Principles of Competition Law

Competition law is a branch of law built on the rules established with an aim to protect competition in the markets for goods and services. These rules which concern the acts and transactions of undertakings engaged in economic activities in the markets for goods and services are generally grouped under three headings. Within this framework, competition rules prohibit agreements, decisions and concerted practices restricting competition between undertakings as well as abuse of dominant position by undertakings holding such positions in their markets, and they also control mergers and acquisitions over certain thresholds.

The prohibition and control provisions laid out in competition rules basically aims to prevent cartelization and monopolization in markets for goods and services. As a matter of fact, such developments in the markets inevitably harm consumer welfare, an indispensable element of social welfare which the competition rules aim to protect. On the other hand, some agreement may limit competition between undertakings on the one hand and may lead to some social economic efficiencies/benefits on the other. In order to ensure that such agreements with a net effect of increasing competition can be made, an exemption regime is regulated in competition law and agreements between undertakings in the same level (horizontal) and different levels (vertical) of the market may be left exempt from the prohibition of the competition rules under an exemption system, provided they are not cartel agreements which are, by nature, out of the scope of exemption.

The purpose of the Act no 4054 on the Protection of Competition (act no 4054), which provides the basis for the competition legislation in Turkey, is stated as follows in article 1 of the Act: "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." Accordingly, the transactions under the scope of the Act aimed at achieving this goal may be listed under three headings in articles 4, 6 and 7 of the Act:

  • Article 4 concerns all agreements, practices and decisions between all kinds of undertakings operating in or effecting markets for goods and services within the borders of the Republic of Turkey which can prevent, distort or restrict competition,
  • Article 6 concerns abuses of dominant power by undertakings which hold dominant position in a market,
  • Article 7 concerns all legal transactions and behavior in the nature of mergers and acquisitions which aim to create dominant position or strengthen existing dominant position and which will significantly decrease competition as a result.

The regulations of Articles 4, 6 and 7 which constitute the foundations of the implementation of the Act and which include prohibitive provisions are aimed at undertakings. In the implementation of the Act, an undertaking is defined as "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," and makes no discrimination among public and private undertakings within this framework. In other words, the Act no 4054 does not specify any privileges for public undertakings. Consequently, in case agreements, practices and decisions restricting competition are carried out by public undertakings, these undertakings shall also be subject to the provisions of the Act. The Act no 4054 also does not discriminate between sectors and covers practices and transactions by undertakings and associations of undertakings which restrict competition in all markets for goods and services. 

Headings and concepts that can be analyzed under the scope of Principles of Competition Law can be accessed from the menu on the left side.