘effect theory’ jurisdiction. This means that the effect that a cartel activity has on Turkish markets is what matters and not:
- the nationality of the cartel members;
- where the cartel activity took place; or
- whether the members have a subsidiary in Turkey.
When is court approval required to invoke these powers?
The Competition Law provides the Competition Authority with comprehensive authority regarding dawn raids. Judicial authorisation is obtained by the Competition Board only if an undertaking refuses to allow the dawn raid. Otherwise, the Competition Authority needs no judicial authorisation to use its powers.
Are searches of business and personal premises authorised? If so, which bodies carry out searches and will they wait for legal advisers to arrive?
Officials conducting an on-site investigation must have a deed of authorisation from the Competition Board. The deed of authorisation must specify the subject and purpose of the investigation. Inspectors cannot exercise their investigative powers in matters beyond the scope of the investigation (which is detailed in the deed of authorisation).
At the site of a dawn raid, the Competition Authority’s staff is not obliged to wait for a lawyer to arrive. However, staff usually agree to wait for a limited time for a lawyer to arrive, but may impose certain conditions in the meantime (eg, sealing file cabinets or prohibiting email communications).
What level of cooperation with the authorities is required and what are the consequences for failing to cooperate?
The Competition Board may request information that it deems necessary from public institutions and organisations, undertakings and trade associations. Officials from these bodies must provide the necessary information within the period fixed by the board. Failure to comply with a decision ordering the presentation of information may lead to a turnover-based fine of 0.1% of the Turkish turnover generated in the financial year preceding the date of the fining decision (if this is not calculable, the Turkish turnover generated in the financial year nearest the date of the fining decision will be used). The minimum fine is TL21,036 for 2018. In cases where incorrect or incomplete information has been provided in response to a request for information, the same penalty may be imposed.
Is in-house legal advice or attorney work product protected by the law of privilege? Does this extend to the advice of in-house counsel?
In Sanofi Aventis (April 20 2009, 09-16/374-88), the Competition Board indirectly recognised that the principles adopted by the European Court of Justice in AM&S Europe v European Commission (Case 155/79  ECR 1575) could apply to attorney-client privileged documents in Turkish enforcement in future. In CNR/NTSR (August 20 2014, 14-29/496-262), the Competition Board took another major step forward. It elaborated in detail the privilege rules applied by the European Court of Justice and tacitly concluded that the same rules would apply in Turkish antitrust enforcement. More recently, the Competition Board discussed the basic principles of legal professional privilege, considering its definition, scope, enforcement and boundaries in Dow (December 2 2015, 15-42/690-259) and Enerjisa (December 6 2016, 16-42/686-314). Correspondence with an independent attorney (ie, an attorney without an employment relationship with his or her client) falls under the scope of attorney-client privilege and will be protected.
Are any other limitations imposed on investigatory powers in order to safeguard the rights of those under investigation?
What is the process for objecting to an authority’s exercise of its claimed powers?
Competition Board decisions, including authorisation for officials conducting an on-site investigation, can be submitted to judicial review before the administrative courts by filing suit within 60 days. Following legislative changes in 2014, administrative litigation cases will be subject to judicial review before the newly established (2016) regional courts (appellate courts). The new legislation has created a three-level appellate court system consisting of administrative courts, regional courts (appellate courts) and the Council of State.
Publicity and confidentiality
What information about investigations will be made publicly available and at which stage(s) of the process?
The Competition Board’s reasoned decisions are published on the Competition Authority's website after confidential business information has been redacted.
Communique 2010/3 on Regulation of Right of Access to Files and the Protection of Commercial Secrets is the main legislation regulating the protection of commercial information.
Is any information automatically confidential and is confidentiality available on request?
The Competition Board can evaluate information or documents ex officio. However, the general rule is that information or documents that are not requested to be treated as confidential are accepted as such.
Undertakings must request confidentiality in writing from the board and justify their reasons for the confidential nature of the information or documents that they request to be treated as commercial secrets.
Do the authorities in your jurisdiction cooperate with authorities in other jurisdictions?
