COMPETITION LAW
Prof.Dr.Huriye Kubilay
Nov.19, 2014
DEFINITION
• Competition may be defined as a situation in which
someone is trying to win something or be more
successful than someone else.
• Competition: The contest between undertakings in
markets for goods and services, which enables
them to take economic decisions freely,
• Goods: Any kind of movable or immovable
property which is the subject of trade,
Services: Physical, intellectual or combined
activities carried out in return for a cost or interest,
• Unfair Competition Laws are designed to protect
consumers and businesses alike against deceptive
business practices. Some common examples of
unfair competitive practices in commercial law
include: trademark infringements, trade
defamation, and misappropriation of business trade
secrets. As pertains to consumers, unfair
competition laws usually prevent unfair pricing
strategies, like gouging, and false or misleading
representations.
• Undertaking: In competition law, undertaking refers to natural
and legal persons who produce, market and sell goods or
services in the market, and units which can decide
independently and do constitute an economic whole. This
definition's concept of undertaking is based on "economic
activity," "independence," and "economic integration," and is
not dependent on legal nature; as such it is distinct from the
concept of undertaking as used in other legislation, which can
be substituted for the concepts of firms, company or business.
Within this framework, for instance private and public
companies as well as self-employed persons who can take
decisions concerning their economic activities independently
are regarded as undertakings in competition law, while a firm
whose every decision on economic activities is taken by the
holding it is affiliated to, a doctor or an advocate working for
a company or an institution according to a service
(employment) contract do not constitute an undertaking.
• Association of undertakings: Refers to all kinds of
associations with or without a legal personality,
which are formed by undertakings to accomplish
particular goals. Typical examples of associations of
undertakings are associations where undertakings
are represented by natural persons. Similarly,
chambers of industry and commerce, professional
chambers, unions and bars are regarded as
associations of undertakings.
• According to Article 195 (5), TCC,
ascendant/dominant undertaking (holding
company) is deemed merchant.
http://www.inal-law.com/pdf/Inal-
Memo%20on%20Group%20Companies%20under%20New%20TCC.pdf
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The new Turkish Commercial Code No. 6102 (“NTCC”), which
came into force on 1 July 2012, contains a whole new section of
nearly 25 articles on group companies that was not present in the
former code.
As it is further elaborated below, the relevant provisions on group
companies will certainly affect multinational companies that
have a subsidiary or an affiliated company in Turkey. While some
of the provisions impose significant obligations on parent
companies, the main purpose for providing for this matter under
the new code is to achieve a certain level of transparency and
justice by regulating the relationship between parent companies.
As it is also stated under the rationale for the new code, these
new provisions aim to abandon the former approach, which was
to hold the board members of a company responsible without
considering the instructions provided by the parent company.
Thus the new code now recognizes the concept of group
companies and considers such a group as a whole.
• Agreement: Agreement in competition may be
between one or more undertakings which operate at
the same level of the market, i.e. between competing
undertakings, or between undertakings which operate
at different levels of the production/distribution chains,
i.e. between undertakings in a vertical relationship.
• In terms of competition legislation, in light of the
explanations above, for instance a cartel agreement
where competing undertakings agree to fix prices for the
relevant product or service will restrict competition; on
the other hand agreements signed between suppliers
and their dealers in which suppliers place obligations on
the dealers may also restrict competition and therefore
fall within the jurisdiction of competition rules.
• In terms of competition law, there is no distinction
between situations where agreements are
concluded orally and where they are concluded in
writing. The important point for the existence of the
agreement is whether the explicit or implicit union
of will or behavior between the undertakings has
the prevention, distortion or restriction of
competition within the market.
• Cartel: Cartels, which are seen as the form of
violation that is most damaging for social welfare,
refer to explicit or implicit agreements or unions
created among undertakings in a particular market
for goods and services in order to lessen or restrict
competition in that market. Cartel agreements
generally concern prices of the product, volume of
the products to be supplied, market shares and the
territories where the products will be sold and they
are typically formed under the name of
"gentlemen's agreement" in the present day.
• Exemption: Under competition law some
agreements may have competition limiting effects,
but may also lead to larger social benefits than the
social harm caused by these effects. In order to
ensure that such agreements may be concluded
and the consequent net competitive benefit
expected from them may be gained, competition
acts also include rules that exempt such
agreements from the prohibitive provisions aimed at
anti-competitive agreements.
