I. INTRODUCTION
Within the scope of Law Amending the Law on the Protection of Competition numbered 7246 which has entered into force by the Official Gazette numbered 31165 and dated on 24 June 2020 ("Amendment Regulation"), significant amendments were brought to the Law on the Protection of Competition Law numbered 4054 ("Law No. 4054") and a new era has launched in terms of Turkish Competition Law. It is expressed in the general justification of the law that it becomes necessary to make changes in some articles of Law No. 4054, taking into account the developments occurred for a long time both in terms of both the markets and competition law practices at national and international scale and the experiences and knowledge gained accordingly as well as the similar developments and gains in the European Union competition law.
With the aforementioned law, besides many regulations that are closely related to companies, there are also regulations made in terms of time and procedure in the Competition Board's (the "Board") present approach in practise, and innovations regarding the organizational structure of the Competition Authority ("Authority") and the competition expertise. These major changes are as follows.
- removing the exclusive authority of the Board in the exemption assessment.
- providing new criteria of "avoiding effective competition" regarding control of specialization.
- implementation of behavioural and structural measures into investigation.
- consensus and commitment mechanisms,
- de minimis regulations,
- regulations for electronic and digital data search procedures regarding on-site investigations
II. INNOVATIONS BROUGHT TO THE LAW NO. 4054
1. "Self-Assessment" Method in the Exemption Regime
One of the main changes made in the Law No. 4054 is made in Article 5 titled "Exemption". Agreements, concerted actions or decisions of associations of undertakings, between undertakings, that have the purpose, or have the nature of causing or have the potential to directly or indirectly prevent, distort or restrict competition in a particular market of goods or services are prohibited (Article 4) and exceptions (Article 5) are stipulated for agreements restricting competition in some cases where it is anticipated that "society and the consumer" can benefit from it.
With the amendment made in Article 5, an arrangement has been made as to "in the presence of all the conditions; agreements and concerted actions between undertakings and decisions of association of undertakings are exempted from the application of the provisions of Article 4" by amending the regulation stating that the Board may decide to exempt the anti-competitive agreements and concerted actions between enterprises and decisions of associations of undertakings from the application of the provisions of Article 4 if all the conditions stipulated in Article 4 are met. As a result of the amendment, the discretionary power of the Board regarding exemption was abolished and the "self-assessment" method was strengthened, by stating that Article 4 would not be applied in the presence of conditions and, undertakings will be able to self-assess without making any application to the Board in order to benefit from the exemption. However, with the additional sentence brought to Article 5, it is regulated that the relevant enterprises or associations of undertakings can apply to the Authority in order to determine that they meet the exemption requirements of the agreements, concerted actions or decisions within the scope of Article 4 of the Law No. 4054. Thus, undertakings and / or associations of undertakings may apply to the Authority in case of any hesitation in relation to exemption.
Although it is stated in the justification that it is aimed to increase the legal certainty of the exemption regime and to clarify the "self-assessment" method; with the "self-assessment" method, a concern emerges that it usually will not be possible for the enterprises to make judgments in accordance with the Law No. 4054. The approach of the Authority on this issue in the following days is important in order for clarifying such issue.
2. Criterion for "Significant Impediment Effective Competition" in the Mergers and Acquisitions Regime
With the amendment made in Article 7 of the Law No. 4054, instead of the " dominant position test" applied by the Board in applications regarding merger and acquisition transactions, the limits of the Board's discretionary power have been expanded by foreseeing the "significant reduction of effective competition test" in parallel with the provisions of the Council Regulation No. 139/2004 of the European Union.
With the expressions added to the article, the possibility of creating a dominant position or strengthening the existing dominant position as a result of the concentration process is expanded, and even if the dominant position is not reached, takeover transactions that can significantly reduce the competition in the market are prohibited and it is anticipated that the merger and acquisition permits will require deeper economic analysis and therefore the application processes will be extended.
In the justification of the law, it is stated that with this regulation, it becomes possible to evaluate the unilateral effects and cooperation effects that will arise from mergers and acquisitions by passing into the test of significant impediment effective competition, which is also in line with the European Union legislation.
3. How Potential Violations are Handled and the Sanctions That May Be Imposed by the Competition Board
Another of the most important changes introduced is that the Board can decide on behavioral and structural measures for undertakings / associations of undertakings in case of violation of Articles 4, 6 and 7 of the Law No. 4054.
With this amendment, as a result of the investigations carried out, the Board may take a decision (behavioral remedy) for undertakings to do or not to do some behavior, or if these measures fail, it may also implement measures such as terminating certain activities of the undertakings, transferring partnership shares or assets (structural remedy).