Article 43 of Decision 1/95 of the European Commission Turkey Association Council authorises the Competition Authority to notify and request the European Commission (Directorate General for Competition) to apply relevant measures if the Competition Board believes that cartels organised in the European Union have adversely affected competition in Turkey. The provision grants reciprocal rights and obligations to the parties (ie, the European Union and Turkey) and thus the European Commission has the authority to request that the Competition Board applies the necessary measures to restore competition in the relevant markets.
There are also a number of bilateral agreements between the Competition Authority and the competition agencies of other jurisdictions (eg, Romania, Korea, Bulgaria, Portugal, Bosnia and Herzegovina, Russia, Croatia and Mongolia) on cartel enforcement matters. The authority also has close ties with the Organisation for Economic Cooperation and Development, the United Nations Conference on Trade and Development, the World Trade Organisation, the International Competition Network and the World Bank.
Do the relevant enforcement authorities request waivers so as to allow for increased cooperation with authorities in other jurisdictions? What are the consequences of declining to grant a waiver?
There is no regulation under the Competition Law on restricting or supporting international cooperation regarding extradition or extraterritorial discovery.
How is a cartel investigation resolved? Are settlements, plea bargains or other negotiated resolutions available?
The Competition Board does not enter into plea bargain arrangements. A mutual agreement on other liability matters (which would take the form of an administrative contract) has also not been tested in Turkey.
What is the process for negotiating a settlement, plea bargain or other negotiated resolution? Do such resolutions require court or other approval?
If a settlement is not reached, what is the procedure for adjudicating a charge of cartel conduct?
As the competent body of the Competition Authority, the Competition Board is responsible for investigating and condemning cartel activity, among other things.
Which party must prove its case? What is the relevant standard of proof?
To prove that an undertaking has participated in cartel activities, it must be proved that:
- there was cartel activity; and
- the particular undertaking was a participant (in the case of multilateral discussions or cooperation).
With a broadening interpretation of the Competition Law and especially the ‘object or effect of which’ rationale, the Competition Board has established an extremely low standard of proof concerning cartel activity. The Competition Law includes a ‘presumption of concerted practice’, which enables the Competition Board to engage in an Article 4 enforcement in cases where price changes in the market or the supply and demand equilibrium or fields of activity of enterprises bear a resemblance to those in markets where competition is obstructed, disrupted or restricted. Turkish antitrust precedents recognise that conscious parallelism is a rebuttable of evidence of forbidden behaviour and constitutes sufficient grounds to impose fines on the undertakings concerned.
Is there a hearing? If so, what is the process for submitting evidence and testimony?
An oral hearing may be held on the request of the parties. The Competition Board may also decide ex officio to hold an oral hearing. Oral hearings are held between 30 and 60 days following the completion of the investigation process under the provisions of Communique 2010/2 on Oral Hearings before the Competition Board.
Pursuant to the Article 11 of Communique 2010/2, parties must submit all types of evidence that will be used during the oral hearing to the Competition Board at the latest seven days before the oral hearing; evidence not submitted within that period cannot be used during the oral hearing.
What are the accused’s procedural rights?
Accused companies can appeal Competition Board decisions, including decisions on interim measures and fines, before the administrative courts under the appeal process. Further, court decisions in private suits are appealable before the Supreme Court of Appeals.
What is the appeal process?
Competition Board decisions, including decisions on interim measures and fines, can be submitted for judicial review before the Ankara administrative courts by filing an appeal case within 60 calendar days of the parties’ receipt of the board’s reasoned decision. As per Article 27 of the Administrative Procedural Law, filing an administrative action does not automatically stay the execution of the board’s decision. However, on the plaintiff’s request, the court may stay the execution of the decision if its execution is likely to cause serious and irreparable damage and the decision is likely to be against the law (ie, a prima facie case).
A judicial review before the Ankara administrative courts usually takes 12 months. If the challenged decision is annulled in full or in part, the administrative court returns it to the Competition Board for review and reconsideration.
Following recent legislative changes, administrative litigation cases (and private litigation cases) are now subject to judicial review before the newly established regional courts (appellate courts), creating a three-level appellate court system consisting of administrative courts, regional courts and the Council of State. The regional courts go through the case file on procedural and substantive grounds and make their decision considering the merits of the case. The regional courts’ decisions will be considered as final. The regional court decision will be subject to the Council of State’s review in exceptional circumstances. In such cases, the regional court decision will not be considered final and the Council of State may decide to uphold or reverse the regional court’s decision. If the decision is reversed by the Council of State, it will be returned to the deciding regional court, which will in turn issue a new decision which considers the Council of State’s decision.
