Following the entry into force of the Law No. 7246 (the "Amendment Law") the "Dominance Test" which was used as the substantive test by the Turkish Competition Board ("Board") was replaced by the "SIEC Test". The SIEC Test is also incorporated within the Communiqué No. 2010/4 on the Mergers and Acquisitions Subject to the Approval of the Competition Board ("Communiqué No. 2010/4") by way of the amendments introduced via Communiqué No. 2022/2 on the Amendment of Communiqué No. 2010/4 on the Mergers and Acquisitions Subject to the Approval of the Competition Board ("Amendment Communiqué"). This amendment aimed to allow a more reliable assessment of the unilateral and coordinated effects that might arise as a result of mergers or acquisitions.
The substantive test is the main standard in examining whether a transaction should be allowed to proceed or not. For the competition authorities, determining a convenient substantial test is of great importance as it is the fundamental ground for prohibiting a notified transaction. Very recently, the Turkish competition legislation on this front, after years of trial and error, was amended and the go-to substantive test for merger control was changed to mirror the European legislative framework, the EU Merger Regulation.
Before the Amendment Law, the substantive test used by the Authority for its merger review had been a typical dominance test, originating from Article 7 of Law No. 4054 (before being amended) and Article 13 of Communiqué No. 2010/4. Based on these articles, mergers and acquisitions which did not create or strengthen a dominant position and did not significantly lessen competition in a relevant product market within the whole or part of Turkey were be approved by the Board. Simply put, before the amendment introduced the SIEC test, a contemplated transaction could approved by the Board with very few exceptions, unless it led to a new dominant position or reinforced an existing dominant position.
The Amendment Law provided legal certainty and enabled the utilisation of the Board's past experience regarding mergers and acquisitions by indicating that a significant impediment of effective competition essentially occurs through the creation or strengthening of a dominant position. With this new test, the Board is now able to prohibit not only transactions that may result in creating a dominant position or strengthening an existing dominant position, but also those that can significantly impede competition. On the other hand, one can expect that in practice, the Board's assessment of concentrations would not materially change given that the Turkish Competition Authority's guidelines regarding the merger control regime are already aligned with and closely modelled after the relevant notices and guidelines in the EU, which were based on the SIEC test.
Please see the Sections titled "Strengthening or Creating Dominant Position" and "Significant Impediment of Effective Competition in Relevant Market" for further information.