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In the Act no 4054 on the Protection of Competition (Act no
4054), article 5 includes the regulation which exempts an
agreement falling under the scope of article 4 of the Act from the
prohibition, related invalidity and fine sanctions. Within this
framework, those agreements which fulfill all of the requirements
listed in Article 5 of the Act no 4054 are granted exemption from
the prohibition of article 4 of the Act. The four requirements
specified in Article 5, all of which have to be satisfied for an
agreement to be granted exemption are as follows:
a) Ensuring new developments and improvements, or economic
or technical development in the production or distribution of
goods and in the provision of services,
b) Benefitting the consumer from the above-mentioned,
c) Not eliminating competition in a significant part of the relevant
market,
d) Not limiting competition more than what is compulsory for
achieving the goals set out in sub-paragraphs (a) and (b).
• Mergers and Acquisitions: Merger in its general definition
means the joining of two firms into a new or existing
undertaking. In this process companies joining an existing
undertaking lose their legal personalities. For mergers
under a new company, all of the undertakings parties to
the merger lose their legal personalities. Acquisition, on
the other hand, refers to an undertaking acquiring
property so as to gain the right to control on the whole
or a part of another undertaking. In contrast to mergers,
in acquisitions undertakings do not necessarily lose their
legal personalities. Conditions leading to a transfer of an
undertaking’s control to another undertaking are
accepted as acquisition
• Joint ventures which fulfill all of the functions of an
independent economic entity and which involve the
exercise of joint control for taking strategic decisions
may also be assessed under the scope of
mergers/acquisitions.
• In accordance with Article 7 of the Act no 4054 and the
Communiqué Concerning the Mergers and Acquisitions
Calling for the Authorization of the Competition Board,
No: 2010/4 (Communiqué no 2010/4) issued in order to
establish the principles and procedures for the
application of this article requires that mergers and
acquisitions which lead to permanent changes in the
control and which exceed certain turnover thresholds be
notified to the Competition Board in order become
legally valid.
• Dominant position: In competition law, dominant
position reefers to the power of one or more
undertakings in a particular market to determine
economic parameters such as price, supply and
the amount of production and distribution, by
acting independently of their competitors and
customers.
• Negative Clearance: Negative clearance refers to the
fact that Competition Board may, upon the application
of the undertaking or associations of undertakings
concerned, establish that an agreement, decision,
practice or merger and acquisition are in violation of
articles 4, 6 and 7 of the Act No. 4054. As a result of the
examination for negative clearance, applicant
undertaking or association of undertaking may be
granted a negative clearance certificate, indicating
that an agreement, decision, practice or merger and
acquisition, which are the subject of the application, are
not contrary to articles 4, 6 and 7 of the Act.
Agreements lımıtıng cartels
• CARTELS
Cartel is the common concept which refers to
anti-competitive agreements and/or concerted
practices among competitors including price fixing,
market allocation, restriction of supply or imposing
quotas and collusive bidding in tenders. Cartels, which
are accepted as the most severe competition
restriction, strive to increase their profits by controlling
different market related variables including,
especially, price and quantity.
• Agreement among competing undertakings to
determine competitive parameters in the market leads
to the disfunctioning of the market mechanism whose
efficient functioning maximizes consumer welfare, and
thus to prices artificially settling above competitive
equilibrium. Such an agreement reduces the pressure on
undertakings to produce cheaper, better quality or new
products in order to reach more consumers and
condemns consumers to higher prices and lower quality
products. At the same time, cartels lead to negative
effects on the fight with inflation and on the equality of
income distribution. Hence, cartels have been described
as the “cancer of market economy”, and it has also
been stated that “no economy that has no effective
and deterrent sanctions against cartels can be claimed
to be a free economy.”
