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The national competition agency for enforcing merger control rules in Turkey is the Turkish Competition Authority (the Authority), a legal entity with administrative and financial autonomy. The Authority consists of the Competition Board (the Board), the office of the Presidency, main service units, auxiliary service units and advisory units. As the competent decision-making body of the Authority, the Board is responsible for, inter alia, reviewing and resolving merger and acquisition notifications. The Board consists of seven members and is seated in Ankara. The main service units comprise six supervision and enforcement departments plus the decisions department, the economic analysis and research department, the information technologies department, the external relations and competition advocacy department, the strategy development department, the regulation and budget department, and the cartel and on-site inspections support divisions. There is a 'sectoral' job definition for each of the supervision and enforcement departments.

The relevant legislation on merger control comprises Law No. 4054 on Protection of Competition, which was last amended on 24 June 2020 (the Amendment Law) and Communiqué No. 2010/4 Concerning the Mergers and Acquisitions Calling for the Authorization of the Competition Board, which was last amended on 4 March 2022 (Communiqué No. 2010/4).

Communiqué No. 2022/2 on the Amendment of Communiqué No. 2010/4 on Mergers and Acquisitions Requiring the Approval of the Board (Communiqué No. 2022/2), which entered into force on 4 March 2022, introduced certain new regulations concerning the Turkish merger control regime that will fundamentally affect the notifiability analysis of merger transactions and the merger control notifications submitted to the Authority.

The Authority has also issued many guidelines to supplement and provide guidance on the enforcement of Turkish merger control rules, including:

  1. the Guideline on Market Definition, which applies, inter alia, to merger control matters. It was issued in 2008 and is closely modelled on the Commission Notice on the Definition of Relevant Market for the Purposes of Community Competition Law;2
  2. the Guideline on Undertakings Concerned, Turnover and Ancillary Restrictions in Mergers and Acquisitions, which covers certain topics and questions about the concepts of undertakings concerned, turnover calculations and ancillary restraints. It is closely modelled on Council Regulation (EC) No. 139/2004 on the Control of Concentrations between Undertakings;
  3. the Guideline on Remedies Acceptable to the Turkish Competition Authority in Mergers and Acquisitions (the Guidelines on Remedies), which is an almost exact Turkish translation of the Commission Notice on Remedies Acceptable Under Council Regulation (EC) No. 139/2004 and Under Commission Regulation (EC) No. 802/2004; and
  4. the Guidelines on Horizontal Mergers and Acquisitions (the Horizontal Guidelines) and the Guidelines on Non-Horizontal Mergers and Acquisitions (the Non-Horizontal Guidelines), which are in line with EU competition law regulations and seek to retain harmony between European Union and Turkish competition law instruments.

The Board also released the Guidelines on Merger and Acquisition Transactions and the Concept of Control, also closely modelled on the respective European Commission (EC) guidelines.

Turkey is a jurisdiction with a suspensory pre-merger notification and approval requirement. Much like the EC regime, concentrations that result in a change of control on a lasting basis are subject to the Board's approval, provided that they reach the applicable turnover thresholds. 'Control' is defined as the right to exercise decisive influence over day-to-day management or the long-term strategic business decisions of a company, and it can be exercised de jure or de facto.

Two of the most significant developments that Communiqué No. 2022/2 entails are the introduction of a threshold exemption for undertakings active in certain markets and sectors, and the increase of the applicable turnover thresholds for the concentrations that require a mandatory merger control filing before the Authority.

Communiqué No. 2022/2 does not seek a Turkish nexus in terms of the activities that render the threshold exemption. In other words, it would be sufficient for the target company to be active in the fields of digital platforms, software or gaming software, financial technologies, biotechnology, pharmacology, agricultural chemicals or health technologies anywhere in the world for the threshold exemption to become applicable, provided that the target company (1) generates revenue from customers located in Turkey, (2) conducts research and development (R&D) activities in Turkey or (3) provides services to Turkish users in any field other than those aforementioned. Accordingly, Communiqué No. 2022/2 does not require (1) revenue generated from customers located in Turkey, (2) R&D activities conducted in Turkey or (3) services provided to Turkish users concerning the fields listed above for the exemption on the local turnover thresholds to become applicable.

