The Communiqué on the Amendment of the Block Exemption Communiqué on Vertical Agreements numbered 2002/2 by the Turkish Competition Authority (2021/4) was published in the Official Gazette on 5 November 2021 and entered into force.

Within the scope of the amendment, the 40% market share threshold, which was determined by the amendment made in 2007 and applied for granting block exemptions for vertical agreements since 2007, has been reduced to 30%. The lowering of the market share threshold caused the agreements applied by undertakings with a market share between 30% and 40% and benefiting from the block exemption to be subject to individual exemption and the scope of the block exemption was narrowed.

According to the Communiqué, in addition to lowering the market share thresholds regarding the block exemption application, some updated transition periods have been regulated as a result of the increase in the market share of the relevant undertaking and the exceeding of the thresholds. The amendments made pursuant to the Communiqué are summarized below:

  1. In order to benefit from the block exemption, the market share of the supplier in the relevant market where it provides the goods or services subject to the vertical agreement must not exceed 30%.
  2. In order to benefit from the block exemption, the buyer's share in the relevant market where the goods and services subject to the vertical agreement is purchased should not exceed 30% in terms of vertical agreements that include the obligation to supply to a single buyer.
  3. If the market share is not more than 30% initially and then exceeds the threshold not exceeding 35%, the exemption will continue to be valid for the next two years following the first year the threshold was exceeded.
  4. If the market share is not more than 30% initially and then exceeds 35%, the exemption will continue to be valid for the year following the first year the threshold was exceeded.

As a result of the amendment, although it benefited from the block exemption with the previous regime, agreements that are out of the scope of the block exemption with the new regulation emerge. The Communiqué will enter into force on the date of its publication and it has been mandated that the contracts that are out of the scope of the block exemption must be brought into compliance with the exemption conditions within six months from the effective date of the Communiqué. Otherwise, it should be taken into account that contracts that are out of the scope of the block exemption and do not comply with the individual exemption conditions, may constitute a violation in accordance with Article 4 of the Act No. 4054. As a result, in terms of agreements that go out of scope, it is necessary to ensure compliance with the conditions by making an individual exemption assessment within 6 months (until 5 May 2022) as of November 5, 2021, the effective date of the Communiqué. Yet the agreements that cannot be made in accordance with the individual exemption conditions will bring the competition law infringements risk for the undertakings.

The amendment made by the Turkish Competition Authority regarding the block exemption market share thresholds for vertical agreements is in line with the European Union regulation. As a matter of fact, the threshold has been determined as 30% in the European Commission's regulation numbered 330/2010.

As for the consequences, it can be said that the new threshold will appear in the direction of expanding the use of the Turkish Competition Authority's discretion with the increase in the number of agreements to be evaluated in terms of individual exemption.

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