•
Due to the severe damage they do to economy, there is a world-wide consensus
among competition authorities that cartels should be treated differently than other
practices restricting competition and should be punished in the most severe
manner. The most common type of sanction used in this struggle is fines. Many
countries apply severe fines to deter the formation of cartels. However, the fight
against cartels is not limited to fines imposed on undertakings; administrative fines
have also been supported with other sanctions such as fines imposed on
executives with decisive roles in the formation of cartels, imposing jail sentence,
and loaded damages payments under private law. One of the most effective
methods competition authorities utilize in the fight against cartels is “leniency
programs”. Through leniency programs, detecting cartels – which by nature
operate in secret – is facilitated, and the first undertaking to disclose the cartel and
its employees are granted immunity against all penal sanctions. Furthermore, other
undertakings and their employees which assist in the cartel investigation avail
discounts on their penalties at varying rates. Regulations concerning the leniency
program were introduced with the amendments to the Act no 4054 adopted in
2008. Within this framework, the Regulation on Active Cooperation for Detecting
Cartels (Leniency Regulation) and the Regulation on Fines to Apply in Cases of
Agreements, Concerted Practices and Decisions Limiting Competition, and Abuse
of Dominant Position (Regulation on Fines) concerning the detection of cartels
were put into force as of February 15, 2009.
Agreements between competitors
• Agreements signed between competitors in order
to facilitate specialization in any operation such as
production, distribution or marketing, or to conduct
technology transfer or joint R&D studies may lead to
cooperation between the parties and create
competition restricting effects such as taking joint
commercial decisions or hindering the operations of
third party undertakings. However, such
agreements may also have efficiency creating
characteristics.
Vertical agreements
•
Vertical agreements which are signed between undertakings at different
levels of the production and distribution chain in order to procure, sell or
resell goods may have competition-restricting effects due to some
obligations brought by the parties on each other. One of these
obligations is the obligation not to sell competing goods, placed by the
supplier on the buyer which distributes the goods. This and similar
obligations may have effects such as creating market power for the
parties to the agreement and to hindering the operations of third-party
undertakings. On the other hand, vertical agreements may also have
pro-competitive effects, especially on the basis of the efficiencies they
create in distribution.When conducting competition law assessment in
relation to these agreements which may have pro-competitive effects in
addition to their competition limiting aspects and which may basically be
addressed under the above-mentioned two headings, the agreements
are analyzed in terms of their anti-competitive and pro-competitive
effects and those agreements which lead to net competitive benefits
may be granted exemption from the prohibition of article 4 of the Act no
4054, under the block or individual exemption regime.
• The block exemption regime is regulated with the
Block Exemption Communiqué on Vertical
Agreements, no 2002/2 (Communiqué No: 2002/2),
and the application principles for the Communiqué
no 2002/2 are explained in the Guidelines on
Vertical Agreements.
• In case vertical agreements which are assessed under
article 4 as a result of their competition restricting effects
do not fall under the scope of the block exemption, they
are subjected to an exemption examination under
article 5 of the Act no 4054 and are analyzed in terms of
their benefits and harms. At this point, it must be noted
that there is no notification obligation for such
agreements, which means exemption assessment must
primarily be conducted by undertakings and association
of undertakings. When conducting exemption
assessments, undertakings and associations of
undertakings should take block exemption
communiqués, guidelines explaining these
communiqués and previous decisions of the Board into
consideration, in addition to the requirements listed in
article 5.
Dealership Agreements
• Dealership Agreements are one of the types of vertical
agreements made among undertakings at different
levels of the production/service chain for the purposes of
resale of goods. In dealership agreements, one party is
the supplier of the goods or services and the other party
is the buying undertaking which is the reseller of that
product. Dealership agreements are considered under
article 4 of the Act no 4054 in case they include
competition limiting effects. In such agreements,
generally supplier places certain place obligations on
the buyer, such as an obligation not to sell competing
products or not to sell outside of an allocated region.
Such dealership agreements are addressed under article
4 of the Act no 4054, but they can be granted
exemption if they meet certain requirements.
• There are two block exemptions related to
dealership agreements:Block Exemption
Communiqué on Vertical Agreements, no 2002/2
(Communiqué No: 2002/2) describes, for all sectors,
which requirements must be met in order for
dealership agreements to be granted exemption
from the application of article 4. Application
principles for the Communiqué no 2002/2 are
explained in detail in the Guidelines on Vertical
Agreements.