In the aforementioned regulation, the "structural remedies" regulation in Article 7 of the EU Council Regulation No. 1/2003 was taken as an example.
With respect to the innovation brought by the Authority regarding structural remedies; a public statement was made on the website of the Authority including those expressions, such as " in the current situation, an investigation takes an average of 1.5 years, a structural remedy cannot be envisaged directly in the first investigation, at the end of the second investigation, if it is concluded that the same risk of violation continues due to the current structuring of the enterprise, this measure may come to the agenda, even in this case, the structural remedy will only be related to the parts that are necessary and proportional to the violation, seizure also in case of failure to comply with structural remedies, an administrative fine rather than an authorization to forced sales."
4. Commitment and Reconciliation Mechanisms in Investigations Against Competition Violations
With the amendment made in Article 43, undertakings have been given opportunities for commitment and compromise. The title of the article named "Starting an Investigation" was changed to "Initiation of an Investigation, Commitment and Reconciliation".
Under the regulation, undertakings are given the opportunity to submit a commitment during the preliminary investigation or investigation process for violations other than price determination, region and customer sharing, which are considered as serious violations in terms of competition law. Thus, undertakings will be able to undertake the elimination of situations that threaten competition, and if the Board concludes that such commitments will eliminate competition problems, the commitments may be made binding in terms of undertakings, and it may be decided not to open an investigation or to terminate the investigation in progress.
In the event that there is a change in an issue that constitutes the basis for the decision, violation of the commitment and a decision has been made on incomplete / incorrect information, an investigation may be opened by the Board again.
In the conciliation body recognized by the amendment within the scope of Article 43, a certain period of time was arranged for undertakings to submit a compromise text stating that they accept the existence and scope of the violation in the investigations initiated by the Authority.
This determined period ends when it reaches the enterprise under investigation about the investigation report. Evaluating the text of the reconciliation, the Board may determine the violation and apply a reduction of up to 25% in the fines to be imposed, but the administrative fines and the matters included in the text of the reconciliation will not be subject to litigation by the undertaking accepting the compromise.
Other procedures and principles regarding reconciliation will be determined by the regulation issued by the Board.
5. The de minimis Rule: the Exclusion of Agreements between Very Small Businesses with Undeniably Low Competitive Impact
With the amendment to Article 41, the Board may not be able to open an investigation against agreements, concerted actions and practices of association of undertakings, except for obvious and severe violations such as price agreement between competitors that do not exceed the turnover and market share thresholds determined by the Board, region / customer sharing and restriction of supply. With this regulation, it is aimed for the Authority to focus on more important violations in harmony with the EU legislation. Objective criteria regarding the amendment made in order to direct the resources of the Institution to important violations will be determined by the communiqué to be issued by the Board.
6. Analysis of Data
Sub-clause (a) of article 15, which counts the documents that the Authority can take in on-site inspections, has been amended and thus the limits of the Authority's on-site inspection and document collection capability have been expanded, especially in terms of digital data. Competition experts have been given the opportunity to receive "all kinds of data stored in physical and electronic media and information systems".
In the public announcement made on the website of the Institution, the following statements were made regarding the regulation; "First of all, it should be emphasized that the 15th article of the Law, which has been in force since 1994, clearly states that the authority to inspect on site is limited to information, documents and assets of enterprises or associations of undertakings. This provision does not change with the law proposal. During the on-site inspection, the information that personal mobile phones or tablets will be seized and examined is not correct and the investigations will be limited to the data / documents / assets of the relevant undertakings as before."
7. Other Changes
With the amendment made in Article 45, the investigation team is given the opportunity to prepare additional written opinions, which they prepare in investigations, in 30 days instead of 15, if they have justifiable grounds. The right of additional time for the defense periods currently valid for undertakings is preserved.
Finally, with the changes, important changes have been made regarding the organizational structure and competitiveness of the Authority. While the number of vice presidencies was increased from two to three, the number of personnel of the Authority was doubled. In addition, with the regulations foreseen in terms of competition expertise / professional staff, the specialty thesis requirement has been removed.
III. CONCLUSION
With all these developments at national and international level and the changes made in the Law No. 4054 in line with the emerging needs, it is aimed to achieve the modern level in competition law and to make it more active and dynamic by providing the Authority with the necessary structure and means to better meet the needs of the markets. These changes in Act No. 4054 on Turkey's harmonization process with European Union competition law is seen as the legislation is an important step. Among these, the structural measures to be applied with the authority given to the Authority and the issues of authorizing the courts in the exemption regime, the direct effects and reflections of these changes on the implementation and the scope and contents of the secondary regulations related to them are the main issues that need to be clarified at the current stage.
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