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Investigations

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.

Investigative powers

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 [1982] 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?

Not applicable.

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.

International cooperation

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.

Decisions

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?

Not applicable.

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.

Appeal process

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;
  • form;
  • purpose;
  • jurisdiction; and
  • reason.

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. 

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