Concentrations relating to the fields of digital platforms, software or gaming software, financial technologies, biotechnology, pharmacology, agricultural chemicals or health technologies are expected to be scrutinised more closely by the Competition Authority.


Article 7 of Communiqué No. 2010/4, amended by Communiqué No. 2022/2, provides that a transaction will be required to be notified in Turkey if one of the following increased turnover thresholds is met (all currency conversions are based on the Turkish Central Bank's applicable average buying exchange rates for the financial year 2022):

  1. the aggregate Turkish turnover of the transaction parties exceeds 750 million Turkish lira and the Turkish turnover of at least two of the transaction parties each exceeds 250 million lira; or
  2. the Turkish turnover of the transferred assets or businesses in acquisitions exceeds 250 million lira and the worldwide turnover of at least one of the other parties to the transaction exceeds 3 billion lira, or the Turkish turnover of any of the parties in mergers exceeds 250 million lira and the worldwide turnover of at least one of the other parties to the transaction exceeds 3 billion lira.

Communiqué No. 2022/2 introduced a thresholds exemption for undertakings active in certain markets and sectors. Pursuant to Communiqué No. 2022/2, the above-mentioned 250 million lira turnover thresholds will not be sought for the acquired undertakings active in or assets relating to the fields of digital platforms, software or gaming software, financial technologies, biotechnology, pharmacology, agricultural chemicals and health technologies if they (1) operate in the Turkish geographical market, (2) conduct R&D activities in the Turkish geographical market or (3) provide services to Turkish users.

The new regulation does not seek the existence of an 'affected market' in assessing whether a transaction triggers a notification requirement, and if a concentration exceeds one of the alternative jurisdictional thresholds, the concentration will automatically be subject to the approval of the Board.

Foreign-to-foreign transactions are caught if they exceed the applicable thresholds.

Acquisition of a minority shareholding can constitute a notifiable merger if and to the extent that it leads to a change in the control structure of the target entity. Joint ventures that emerge as independent economic entities possessing assets and labour to achieve their objectives are subject to notification to and the approval of the Board. As per Article 13 of Communiqué No. 2010/4, cooperative joint ventures will also be subject to a merger control notification and analysis in addition to an individual exemption analysis, if warranted.

The implementing regulations provide for important exemptions and special rules, in particular:

  1. Article 19 of Banking Law No. 5411 provides an exception from the application of merger control rules for mergers and acquisitions of banks. The exemption is subject to the condition that the market share of the total assets of the relevant banks does not exceed 20 per cent;
  2. mandatory acquisitions by public institutions as a result of financial distress, concordat and liquidation, etc., do not require a pre-merger notification;
  3. intra-corporate transactions that do not lead to a change in control are not notifiable;
  4. acquisitions by inheritance are not subject to merger control;
  5. acquisitions made by financial securities companies solely for investment purposes do not require a notification, subject to the condition that the securities company does not exercise control over the target entity in a manner that influences its competitive behaviour; and
  6. two or more transactions carried out between the same persons or parties or within the same relevant product market by the same undertaking concerned within a period of three years are deemed a single transaction for turnover calculation purposes following the amendments introduced by Communiqué No. 2017/2. They warrant separate notifications if their cumulative effect exceeds the thresholds, regardless of whether the transactions are in the same market or sector, or whether they were previously notified.

Another exception pertains to the Turkish Wealth Fund, which was incorporated as a national wealth and investment fund company with Law No. 6741. Transactions performed by the Turkish Wealth Fund and companies established by the Turkish Wealth Fund are not subject to merger control rules.

There are also specific methods of turnover calculation for certain sectors. These special methods apply to banks, special financial institutions, leasing companies, factoring companies, securities agents, insurance companies and pension companies.

Communiqué No. 2022/2 has updated the rules that apply to the calculation of turnover of the financial institutions in accordance with the recent changes to the financial regulations. The most recent updates of Article 9 of Communiqué No. 2010/4 are as follows:

  1. for the calculation of financial institutions' turnovers, Communiqué No. 2022/2 aligns the wordings and terms in view of the applicable banking and financial regulations, excluding the term 'participation banks' and referring to the term 'banks' in general, which covers all legal forms of banks; and
  2. Communiqué No. 2022/2 updates the names and references of the relevant regulations issued by the Banking Regulatory and Supervisory Agency and the Capital Markets Board, as referred to in Article 9 of Communiqué No. 2010/4.