To what extent can the appeal body review the agency’s findings of fact, legal assessment and penalties?
The judicial review of the Competition Board’s decisions before the administrative courts is conducted pursuant to administrative law principles. Ankara administrative courts examine whether the Competition Board’s decision complies with the law in terms of:
- subject matter;
- jurisdiction; and
In other words, Ankara administrative courts will review only whether there was any irregularity or non-compliance on the Competition Board’s part regarding these elements. Ankara administrative courts cannot give their own judgment on the merits of the case.
Penalties for companies
What are the potential penalties for companies involved in a cartel?
The penalties that can be imposed under the Competition Law are administrative in nature. Therefore, the Competition Law leads to administrative fines (and civil liability), but no criminal penalties.
In cases of proven cartel activity, the undertakings concerned will be separately subject to fines of up to 10% of their turnover generated in Turkey in the financial year before the date of the fining decision. If this is not calculable, the Turkish turnover generated in the financial year nearest the date of the fining decision will be considered.
In addition to the monetary penalty, the Competition Board is authorised to:
- take the necessary measures to terminate the restrictive agreement;
- remove all de facto and legal consequences of every action that has been taken unlawfully; and
- take all other measures necessary to restore the level of competition and status to that existing before the infringement.
The Competition Board can take interim measures until the final resolution on the matter in cases where there is a possibility of serious and irreparable damages.
Article 9 of the Competition Law, which generally entitles the Competition Board to order structural or behavioural remedies to restore the status quo, sometimes operates as a conduit through which infringement allegations are settled before a full-scale investigation is launched. This can be established only by:
- a diligent review of the relevant implicated businesses to identify the problems; and
- adequate professional coaching in eliminating all competition law issues and risks.
In cases where the infringement was too far advanced to be subject to an Article 9 warning only, the Competition Board found a mitigating factor in the fact that the entities immediately took measures to cease any wrongdoing and remedy the situation where possible.
Are there guidelines in place for penalties? If not, how are penalties normally calculated?
The Regulation on Fines sets out detailed guidelines as to the calculation of monetary fines applicable in the case of an antitrust violation. According to the Regulation on Fines, fines are calculated by first determining the basic level, which in the case of cartels is between 2% and 4% of the company’s Turkish turnover in the financial year preceding the date of the fining decision. If this is not calculable, the Turkish turnover for the financial year nearest the date of the decision is used. Aggravating and mitigating factors are then factored in. The Regulation on Fines also applies to managers or employees who had a determining effect on the violation (eg, participating in cartel meetings and making decisions that would involve the company in cartel activity) and provides for certain reductions in their favour.
Do the authorities take into account any penalties imposed in other jurisdictions?
How can a company mitigate its exposure to fines?
According to the Regulation on Fines, a party’s cooperation is a mitigating factor that the Competition Board can consider when determining the size of fine to be imposed. In such a case, if mitigating circumstances are established by the perpetrator, the fine would be decreased by 25% to 60%.
Penalties for individuals
What are the potential penalties for individuals involved in a cartel?
Penalties may also apply to individuals if they engage in business activities as an undertaking. Similarly, penalties for cartel activity may also apply to individuals acting as the employees, board members or executive committee members of infringing entities if such individuals had a determining effect on the creation of the infringing activity.
Accordingly, employees or executive body members of undertakings or associations of undertakings who had a determining effect on the infringing activity may also be fined up to 5% of the fine imposed on the undertaking or association of undertakings.
Cartel conduct will not result in imprisonment of individuals implicated unless the infringing activity amounts to criminally prosecutable conduct, such as bid-rigging in public tenders or illegal price manipulation. Employees or managers of an offending company may face criminal liability, even in cases where the company benefits from immunity or leniency.
Do the authorities take into account any penalties imposed in other jurisdictions?
Is a company permitted to pay a penalty imposed on its employee?
Yes. It is advisable to seek separate tax or bookkeeping advice before a company pays the legal costs or penalties imposed on its employee.
