1. “Economic Reforms and
Competition Law and Policy
In Turkey”
Presented by :Dr. Kemal EROL
01-02 NOVEMBER 2010
MARRIOTT HOTEL ZAMALEK – CAIRO
EGYPT
5TH ECONOMIC FREEDOM OF THE
ARAB WORLD CONFERENCE
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2. Part 2
1 -The Law on Protection of Competition
1.1 .The Purpose and The Scope of Law.
1.2 .Substantial Provisions. (=three prohibitions)
1.2.1. Cartel Prohibition. (Art 4)
1.2.2. Abuse of Dominant Position. (Art 6)
1.2.3.Merger Control (Art 7)
2 - The Competition Authority, Sanctions and Enforcement
“Economic Reforms and Competition Law and Policy In Turkey”
Part 1
1 - Historical Background
2 - Liberalisation And Opening Up Markets
3 - Cleaning Up The Obstacles For Foreign Direct Investment
4 - Privatization
5 - Regulation
6 –Enhancing A Very Effective Competition Law
7 - Competition Advocacy
8 - Maintenance Of A Sustainable Economic Growth
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3. 24 February 1980 Decisions:
• Decreasing inflation rate by application of daily
exchange rate.
• Reducing the State’s role in the economy and limiting the
subsidy in agriculture sector.
• Lifting all the subsidies with the exception of fertilizer
energy and transport sectors.
• Liberalization of the foreign trade and profit transfer and
incentives for the foreign investments.
• Support for the constructing companies operating outside
of Turkey.
• Liberalization of the imports by lifting unnecessary
prohibitions and subsidy for exports by bonus system.
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4. •Sale:
•Transfer of the ownership of companies in full or partially,
•Transfer of shares of these companies through domestic or international public offerings,
•Block sales to real and/or legal entities, block sales including deferred public offerings,
•Sales to employees,
•Sales on the stock exchanges by standard or special orders,
•Sales to investment funds and/or securities investment partnerships.
•Lease:
•Grant of the right of use of all or some of the assets of the companies for a defined period
of time.
•Grant of Operational Rights
•Establishment of Property Rights other than Ownership
•Profit Sharing Model and other Legal Dispositions Depending on the
Nature of the Business.
Privatization Methods
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5. Regulated Areas and
Independent Regulatory
Authorities
1. Financial Services: Capital Market Board (SPK)
2. Banking Sector : Banking Regulation and Supervision Authority
(BDDK)
3. Energy Sector: Energy Market Regulatory Authority (EPDK)
(Electricity, gas, petrolium, LPG)
4. Telecommunications Sector: Information and Communication
Technologies Authority (BTK)
5. Sugar Industry: Sugar Authority (ŞK)
6. Tobocco&Alcholic Beverages Market Authority (TAPDK)
7. Public Procurement Authority (KİK)
8. Central Bank (MB)
9. Revenue Administration (GİB)
10. Privatization Authority (Öİ)
11. Social Security Institution (SGK)
12. Competition Authority (RK)
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6. Constitutional Order to the State (Governments)
Article 167/1 of the Constitution of the Republic of Turkey
ARTICLE: 167/1. “The State shall take measures to ensure and
promote the sound, orderly functioning of the money, credit, capital,
goods and services markets; and shall prevent the formation, in practice
or by agreement, of monopolies and cartels in the markets.”