• In addition, Block Exemption Communiqué on Vertical
Agreements and Concerted Practices in the Motor
Vehicle Sector, no 2005/4 (Communiqué No: 2005/4) is
issued for dealership agreements concluded in the
motor vehicle sector. Application principles for the
Communiqué no 2005/4 are explained in detail in the
Guidelines on the Explanation of the Block Exemption
Communiqué on Vertical Agreements and Concerted
Practices in the Motor Vehicle Sector.As in other types
vertical agreements, dealership agreements which do
not fall under the scope of the block exemption may be
subjected to individual exemption assessment under
article 5 of the Act no 4054.
Reasoned Board Decisions
• Hearing for the Investigation concerning Twelve Banks
Operating
• Date: 08.03.2013, Nu.13-13/198-100
• The investigation conducted in order to determine
whether twelve banks operating in Turkey violated
article 4 of the Act no 4054 on the Protection of
Competition by making agreements and/or engaging in
concerted practices in the deposits, loans and credit
cards sector was concluded.
• As a result of the discussion of the file by the Competition
Board, it was determined that article 4 of the Act no
4054 on the Protection of Competition was violated in
the deposits, loans and credit cards sector.
• It can be appealed before Ankara AdministrativeCourts
KONYA Association of
Goldsmiths and Jewelers
• The İnvestigation conducted in order to determine
whether Konya Association of Goldsmiths and Jewelers
(Association) violated article 4 of the Act no 4054 on the
Protection of Competition by fixing sale and repair prices
for gold wares and jewelry and by introducing restriction
on sales/marketing activities such as advertisements and
promotions has been concluded.
• The investigation was initiated as a result of the
preliminary inquiry opened in response to the
application claiming that businesses were prevented
from making sales at prices below those determined by
the Association and fines were imposed on businesses
selling at low prices. During the investigation phase, it
was examined whether the Association fixed sales and
repair prices for gold as well as sale and marketing
conditions outside of the market.
• As a result of the examination of the file by the
Competition Board on 14.02.2013, it was
unanimously decided that the Association violated
article 4 of the Act no 4054 by fixing purchase, sale
and repair prices for gold as well as elements of
economic and commercial activity such as sale
and marketing terms outside of the market, and
that an administrative fine of TL 7,215.47 should be
imposed on the Association in accordance with
article 16 of the same Act and the "Regulation on
Fines to Apply in Cases of Agreements, Concerted
Practices and Decisions Limiting Competition, and
Abuse of Dominant Position."
•
Control Criteria
Article 195 of the NTCC provides a definition for controlling companies and affiliates
and the criteria for determining the extent of control as follows.
1. In the event that a company, whether directly or indirectly:
(a) holds the majority of the voting rights or
(b) is entitled to procure the appointment of board members constituting the majority
who are able to take
decisions in the management body in accordance with the articles of association of the
company,
(c) holds the majority of the voting rights, either by itself or together with other
shareholders or partners, apart from its own voting rights relying upon an agreement, or
2. In the event that a company is able to keep another company under its control
pursuant to an agreement or otherwise (e.g. mergers, demergers, share acquisitions, etc.) the first
company will be deemed as the controlling company and the second company will be deemed as
the affiliate.
Trademark Infringement
• One common form of unfair competition is a
violation of the exclusive rights attached to a
trademark without the permission of the trademark
owner. Infringement may take place when one
party, the "infringer," uses a trademark which is
indistinguishable or astonishingly similar to a
trademark owned by another party, in relation to
products or services which are identical or similar to
the products or services which the registration
covers.
Trade Defamation
• Trade defamation is an intentional, false
communication, either written or spoken, that
harms a business/person's reputation. This false
communication must decrease the respect, regard,
or confidence in which the business or person is
held, or induce disparaging, hostile, or disagreeable
opinions or feelings against the business or person.
While most trade defamation is a civil matter, in a
few instances it can become criminal. Trade
defamation can also include both written
statements, known as libel, and spoken statements,
called slander.
COMPETITION LAW
• Competition law is a law that promotes or seeks to maintain
market competition by regulating anti competitive conduct by
companies Competition law is implemented through public
and private enforcement.
• Competition law is known as antitrust law in the US and antimonopoly law in China and Russia. In previous years it has
been known as trade practices law in the United Kingdom and
Australia.