Failing to file or closing the transaction before the Board's approval can result in a turnover-based monetary fine, which is imposed on the acquiring party. The fine is calculated according to the annual Turkish turnover of the acquirer generated in the financial year preceding the fining decision at a rate of 0.1 per cent. In the case of mergers, the fine will apply to both merging parties. In any event, the amount of any fine imposed in 2023 will be no less than 105,688 lira. This monetary fine does not depend on whether the Authority will ultimately clear the transaction.

If, however, there truly is a risk that the transaction is problematic under the significant impediment to effective competition (SIEC) test applicable in Turkey, the Authority may launch an investigation ex officio into the transaction, order structural and behavioural remedies to restore the situation to what it was before the closing (restitutio in integrum) and impose a turnover-based fine of up to 10 per cent of the parties' annual turnover. Executive members and employees of the undertakings concerned who are deemed to have played a significant part in the violation (failing to file or closing before the approval) may also receive monetary fines of up to 5 per cent of the fine imposed on the undertakings. The transaction will also be invalid and unenforceable in Turkey.

The Board has so far consistently rejected all carve-out or hold-separate arrangements proposed by merging undertakings. Communiqué No. 2010/4 provides that a transaction is deemed to be 'realised' (i.e., closed) 'on the date when the change in control occurs'. Although the wording allows some room to speculate that carve-out or hold-separate arrangements are now allowed, it remains to be seen whether the Authority will interpret this provision in such a way. This has so far been consistently rejected by the Board, which argues that a closing is sufficient for the suspension violation fine to be imposed, and that a further analysis of whether change in control actually took effect in Turkey is unwarranted.

Year in review

Pursuant to the Merger and Acquisition Insight Report of the Authority (the Report) for 2022, the Board reviewed a total of 245 transactions during that year. The number of assessments in 2022 was higher than the average number of assessments made between 2013 and 2020. Only one transaction was cleared at Phase II and only two were conditionally cleared. The Board did not prohibit any transactions in 2022.

The Board's most important merger control decisions during the year were the following.

The Ferro/Prince Phase II review decision3 concerned the acquisition of sole control over Ferro by American Securities. The Board decided to initiate a Phase II review based on concerns that the transaction could result in a significant impediment to effective competition in the market for glass coatings for white goods in Turkey. The Board defined the affected product markets as (1) the porcelain enamel coatings market and (2) the glass coatings for white goods market. The Board noted that the transaction would not cause competitive concerns in terms of coordination-inducing effects, considering that:

  1. the shares to be acquired by the merged entity in the porcelain enamel coatings market remained below the threshold in the Horizontal Guidelines;
  2. the increase in market share of the undertaking subject to the transaction would be limited in terms of volume and value;
  3. strong competition existed in the relevant markets;
  4. there were no significant barriers to entry to the market;
  5. there were no significant barriers to switching suppliers; and
  6. producers had sufficient capacity to meet the demand for porcelain enamel coatings.

The Board analysed the market shares in the market for glass coatings for white goods for 2020 and noted that the merging undertakings were among the five largest undertakings in the market. Therefore, the Board assessed whether the possibility for undertakings to exert competitive pressure would be reduced following the merger between two of the five largest players in the market. The Board observed that (1) the market had a concentrated structure even before the transaction, (2) although there were also small suppliers in the market in addition to the five largest players, the parties to the transaction owned a large portion of the market, and (3) after the notified transaction, the market share of an important rival undertaking would be eliminated and a market structure with four players and greater concentration would emerge. The Board concluded that this could lead to a significant restriction of competition in the market. The merging parties had submitted commitments to the EC and the Board concluded that Prince would be divesting its porcelain enamel coating activities and the entire glass coatings business in Europe. The Board ultimately conditionally approved the transaction subject to the implementation of these commitments, since they also removed the horizontal overlaps between the parties in the horizontally affected markets in Turkey.