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7. ACT ON THE PROTECTION OF COMPETITION
(LAW NO:4054)
DATES :
Adoption by the Parliament : 7. December.1994
Publication at the Official Gazette and Entry into force : 13.December.1994
Entry into force for the penalty provisions : 13.December.1995
Appointment of the Competition Board : 27.February.1997
ACTUAL ENFORCEMENT :
Completion of the Establishment of the Competition Authority : 4.November.1997
CHANGING LAWS (AMENDMENTS) :
Law no:4971 dated 01.08.2003
Law no:5234 dated 17.09.2004
Law no:5388 dated 02.07.2005
Law no:5538 dated 01.07.2006
Law no:5728 dated 23.01.2008
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8. THE PURPOSE OF THE ACT
Within the markets for GOODS and SERVICES
-To ESTABLISH a system ENSURİNG the necessary
A- REGULATION,
B- SUPERVISION and
C- PREVENTION of
ABUSE OF DOMINANT POSITION by undertakings and which have as
their :
* AGREEMENTS
* DECISIONS
* CONCERTED PRACTICES
a) OBJECT or
b) EFFECT
- PREVENTION or
- RESTRICTION or
- DISTORTION
Of COMPETITION
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9. The SCOPE of the ACT
This Act applies to : operations as regards :
which have as their OBJECT or EFFECT
amongst ANY undertakings which
PREVENTION
DISTORTION or of
RESTRICTION COMPETITION
* AGREEMENTS,
* DECISIONS and
* CONCERTED PRACTICES
II. The ABUSE OF DOMINANT POSITION IN THE MARKET and
III. ALL KINDS OF OPERATIONS and CONDUCTS which are deemed to create a
MERGER or ACQUISITION by which COMPETITION in the market would
SIGNIFICANTLY be IMPEDED
I. The
EFFECTS DOCTRINE
* measures
* decisions
* regulations
* supervisions
FOR PROTECTION OF
COMPETITION
concerning
* OPERATE in or
* MAY AFFECT
The markets for GOODS and
SERVICES within the TERRITORY of
TURKISH REPUBLIC
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10. PROHIBITION I
AGREEMENTS, DECISIONS AND CONCERTED PRACTICES IN
RESTRAINT OF COMPETITION
Art.4 = (ART. 85/I; 81/I of the EEC TREATY.)
* The AGREEMENTS and CONCERTED PRACTICES of the UNDERTAKINGS and the
ASSOCIATION of UNDERTAKINGS and
* HAVE AS THEIR OBJECT or
* CAUSE or
* MAY CAUSE
Which: The
- PREVENTION
- DISTORTION
- RESTRICTION
of COMPETITION
In a market for GOODS and SERVICES
ARE UNLAWFUL and PROHIBITED
* The DECISIONS of the ASSOCIATION of UNDERTAKINGS.
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11. EXAMPLES TO PROHIBITIONS MENTIONED AT ARTICLE 4
* Fixing the purchase or selling price or the factors such as cost or profit.
* Sharing the markets for goods and services or the sources and
elements of the market.
* Controlling the quantities of supply or demand or determining these
figures outside the market conditions.
* Eliminating or preventing the new competitors or impeding their
activities.
* Applying dissimilar conditions to equivalent transactions with the
other trading parties.
* Making a conclusion of contracts subject to the acceptance of
[unreasonable] condition.
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12. EXEMPTION Art.5. (= Art.85(3) of the EEC Treaty)
The COMPETITION BOARD (and only the BOARD)
POSITIVE
CONDITIONS
* Contributes to the improvement of PRODUCTION or
DISTRIBUTION of goods and providing services or
PROMOTING TECHNICAL or ECONOMIC progress.
* Allows Consumers A FAIR SHARE of the resulting
benefit.
* ELIMINATE competition in a substantial part of the relevant
market;
* INDUCE a restraint on Competition that is MORE THAN
NECESSARY for the attaintment of the objectives set out in
paragraphs (a) and (b)
NEGATIVE
CONDITIONS
Publish group Exemption Notifications for certain categories of agreements.
The BOARD may give exemption either upon a request on an individual basis.
- For a maximum 5 years period
- and if necessary on certain conditions and/or undertakings or,
EXCLUSIVE POWER
may declare the provision of Art.4 in applicable to
* any decision by association of undertakings or
* any agreement by the undertakings
* any concerted practices
If it :
and If it does not :
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13. PROHIBITION II
The ABUSE OF DOMINANT POSITION.
Art.6 = (Art. 86 of the EEC TREATY)
ANY ABUSE by one or more undertakings, acting ALONE or
by means of
- an agreement or
- concerted practices.
OF A DOMINANT POSITION :
in a market for GOODS and SERVICES
* within the WHOLE TERRITORY of the STATE or
* IN A SUBSTANTIAL PART OF IT.IS UNLAWFUL AND PROHIBITED.
