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"The Articles of the Turkish Competition Law on fines have been amended" THE ACT CONCERNING THE AMENDMENTS MADE TO VARIOUS ACTS FOR ENSURING COMPATIBILITY WITH BASIC PENAL CODES, AND TO CERTAIN OTHER ACTS Act No. 5728 Date of Adoption: 23/ 1/ 2008 ARTICLE 472- Article 16 of the Act on the Protection of Competition dated 7/ 12/ 1994 and No. 4054 has been amended as follows together with its heading. "Administrative Fine ARTICLE 16 - The Board shall impose administrative fines on natural and legal persons having the nature of undertakings, and on associations of undertakings or the members of such associations where; a) incorrect or misleading information or document is provided in exemption and negative clearance applications as well as in applications for permission to mergers and acquisitions, b) mergers and acquisitions subject to authorization are carried out without the authorization of the Board, c) incomplete, incorrect or misleading information or document is provided or the information or document is not provided within the time specified or at all, during the application of Articles 14 and 15 of the Act, d) on-the-spot inspection is prevented or made difficult, for those specified under subparagraphs (a), (b) and (c); equaling one thousandth of the annual gross revenue of the undertakings and associations of undertakings or the members of such associations which generated by the end of the fiscal year preceding the decision, or where it cannot be calculated, which generated by the end of the fiscal year closest to the date of decision, as calculated by the Board, and for those specified under subparagraph (d); equaling five thousandth of their gross revenues to be determined in the same manner. However, the fine to be determined by this principle may not be less than ten thousand Turkish Liras. As follows from subparagraph (b) of this paragraph, administrative fines are imposed on each party in mergers, whereas they are imposed solely on the acquirer in acquisitions. The fact that on-the-spot inspection is carried out by court decision does not restrain the application of administrative fines as provided for in this Act regarding the prevention and making difficult of on-the-spot inspection. Those having committed behaviors prohibited under articles 4, 6, 7 of this Act are imposed administrative fines amounting up to ten percent of the annual gross revenues of the undertakings and associations of undertakings to be punished or the members of such associations which generated by the end of the fiscal year preceding the final decision, or where that cannot be calculated, which generated by the end of the fiscal year that is closest to the date of final decision, as calculated by the Board. Where undertakings or associations of undertakings are imposed administrative fines specified under paragraph three, executives or employees of the undertaking or association of undertakings which is detected to have had a determining impact on the violation are imposed administrative fines up to five percent of the fine imposed on the undertaking or association of undertakings. In deciding an administrative fine according to paragraph three, within the context of article 17 of the Misdemeanors Act dated 30/ 3/ 2005 and No. 5326, the Board takes account of factors such as the repetition and duration of the violation, the market power of the undertakings or associations of undertakings, their determining impact on the occurrence of the violation, whether they conform to the commitments made, whether they assist with the inspection, the gravity of the damage which has occurred or is likely to occur. Undertakings or associations of undertakings or their executives and employees which actively cooperate with the Authority for uncovering the violation of the Act may be held immune from the fines specified under paragraphs three and four, or be granted reductions on the fines to be levied pursuant to these paragraphs, taking into account the nature, effectiveness and timing of the cooperation and with the reasoning thereof clearly presented. Factors considered in the determination of the administrative fines to be levied pursuant to this article, conditions for immunity or reduction in the case of cooperation, as well as procedures and principles of cooperation shall be set by regulations to be issued by the Board. ARTICLE 473- Article 17 of the Act No. 4054 has been amended as follows together with its heading. "Relative Administrative Fine ARTICLE 17- Provided the fines laid down in paragraph one of Article 16 are reserved, in cases of a) Non-compliance with the obligations provided by or commitments given with a final decision or an interim injunction decision, b) Preventing or impeding on-the-spot investigation, c) Failure to submit the requested information or the document in time in respect of the application of Articles 14 and 15, the Board shall impose administrative fines on undertakings and associations of undertakings per day which amounts to five per ten thousand of the annual gross revenue of the undertakings concerned, and of associations of undertakings and/or the members of such associations, which is generated by the end of the preceding financial year and where it is not possible to calculate such revenue, of the revenue which is generated by the end of the closest financial year and which shall be determined by the Board. Administrative fines under subparagraph (a) and (c) of paragraph one may be imposed starting from the date when the period given for the fulfillment of the obligations stated in the decisions laid down in those subparagraphs expires. Administrative fine related to the action in subparagraph (a) may be imposed starting from the day when the decision providing for the obligation is notified unless such decision specifies a certain period. Administrative fine related to the actions in subparagraph (b) may be imposed starting from the date following the day when the action is taken. ARTICLE 474- Article 55 of the Act No. 4054 has been amended as follows: ARTICLE 55- Nullity actions against the Board's final decisions, injunction decisions and decisions on administrative fines shall be brought before the Council of the State, as the court of first instance. Applying for judicial review against Board decisions does not prevent application of the decisions and execution and collection of administrative fines. ARTICLE 475- Article 60 of the Act No. 4054 has been amended as follows: ARTICLE 60-The funds, paperwork and any properties of the Authority have the force of state property. The Chairman and members of the Board, and its personnel who commit offences