• The history of competition law reaches back to the Roman
Empire. The business practices of market traders, guilds and
governments have always been subject to scrutiny, and
sometimes severe sanctions. Since the 20th century,
competition law has become global. The two largest and most
influential systems of competition regulation are US Antitrust
Law and European Union Competition Law. National and
regional competition authorities across the world have formed
international support and enforcement networks.
• Modern competition law has historically evolved on
a country level to promote and maintain fair
competition in markets principally within the
territorial boundaries of nation states. National
competition law usually does not cover activity
beyond territorial borders unless it has significant
effects at nation-state level. Countries may allow for
extraterritorial jurisdiction in competition cases
based on so-called effects doctrine. The protection
of international competition is governed by
international competition agreements.
• In 1945, during the negotiations preceding the
adoption of the General Agreement on Tariffs and
Trade (GATT) in 1947, limited international
competition obligations were proposed within the
Charter for an International Trade Organisation.
These obligations were not included in GATT, but in
1994, with the conclusion of the Uruguay Round of
GATT Multilateral Negotiations, the World Trade
Organisation (WTO) was created. The Agreement
Establishing the WTO included a range of limited
provisions on various cross-border competition
issues on a sector specific basis.
Competition law, or antitrust law, has three main
elements:
• prohibiting agreements or practices that restrict free trading
and competition between business. This includes in particular
the repression of free trade caused by cartels.
• banning abusive behavior by a firm dominating a market, or
anti-competitive practices that tend to lead to such a
dominant position. Practices controlled in this way may
include predatory prices, tying, price gouging, refusal to deal,
and many others.
• supervising the mergers and acquisiations of large
corporations, including some joint ventures. Transactions that
are considered to threaten the competitive process can be
prohibited altogether, or approved subject to "remedies" such
as an obligation to divest part of the merged business or to
offer licenses or access to facilities to enable other businesses
to continue competing.
• Substance and practice of competition law varies
from jurisdiction to jurisdiction. Protecting the
interests of consumers (consumer welfare) and
ensuring that entrepreneurs have an opportunity to
compete in the market economy are often treated
as important objectives. Competition law is closely
connected with law on deregulation of access to
markets, state aids and subsidies, the privatization
of state owned assets and the establishment of
independent sector regulators, among other
market-oriented supply-side policies. In recent
decades, competition law has been viewed as a
way to provide better public services.
LEGISLATION
TURKISH CODE OF OBLIGATIONS
• Art. 57 of TCO regulates unfair competition as a
special type of tort for non commercial matters.
• Art. 57 of TCO is based on principle of the protection
of economic personality. Therefore, it is considered
as an adaptation of the principle on the «protection
of personality» stated in Art. 23 and others in Turkish
Civil Code.
TURKISH COMMERCIAL CODE
• The Concept of Unfair Competition
The concept of unfair competition has been
reshaped by the new Turkish Commercial Code (the
TCC). The TCC defines “unfair competition” as (i) any
misleading act or commercial practice that has an
impact on competitors or on relations between
customers and suppliers and (ii) any act or
commercial practice that violates the bona fide
principles.
• The TCC also sets out the purpose of the unfair
competition provisions, which is to provide a fair
and uncorrupted competition environment for the
interest of all, including competitors and customers.
• The TCC provides a list of six “major unfair
competition cases”. However, valid unfair
competition cases are not limited to those in this list.
Accordingly, other acts or commercial practices
may also be deemed to constitute unfair
competition depending on the particulars of the
case.
• The six cases include:
(i) unfair advertisement and unfair sale methods;
(ii) soliciting customers/employees/attorneys/ other
associates to breach or terminate agreements;
(iii) unlawfully benefiting from products of third parties;
(iv) disclosure of business secrets;
(v) violation of business codes and ethics; and
(vi) Use of general contract terms that are substantially
different from the applicable legislation or that impose
materially unfair contractual obligations, or generally
violating the concept of good faith.