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14. EXAMPLES OF ART.6. PROHIBITIONS
• PREVENTING (Directly or Indirectly) the new competitors or
IMPEDING the activities of already existing competitors.
• APPLYING dissimilar conditions to equivalent transactions (thereby
creating a direct or indirect discrimination)
• MAKING the conclusion of contracts subject to the acceptance of
some (unjust) conditions
• USING the FINANCIAL, TECHNOLOGICAL and COMMERCIAL
advantages of a dominant position in a market for goods and services to
detriment of a competition in another market.
• RESTRICTING production, marketing or technical development
which would cause a disadvantageous position for consumers.
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15. PROHIBITION III
(SOME) MERGERS & ACQUISITIONS
(Art. 7/1 of the ACT)
1) MERGER of two or more undertakings or
as a result of which:
COMPETITION WOULD SIGNIFICANTLY BE IMPEDED
in a market for goods and services in the WHOLE territory of the STATE or in a
SUBSTANTIAL PART of it.
- by an undertaking or,
- by a person
of another undertaking
2) ACQUISITION
by acquisition of all or part of its assets or securities, or
by other means
by which that person or undertaking
ACQUIRES A CONTROLLING POWER in that undertaking concerned.
which would :
IS UNLAWFUL and PROHIBITED
- CREATE or the DOMINANT POSITION of
- STRENGTHEN one or more undertakings
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16. COMPETITION AUTHORITY
COMPETITION BOARD
(7 Members including Chairman)
ASSISTANT CHAIRMANS
COMPETITION BOARD
MINISTRY OF TRADE INDUSTRY
HIGH COURT OF APPEAL
HIGH ADMINISTRATIVE COURT
(COUNCIL OF STATE)
TURKISH UNION OF CHAMBERS AND EXCHANGES
SERVICE DEPARTMENTS
-MAIN SERVICE
DEPARTMENTS (Carrier
Services
-CONSULTATIVE
SERVICES
-AUXILARY (SUPPORTING)
SERVICES
MINISTRY RESPONSIBLE FOR
THE STATE PLANNING ORGANIZATION
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17. SANCTIONS
I- NULLITY AND VOIDITY OF THE PRACTICES CONCERNED
(INCLUDING THE CONTRACTS) (Art`s 4,6,7,56)
II- IMMEDIATE TERMINATION OF INFRINGEMENT (Art.9)
III-RESTORATION OF ALL FACTUAL SITUATIONS BEFORE THE MERGER
(in the case of UNLAWFUL MERGERS & ACQUISITIONS.) (Art.11)
IV-FINES ( Art 16 - and PERIODIC PENALTY PAYMENTS :
a) FIXED FINES : (Art 16) Up to 0,1% of the turnover (min. 10.000 TL)
a)false or misleading information or document is provided in exemption and negative clearance applications and in
authorization applications for mergers and acquisitions,
b)mergers and acquisitions that are subject to authorization are realized without the authorization of the Board,
c)in implementation of articles 14 and 15 of the Act, incomplete, false or misleading information or document is
provided, or information or document is not provided within the determined duration or at all,
d)on-the-spot inspection is hindered or complicated,
a)false or misleading information or document is provided in exemption and negative clearance applications and in
authorization applications for mergers and acquisitions,
b)mergers and acquisitions that are subject to authorization are realized without the authorization of the Board,
c)in implementation of articles 14 and 15 of the Act, incomplete, false or misleading information or document is
provided, or information or document is not provided within the determined duration or at all,
d)on-the-spot inspection is hindered or complicated,
b) PRO-RATA FINES (Art.16/3) Up to 10 % of the turnover infringing
article 4, 6, or 7.
c) FINES FOR THE MANAGERS AND EMPLOYEES OF THE
COMPANY (Art. 16/4) Up to 5% of the fines given to the company.
d) PROPORTIONAL ADMINISTRATIVE FINES: (Art.17)
For each day of the failure of the enforcement of a decision of the BOARD
0,05% of the turnover
V- COMPENSATION OF ALL DAMAGES and if there is an intention or heavy neglicence, THREE
TIMES of the substantial damage. (Art 57-58) 17