In Vinmar/Arısan,4 the Board issued a Phase II decision concerning non-compete and non-solicitation clauses. The transaction concerned the acquisition of Arısan and Transol Arısan by Vinmar Group through Veser Kimya, which would have sole control over the target group. The Board analysed the parties' fields of activity and concluded that the following activities conducted by Vinmar Group in Turkey through its subsidiaries could overlap with the activities of the target group:

  1. cosmetic chemicals (including chemicals for personal care products);
  2. household chemicals (including detergents and cleaning chemicals);
  3. food chemicals;
  4. pharmaceutical chemicals (including veterinary chemicals and active ingredients); and
  5. the sale of lubricant chemicals.

However, the Board found that the market shares of the parties in the markets with horizontal overlap were low. Moreover, the agreement included four-year non-compete and non-solicit obligations, which the parties stated reflected their mutual agreement. The parties stated that the aim was to ensure a smooth transition to the new company structure after the transaction, and that the economic benefits expected from the transaction could not be fully realised if the non-compete and non-solicit obligations had a shorter duration. The parties also stated that a high level of know-how would be transferred, and that the aim was to establish long-term commercial relationships with buyers in the speciality chemicals market. Consequently, the Board approved the transaction on the condition that the duration of non-compete and non-solicit obligations was reduced to three years, in consideration of the market structure, customer loyalty and know-how.

The approach of the Board to market shares and concentration levels is similar to that of the EC and in line with the approach enumerated in the Guidelines on the Assessment of Horizontal Mergers under the Council Regulation on the Control of Concentrations between Undertakings.5 The first factor discussed under the Horizontal Guidelines is that market shares above 50 per cent can be considered an indication of a dominant position, whereas a market share of the combined entity remaining below 20 per cent would not require further enquiry into the likelihood of harmful effects resulting from the combined entity. Although a brief mention of the Board's approach to market shares and the Herfindahl–Hirschman Index (HHI) levels is provided, the Horizontal Guidelines' emphasis on an effects-based analysis (coordinated and uncoordinated effects) without further discussion of the criteria to be used in evaluating the presence of a dominant position indicates that the dominant position analysis still remains subject to Article 7 of Law No. 4054.

Other than market share and concentration level considerations, the Horizontal Guidelines cover the following main topics:

  1. the approach of the Board to market shares and concentration levels;
  2. the anticompetitive effects that a merger would have in the relevant markets;
  3. the buyer power as a countervailing factor to anticompetitive effects resulting from the merger;
  4. the role of entry in maintaining effective competition in the relevant markets;
  5. efficiencies as a factor counteracting the harmful effects on competition that might otherwise result from the merger; and
  6. the conditions of a failing company defence.

The Horizontal Guidelines also discuss coordinated effects that might arise from a merger of competitors. They confirm that coordinated effects may increase the concentration levels and may even lead to collective dominance. As regards efficiencies, the Horizontal Guidelines indicate that efficiencies should be verifiable and that the passing-on effect should be evident.

The Non-Horizontal Guidelines confirm that non-horizontal mergers in which the post-merger market share of the new entity in each of the markets concerned is below 25 per cent, and the post-merger HHI is below 2,500 (except where special circumstances are present), are unlikely to raise competition law concerns, similar to the Guidelines on the Assessment of Non-Horizontal Mergers under the Council Regulation on the Control of Concentrations between Undertakings.6 Other than the Board's approach to market shares and concentration levels, the other two factors covered in the Non-Horizontal Guidelines include the effects arising from vertical mergers and the effects of conglomerate mergers. The Non-Horizontal Guidelines also outline certain other topics, such as customer restraints, general restrictive effects on competition in the market and restriction of access to the downstream market.

The Authority is expected to retain its well-established practice of paying close attention to developments in EU competition law and seeking to retain harmony between EU and Turkish competition law instruments.

In practice, there are indications that remedies and conditional clearances are becoming increasingly important in Turkish merger control enforcement. The number of cases in which the Board decided on divestment or licensing commitments, or other structural or behavioural remedies, has increased dramatically in recent years. Examples include some of the most important decisions in the history of Turkish merger control enforcement.7

The aim of the Authority's Guidelines on Remedies is to provide guidance on remedies that can be offered to dismiss competition law concerns regarding a particular concentration that might otherwise be deemed as problematic under the SIEC test. The Guidelines on Remedies set out the general principles applicable to the remedies acceptable to the Board, the main types of commitments that may be accepted by the Board, the specific requirements that commitment proposals need to fulfil and the main mechanisms for the implementation of such commitments.