Today, the economic system in our country is market economy given its basic structure and components. Market economy, in a general sense, indicates an economic system where economy is not directed by a central decision organ; on the contrary, directed by market dynamics. Accordingly, basic economic functions such as directing and coordinating economic units, determining the amount of supply and demand, determining price, obtaining information about price, quantity, quality and other conditions are realized in markets and performed by markets.
The basic central component of the economic policy that is implemented to ensure and protect functioning in market economies is competition. In other words, competition can only exist together with market economy and the functioning of market economy depends on the existence of a sound competition environment.
Generally, competition in market economy is defined as the process of a race or contestable relations between economic units to reach specific economic aims such as profit, sales amount and market share. Competition is a very important process directing firms towards being efficient, producing more goods and services with high quality at lower prices.Price and profit indicators are determined independently from interventions in a competitive market economy. If firms are able to make decisions independently, limited sources will be used efficiently and consumers' welfare will increase. On the other hand, competition contributes to the development of the country as a whole by leading to new inventions and technological developments.
Competition depends on the existence of certain conditions. As competition is an instrument that ensures the functioning of market economy, in the absence of conditions favorable for competition, market economy cannot operate properly.
Naturally, economic units in the competitive environment always tend to avoid competition. Market economy has an unstable internal structure and dynamic. Therefore, firstly, a sound competitive process is necessary in order for market economy to function efficiently.
The shape of market structures are important for the existence of competition. Markets must have a structure that allows new entries. Competition dynamics tend to decline in markets with entry barriers. In this way, concentration trends increase, leading to restriction of competition.
On the other hand, undertakings must be willing to compete in order to establish competition, in other words they must have competition spirit. Competitive spirit shows entrepreneurs' attitude that they attach importance to success and working hard. Here, being courageous about innovations and bearing risks in a planned manner is important.
Another important condition for establishing competition properly is to create the necessary legal infrastructure that is able to ensure a competitive order which cannot be distorted. It is not possible to talk about a real competitive environment and market order in the absence of legal regulations about competition.
Legal regulations about competition should not be read as state intervention to markets or to the direction of economy in its natural course. Legal regulations in this area are applied in order to determine the limits of competitive freedom and to provide undertakings with the opportunity to compete equally and freely.
Abuse of competition right may be in the form of abusing economic competition by means of deceptive behavior or other instruments that are contrary to honesty rules or anticompetitive agreements or decisions to affect the supply, production, distribution or prices of certain goods or services or abuse of dominant position in the market.
Distortion of competition in violation of honesty rules or by means of deceptive behavior is generally called "unfair competition" and the relevant legal regulations are covered by Turkish Commercial code and Code of Obligations.
All regulatory and prohibitive legal regulations related to preventing agreements between undertakings or decisions with the aim of affecting markets and restricting competition in respect of goods and services as well as concentrations leading to abuse of dominant position, monopolization or distortion of competition are called "competition restrictions law" or
"cartel law" or in short "competition law".
Legal regulations about competition in a modern sense were first seen in the United States and Canada towards the end of the last century. Especially, after the industrial revolution, fast industrialization caused concentration between economic units and Sherman Act was enacted in the United States in 1890 in order to solve the problems caused by such concentration.
In other industrialized Western countries, enactment process started after the World War I and accelerated after the World War II and competition law has an important place in legal literature in almost every Western country.
Although legal regulations took place at different times in Western countries, the basic aims to be reached by competition law are nearly the same. The basic aims adopted in all legal systems are "protection of competition process or free competition" or "protection of efficient competition". In this way, protecting competition ensures freedom of trade and freedom of entry to the market. In France and Germany, competition policies are defined as instruments protecting economic freedom to prevent attempts to hinder market entries by means of dishonest behavior. This freedom to act individually is accepted as an indispensable part of the democratic, constitutional system.
Protecting the competitive process ensures the allocation of a country's sources according to public demand and contributes to general welfare with increasing economic efficiency. Competition among actors involved in commercial activities lead to more efficient production and business management, and also promote using fewer sources, production at lower costs, technological innovations and developments. As a result of this, it will be possible to buy products with better quality at lower prices and public welfare will increase.
Beside the abovementioned aims, competition system has also secondary aims. First of all, competition system helps to protect smaller undertakings by eliminating entry barriers. On the other hand, in an economic system without competition, the state intervenes to the economic life more frequently and the number of public economic enterprises increases.
On the other hand, competition system contributes to the integrity and honesty of the market. Moreover, it is known that competitive system contributes to decreasing inflation.
Another benefit expected from Competition Law is strenghtening entrepreneurship. In markets without competition acts, entry barriers are very common. Such practices have negative consequences such as carrying the struggle for success out of the market, increasing failure risks, causing new entries with higher chance of success and more knowledge to move away from the market. In cases where failure risk cannot be determined beforehand, undertakings that do not have the ability to calculate this risk enter to these markets and when they encounter unexpected circumstances, they resort to illegal methods in order to survive. consequently, it becomes impossible to operate free market system and obtain the social benefits. The tendency to see competition as a race between merchants lost its validity today. In our age, free competition market means the efforts of anonymous competitors to offer goods or services at higher quality or supply cheaper products. With this Competition Act, new entries become easier by eliminating the existing entry barriers and failure risk becomes calculable. Besides, it aims that the public benefit from those consequences as much as possible. There have been efforts to develop the free trade system since the proclamation of the Republic. However, lack of competition laws caused distorted conditions in markets for goods and services and impaired entrepreneurship. Today, when we analyze several markets for goods and services, we see that new entries are very limited, the number of educated entrepreneurs is gradually lessening due to unpredictable risk factors.
The State has important tasks in establishing and maintaining competition and it is necessary that the State follow a conscious competition policy. Protecting and developing a competitive-based market system is the duty of competition policies. It is necessary for the proper functioning of market economy that there should be a dynamic competitive process between competitors and successful undertakings, not the strong ones, should thrust themselves into this process. If the State does not have a competition policy, strong undertakings rather than successful ones dominate the market. Therefore, in economies with market system, it is the State's main duty to establish, protect and maintain competition. Competition policy in market economies is vital for general economic policy. A distortion in competition process which constitutes the central factor of market system threatens the economic system as a whole.
It is possible to guarantee the rights of actors in commercial life only with the help of organs that are able to operate and take decisions independently. Our country, where democratization process still continues, needs independent administration agents operating in this way.
The Competition Authority with such characteristics will develop and maintain free competition in the country and free trade and freedom of enterprise will be guaranteed in this way.
According to Article 167 of the Constitution "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." Therefore, in order to create sound markets, encourage entrepreneurs, ensure efficient allocation and use of limited sources of the country in the most productive way "the Act on the Protection of Competition", which is compulsory as a constitutional directive has been prepared. We hope that the Act will start a new period in our economic life.