Examples of unfair competition under
each of the cases
(a)Advertisement and sale methods in breach of
bona fide principles and other unjustified acts
(i) degrading others’ business, products, prices and
activities with false and misleading declarations;
(ii) providing false and misleading statements about its
own business, business enterprise, logos, assets,
products, sale campaigns, prices, stocks, and business
relationships or activities or providing a benefit to third
parties through similar practices;
(iii) creating a false impression of having honours,
diplomas, awards or exceptional talent; or using false
titles or symbols for this purpose;
• (iv) deliberately creating confusion with a
competitors’ business, products or works;
• (v) comparing one’s own business products or
prices with others in a false, misleading, or
discrediting way or providing a benefit to third
parties through similar practices;
• (vi) misleading customers by sale of certain
products for prices lower than their supply prices on
more than one occasion and highlighting these in
advertisements;
• (vii) misleading customers about the actual value of
the product by way of offering additional benefits;
• (viii) restricting the freedom of customers using
aggressive sale tactics;
• (ix) misleading customers about the specifications,
qualifications, or benefits of a product or
concealing the risk of one’s products or activities;
• (x) for sales with instalments and any similar
transactions subject to public advertisements, the
failure to clearly indicate the trade name, total
price/cost, and any additional costs arising from
sales with instalments;
• (xi) for advertisements regarding consumer credit,
the failure to indicate the trade name, net costs of
credit, total costs, and effective annual interest rate;
• (xii) for those who offer/execute sales with
instalments and consumer credit contracts, using
contracts that contain false or missing information
on the subject, price, payment terms, contract term,
and early termination rights of the customer;
(b) Soliciting customers to breach or
terminate an agreement
• (i) leading customers to breach an existing contract
in order to be able to execute a contract with the
concerned customer;
• (ii) trying to gain benefit for one’s own or for third
parties by providing/proposing unfair benefits to the
employees, attorneys or other associates of third
parties which may lead them to breach their
existing obligations;
• (iii) leading employees, attorneys or other
associates to disclose confidential information
about a competitor’s production or business; and
• (iv) leading customers to cancel or to terminate
sale contracts or sale with instalment contracts or
consumer credit agreements in order to sign similar
contracts with the concerned customers.
(c) Unlawfully benefitting from products
of a third party
• (i) benefiting unlawfully from business products such
as offers, calculations or plans that are deposited as
escrow;
• (ii) benefiting unlawfully from business products
such as offers, calculations or plans that belong to
third parties despite the fact that it is known that
they have been obtained and transferred
unlawfully; and
• (iii) benefiting from others’ products, which are
ready to market, by way of technical duplication
methods.
• (d) Unlawful disclosure of confidential information
• (e) Violating the business code of conduct (ie.
business ethics and rules)
(f) Using general contract terms in breach
of good faith rules, in particular unfair
to the counter-party in a misleading
manner
• Using pre-prepared general contract terms which:
• (i) directly or through interpretation materially
diverge from the applicable rules, or
• (ii) include rights and obligations that are
materially indifferent to the nature of the
concerned agreement.
Consequences of Unfair
Competition
• The TCC sets forth legal and criminal procedures
that may arise from unfair competition cases.
(a) Civil actions
(b) Criminal liability
(a) Civil actions
• In the event it is determined that an act constitutes
unfair competition, the potential legal actions that
may be taken are as follows:
• (i) Declaratory judgment action (concerning the
examination and declaration of the acts
constituting unfair competition);
• (ii) Action for the prevention of an unfair act by
demanding the suspension of the unfair
competition;
• (iii) Action for restitution demanding the elimination
of the unlawful consequences of the unfair
competition;
• (iv) Action for compensation of damages (the judge
may rule that the defendant’s potential gain from
the act of unfair competition act is to be provided
as compensation to the claimant); and
• (v) Claims for moral compensation in certain cases.
• These actions may be brought before the court by
those who suffer or are likely to suffer loss of
reputation, business, customers or any financial
benefit as a result of the unfair competition. In
certain cases, customers who suffer or are likely to
suffer financial damages are also allowed to initiate
the above-mentioned lawsuits. Further, in some
cases, chambers of commerce and industry and
similar organizations may be allowed to initiate
some of the actions mentioned above.
• The above-mentioned lawsuits are subject to a
statute of limitations of one year following the date
when the party becomes aware that he is entitled to
take legal action and in any case three years
following the occurrence of the unfair competition
act. In the event that an unfair competition act is
also considered a “crime” under the Turkish Penal
Code, the statute of limitations in either the Turkish
Penal Code or the TCC, (whichever is longer), shall
be applicable to the legal actions as well.