about their offices are deemed as civil servants in respect of criminal liability. Those offences committed against the Chairman and members and the personnel of the Board in relation with their offices are deemed to have been committed against a civil servant. Provisions of the Act No. 4483 dated 2/12/1999 shall not apply to those persons in respect of offences they commit about their offices. ARTICLE 578- The following provisions of the act have been revoked kk)Articles 18 and 19 of the Act No. 4054 dated 7/12/1994, "Announcement: Final decisions on Coke/Soft Drinks and Raki Markets" The final decisions taken on 10.09.2007 by the Competition Board as a result of the examinations conducted in the coke/soft drinks and raki markets have been published on the website of our Authority. The Board decision on coke/soft drinks market is available at http://www.rekabet.gov.tr/pdf/07-70-864-327.pdf, while the Board decision on raki market is available at http://www.rekabet.gov.tr/pdf/07-70-863-326.pdf In the coke/soft drinks market , The Board has decided to examine the effects on the competitive conditions in the market of the exclusive contracts which are included in the sales system of Coca-Cola Satış ve Dağıtım A.Ş. (Coca-Cola Sales and Distribution Inc.) and which solely aim the sales of Coca-Cola products, to the detriment of the activities of competing firms. After taking the opinions of Coca-Cola Satış ve Dağıtım A.Ş. as well as the competing firms in the market, the Competition Board, which has examined and assessed the functioning and competitive conditions of the coke/soft drinks market, has unanimously decided 1-That the exclusive agreements signed between the Coca-Cola Satış Dağıtım A.Ş., which was found to hold a dominant position in the coke/soft drinks market concerning both the home channel and the on-premises consumption channel, and final points of sale would not benefit from the block exemption in terms of the market share of the undertaking, as per Article 2 of the Communiqué No. 2002/2, amended by Communiqué No. 2007/2. 2-That the contracts drawn between Coca-Cola Sales Satış ve Dağıtım A.Ş. and/or its dealers and points of sale together with the terms of exclusivity in these contracts, as well as practices which lead to de facto exclusivity such as free products, discounts, quotas, and cabinet exclusivity have effects that are incompatible with the exemption conditions listed in Article 5 of the Act no 4054; that, therefore, individual exemption may not be granted to the aforementioned contracts and/or practices. The aforementioned decision will have important results for both the undertakings and the consumers. This Decision shall facilitate new entries into coke/soft drinks market and prevent companies from disrupting the activities of the competitors via exclusive agreements or practices. At the same time, it shall increase the choices of the consumers at the points of sale. In the raki market, Elda Pazarlama Ticaret A.Ş. (Elda Marketing Trade Inc.) has made an application to the Competition Authority on April 2006, stating that Mey İçki Sanayi ve Ticaret A.Ş. (Mey Beverages Industry and Trade Inc.) held the dominant position in the raki market, that it made new entries into the market impossible through practices which aim to prevent the sale of competing products at points of sale, and that it hindered the activities of the incumbent undertakings. Elda Pazarlama Ticaret A.Ş. has requested an examination of the subject within the framework of competition law. After taking the opinions of Mey İçki as well as the competitors operating in the market and other relevant persons, the Competition Board, which has examined and assessed the functioning and competitive conditions of the market, has unanimously decided 1. That the purchasing contracts drawn between Mey İçki Sanayi ve Ticaret A.Ş., which was found to hold a dominant position in the raki market, and final points of sale would not benefit from the block exemption in terms of market share, as per Article 2 of the Communiqué No. 2002/2, amended by communiqué No. 2007/2. 2. That the aforementioned contracts and practices which are based on these contracts or which lead to de facto exclusivity such as free products, discounts and changes in the frequency of service have effects that are incompatible with the conditions of exemption listed in Article 5 of the Act no 4054, since they include an obligation not to sell competing products; and that, therefore, individual exemption may not be granted to the aforementioned contracts and/or practices. As a result of this decision, in the raki market which was previously opened to competition within the framework of the relevant legislation, Mey İçki -which is the successor of a former monopoly- was prevented from foreclosing the market by hindering new entry into market via agreements and practices that limit the sales of competing products or by complicating the operations of competing undertakings. With these two decisions that aim to achieve a more competitive market structure, entries into coke/soft drinks and raki markets shall be facilitated and new prospects shall be created for entrepreneurs. Additionally, the consumers shall also benefit from increased choices and competitive prices. Highlights from the Recent Board Decisions DECISIONS DATED MAY 8, 2008 Infringements of Competition Kodak Near East Inc Mergers and Acquisitions Aydın-Denizli-Muğla TEDAŞ08-32/397-134It has been decided that the acquisition of TEDAŞ's electricity distribution assets in the electricity distribution region comprising the provinces Aydın, Denizli and Muğla, by Aydem Güneybatı Anadolu Enerji Sanayi ve Ticaret A.Ş. (Aydem Southwest Anatolian Energy Industry and Trade Inc.) to be operated for a period of 30 years; 08-32 /401-l96 It has been decided that the "Authorized Distributor Contract" concluded between Antis Kozmetik ve Sağlık Ürünleri Tic. Ltd. Şti. (Antis Cosmetic and Health Products Trade Co. Ltd.) and Retina Estetik Hizm. Tic. Ltd. Şti. (Retina Esthetic Services Trade Co. Ltd.), as well as the draft contracts that are to be concluded with the other dealers and that have the same clauses, may not be given negative clearance certificate under article 8 of the Act No. 4054, that the contracts are not within the scope of the Block Exemption Communiqué on Vertical Agreements No. 2002/2 due to some restrictions they impose on the sales of the authorized distributors, that the contracts which are the subject of the notification shall be given individual exemption for a period of 5 years since all of the requirements enumerated under article 5 of the Act No. 4054 are satisfied.
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