Is a company permitted to continue to employ an employee involved in cartel conduct?
The Competition Law provides no specific rules regarding whether a company can continue to employ an employee involved in cartel conduct. As such, there is no barrier in that regard under the general principles of Turkish contract or labour law.
Private damages actions
Can private actions for damages be brought in your jurisdiction? If so, who may assert such actions?
A cartel matter is primarily adjudicated by the Competition Board. Enforcement is also supplemented by private suits. In private suits, cartel members are adjudicated before the regular courts.
One of the most distinctive features of the Turkish competition law regime is that it provides for suits for treble damages. Any party that suffers damages due to actions contrary to antitrust laws can sue the infringing party for three times the value of the damages suffered plus litigation costs and attorney’s fees.
What relief may be awarded to successful claimants (eg, damages, costs, injunctive relief or attorneys’ fees)?
As above, any party that suffers damages due to actions contrary to antitrust laws can sue the infringing party for three times the value of the damages suffered plus litigation costs and attorney’s fees.
How are the amounts of any damages, costs or attorneys’ fees calculated?
Article 58 of the Competition Law determines how to calculate the amount of any damages suffered. Parties that suffer as a result of the prevention, distortion or restriction of competition may claim as damages the difference between the cost that they paid and the cost that they would have paid if competition had not been restricted.
Have there been any notable recent cases in which a private action was the subject of adjudication?
Antitrust-based private lawsuits are rare, but increasing in practice. The majority of private lawsuits in Turkish antitrust enforcement rely on refusal to supply allegations. Civil damage claims have usually been settled among the parties involved before the court has rendered its judgment.
Can class actions be brought in your jurisdiction? If so, what is the procedure for such cases?
Turkish procedural law denies any class action or procedure.
Immunity and leniency
Immunity and leniency programmes
Is an immunity and leniency programme available for companies? If so, how does it operate?
Yes. The Regulation on Active Cooperation for the Discovery of Cartels (the Leniency Regulation) provides the main principles of available immunity and leniency programmes. The leniency programme is available only for cartel participants. A cartel participant can 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 the undertakings and its employees or managers, with the exception of the cartel ringleader, who can only benefit from a second-degree fine reduction.
Can the enforcement authority decline or withdraw leniency? If so, on what basis?
Although the relevant legislation does not set out rules on declining and withdrawing leniency, the Guidelines on the Clarification of the Regulation on Leniency (the Leniency Guidelines) state that the Competition Authority may decline a total immunity application if it already has enough evidence proving the cartel. However, the authority would consider the application as a request for a fine reduction.
Are there benefits for cooperators that do not qualify for immunity? If so, how are these benefits determined?
The first firm to file an appropriately prepared application for leniency may benefit from total immunity. The second firm to file an appropriately prepared application will receive a fine reduction of between 33% and 50%. The third applicant will receive a 25% to 33% fine reduction. Subsequent applicants will receive a 16% to 25% fine reduction.
Further, according to the Regulation on Fines, a party’s cooperation is a mitigating factor that the Competition Board can consider when determining the size of fine to be imposed. In such a case, if mitigating circumstances are established by the infringing party, the fine would be decreased by 25% to 60%.
What benefits (if any) are available for employees and former employees of a company that seeks leniency?
Employees of a cartel member also benefit from the leniency or immunity granted to the company.
Is an immunity or leniency programme specifically available for individuals? If so, how does it operate?
Individuals who perform an economic activity and act as an undertaking within the meaning of competition law can also benefit from a leniency programme if they take part in a cartel. Immunity or a leniency programme for these individuals would not differ from the abovementioned immunity and leniency programme for companies.
Have there been any notable recent cases in which a leniency application was the subject of adjudication?
The Competition Board’s most important recent decision regarding leniency applications was rendered in an investigation launched against 13 financial institutions – including local and international banks – active in the corporate and commercial banking markets in Turkey (November 28 2017, 17-39/636-276). The main allegations concerned the exchange of competitively sensitive information on loan conditions. To that end, the Competition Board resolved that Bank of Tokyo-Mitsubishi UFJ Turkey AŞ (BTMU) would not face an administrative fine pursuant to its leniency application, granting full immunity to BTMU – which had violated Article 4 of the Competition Law – while also relieving the other investigated undertakings from administrative fines.