Criminal liability
• Under the TCC, those who:
• (i) intentionally commit above-mentioned acts of unfair
competition,
• (ii) intentionally provide false or misleading information
regarding one’s personal status, products, business products,
commercial and other activities in order for one’s offers and
proposals be given preference above competitors,
• (iii) entice employees, officers or other workers to reveal their
employers’ or clients’ production or commercial secrets, or (iv)
have not prevented a punishable act of unfair competition
conducted by their employees, workers or representatives,
and/or have not restored the action of the misrepresentation,
may be punished by two years of imprisonment, or subject to
an administrative fine, accordingly.
• If the unfair competition act is committed by a legal
entity, the penal clauses shall also apply to
members of management or shareholders who
have or should have acted on behalf of the
concerned entity.
• The parties who are entitled to file a criminal
complaint are those who suffer or are likely to suffer
loss of reputation, business, customers or any
financial benefit as a result of unfair competition. In
certain cases, customers who suffer or likely to
suffer financial damages are also allowed to file
criminal lawsuits.
THE ACT ON THE PROTECTION OF COMPETITION
• Act No: 4054
Date of Adoption: 7/12/1994
Official Gazette of Its Publication: Date: 13/12/1994
Number: 22140
• Purpose :
Article 1- The purpose of this Act is to 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.
Scope
• Article 2- Agreements, decisions and practices which
prevent, distort or restrict competition between any
undertakings operating in or affecting markets for goods
and services within the boundaries of the Republic of
Turkey, and the abuse of dominance by the
undertakings dominant in the market, and any kind of
legal transactions and behaviour having the nature of
mergers and acquisitions which shall decrease
competition to a significant extent, and transactions
related to the measures, establishments, regulations and
supervisions aimed at the protection of competition fall
under this Act.
Prohibited Activities
• Agreements, Concerted Practices and Decisions Limiting
Competition
Article 4- Agreements and concerted practices
between undertakings, and decisions and practices of
associations of undertakings which have as their object
or effect or likely effect the prevention, distortion or
restriction of competition directly or indirectly in a
particular market for goods or services are illegal and
prohibited.
Such cases are, in particular, as follows:
• Fixing the purchase or sale price of goods or services,
elements such as cost and profit which form the price,
and any terms of purchase or sale,
• Partitioning markets for goods or services, and sharing or
controlling all kinds of market resources or elements,
• Controlling the amount of supply or demand in
relation to goods or services, or determining them
outside the market,
• Complicating and restricting the activities of
competing undertakings, or excluding undertakings
operating in the market by boycotts or other
behaviour, or preventing potential new entrants to
the market,
• Except exclusive dealing, applying different terms
to persons with equal status for equal rights,
obligations and acts,
• Contrary to the nature of the agreement or
commercial usages, obliging to purchase other
goods or services together with a good or service,
or tying a good or service demanded by
purchasers acting as intermediary undertakings to
the condition of displaying another good or service
by the purchaser, or putting forward terms as to the
resupply of a good or service supplied.
• Private Law Consequences of Limiting Competition
Legal Nature of Agreements and Decisions Contrary
to This Act
Article 56- Any agreements, and decisions of
associations of undertakings, contrary to Article 4 of
this Act are invalid. The performance of acts arising
out of such agreements and decisions may not be
requested.
• Right to Compensation
Article 57- Anyone who prevents, distorts or restricts
competition via practices, decisions, contracts or
agreements contrary to this Act, or abuses his
dominant position in a particular market for goods
or services, is obliged to compensate for any
damages of the injured. If the damage has resulted
from the behaviour of more than one people, they
are responsible for the damage jointly.
Competition Authority
• Article 20- The Competition Authority having a
public legal personality, and an administrative and
financial autonomy is established in order to ensure
the formation and development of markets for
goods and services in a free and sound competitive
environment, to observe the implementation of this
Act, and to fulfill the duties assigned to it by the Act.
• Article 21- The organization of the Authority consists
of the
a) Competition Board,
b) Presidency,
c) Service Units.
• An action may be brought at the authorised
administrative court against the administrative
sanction decisions of the Competition Authority.