Another significant decision of the Competition Board regarding leniency applications is Fresh Yeast (14-42/738-346, October 22 2014), which concerned four undertakings operating in the fresh yeast market. The board launched an investigation into four fresh yeast producers to determine whether they had violated Article 4 of the Competition Law by colluding to set the price of fresh yeast. Mauri Maya made a leniency application on May 27 2013 following the pre-investigation phase and dawn raids in order to benefit from Article 4 of the Leniency Regulation. The board resolved that the investigated companies had violated Article 4 and imposed a monetary fine on three of them and granted full immunity to Mauri Maya by virtue of the added value and sufficient content of its leniency application. Fresh Yeast serves as a landmark case, as it is the first instance in which the board granted immunity following dawn raids.
Is immunity from criminal prosecution available? If so, how and under what conditions is immunity granted?
What is the procedure for a leniency application?
In order to benefit from immunity or a reduction in administrative fines, the applicant must make a leniency application:
- before the opening of a preliminary investigation; or
- after the preliminary investigation has opened, but before an investigation report is officially served.
What is the typical timeframe for consideration of a leniency application?
The Leniency Regulation and the Leniency Guidelines do not refer to timeframes for Competition Board decisions on leniency applications. However, the board should decide on a leniency application before an investigation is completed.
What information and evidence is required?
Pursuant to the Leniency Regulation, in order for a cartel member to benefit from immunity or a fine reduction, the applicant must submit:
- information on the products affected by the cartel;
- information on the duration of the cartel;
- the names of the cartelists;
- the dates and locations of and participants in the cartel meetings; and
- additional information or documents about the cartel activity.
What information and evidence is disclosed to subjects of the investigation other than the leniency applicant?
Turkish courts can subpoena documents or information from public or private authorities and bodies, including the Competition Authority. The authority is constitutionally required to submit all information or documents requested by a Turkish court. Information or documents submitted as part of a leniency application can be subject to discovery orders in Turkish courts, which can consider if and to the extent that they amount to legitimate evidence. Failure to provide the information or documents requested by the court may trigger criminal consequences for the relevant Competition Authority officials.
Turkey is party to the Hague Conference on the Taking of Evidence Abroad in Civil and Commercial Matters 1970 and bilateral treaties with many other countries on similar matters. Subject to the terms and conditions of the applicable conventions and treaties, the competent authorities (ie, the Turkish courts or the Competition Authority, as the case may be) may be required to provide information or documents if the court seeks judicial assistance under the applicable convention or treaty.
What level of cooperation is required from applicants?
Applicants must submit all information and documents required. The required information may be submitted verbally. Admission of actual price effect is not a required element of a leniency application. Applicants must avoid concealing or destroying information or documents concerning the cartel activity. Unless the Leniency Division decides otherwise:
- applicants must cease taking part in the cartel; and
- applications must be kept confidential until the investigation report has been served.
Applicants must continue to cooperate with the Competition Authority actively until the final decision on the case has been rendered. Further, applicants must:
- present any new documents to the authority as soon as they are discovered;
- cooperate with the authority on additional information requests; and
- avoid statements that are contradictory to the documents submitted as part of the leniency application.
What confidentiality protection is offered to applicants?
As per Articles 6 and 9 of the Leniency Regulation, unless stated otherwise by the authorised division, the principle is to maintain the confidentiality of the leniency application until the notification of the investigation report. Nonetheless, if the confidentiality of the investigation will not be at risk, the applicants can provide information to other competition authorities, institutions, organisations and auditors.
Alternatively, the Competition Authority may keep the identity of the leniency applicant confidential until the service of the investigation report.
Can the company apply for a marker? If so, under which conditions?
Yes. Leniency is also available for markers. Although the Leniency Regulation provides no detailed principles on the marker system, the Competition Authority can grant a comity period to applicants to submit the necessary information and evidence. For an applicant to be eligible for a preparatory period, it must provide, at a minimum, information concerning:
- the affected products;
- the duration of the cartel; and
- the names of the parties concerned.
A document showing the date and time of the application and requesting time to prepare the required information and evidence will be given to the applicant by the assigned unit.