Grounds for the Articles

Article 1- The developments in today’s world have shown that competition in a market economy not only ensures effective utilization of the resources, but also causes a fall in the prices of the competing products and causes those undertakings which want to have a larger share in the market to increase the quality of their products and to use new technologies in production. This dynamism brought about by free competitive structure ensures a constant and balanced development in the economy of the country. On the other hand, the fall in the prices and the rise in the quality have a social benefit by protecting the whole society, that is, the consumers. For these reasons, the purpose of this act is for the State to ensure the protection of competition through the necessary legal arrangements. 

Article 2- It is normal to expect the benefits of competition from all areas of the economy as a whole. For this reason, competition rules must be applied to all undertakings which have economic operations. It is not important whether the undertakings belong to public institutions or to private persons. Even though the goals of protecting the public interest and public order come to the forefront in the competition law, the fulfillment of the duties of the undertakings charged with serving the general economic interests should not conflict with the competition rules.

The system called “effect theory” in competition law literature is also adopted in this act. In other words, those undertakings whose headquarters are out of the borders of the Republic of Turkey but who operate in Turkey also fall within the scope of this act.

Article 3- Some terms and concepts mentioned in the Act are defined in the article for the purposes of the implementation of this Act. Principle of economic wholeness is adopted for the definition of undertakings. In other words, a subsidiary will not be evaluated independently, but together with the company or companies it is connected to.

While intellectual or physical activities or activities that concern both, undertaken for a price or benefit, are defined as service, in its largest sense this definition also includes banking, insurance, money, credit, capital, knowledge and the other elements. Of course, the labor market, where the principle of collective bargaining is accepted, is not included in this definition.

Article 4- Since the purpose of this Act is the protection of competition, agreements and practices between undertakings which prevent, restrict or distort competition must be prohibited. For the purposes of the article, the term agreement is used to refer to all kinds of compromise or accord to which the parties feel bound, even if these do not meet the conditions for validity as regards the Civil Law. It is not important whether the agreement is written or oral. Even if the existence of an agreement between the parties cannot be established, direct or indirect relations between the undertakings that replace their own independent activities and ensure a coordination and practical cooperation are prohibited if they lead to the same result. Thus, it is intended to prevent the undertakings from legitimizing acts limiting competition via fraud against law. Most of the time, in order to deal with their common problems, undertakings form associations among themselves that may or may not have a legal personality. These associations can take decisions that serve to generate more earnings for their members by preventing competition between the members. Such decisions are also against the competition system and are prohibited.

Agreements restricting competition may be in the form of vertical or horizontal agreements. Agreements made within the same level are called horizontal agreements and it is accepted that these agreements have competition distorting effects per se. Based on this view, the second paragraph of the Article lists the most common agreements limiting competition and emphasizes that these types of agreements are prohibited per se. It must also be noted that the examples mentioned in this paragraph are not restraining, but enumerated. 

In a legal regime where agreements restricting competition are prohibited, these agreements are generally made in secret and proving their existence is quite difficult, sometimes even impossible. For this reason, in case the circumstances stated in the third paragraph of the article exist, presumption that undertakings are engaged in concerted practice has been accepted. Thus the burden of proof for not being engaged in concerted practice has been passed to the relevant undertakings and it has been intended to prevent that the Act became unworkable due to the difficulty of proof.

Article 5- Implementation of the prohibition of Article 4 in an absolute manner may have some unwanted consequences. For this reason, if beneficial effects caused are greater than the harmful effects, agreements restricting competition must be exempted from the prohibition of Article 4. In order for such an exemption to be granted, four conditions listed in the article must exist at the same time. First of all, the agreement or concerted practice or decisions of an association of undertakings limiting competition must have positive effects on the economy. In case these positive effects are not reflected on the consumer and stay as firm profits, the exemption will not be implemented. The fact that the consumer receives a just share of the benefit created also reveals the social side of the competition law. Also, where less limitation on competition can be sufficient to achieve these beneficial effects, the agreements will not be granted exemption. Only those competition limitations which are necessary and compulsory for achieving the beneficial effect will be granted exemption. It is such that, with these limitations, competition must not be eliminated in a significant part of the relevant product market.

Exemption decisions will be made for certain periods and these decisions will be renewable if the specified conditions exist. Thus, the Board will be given the opportunity to monitor the changes that may emerge or the developments that may cause a restriction in competition within the relevant market, after the exemption decision has been taken. 

Also, the chance to be granted a block exemption by a communiqué of the Competition Board is given to the groups of agreements which carry the conditions listed in the First paragraph. Thus, both a legal certainty is secured for these agreements and the beneficial effects of these agreements are brought into the economy.

Article 6- In terms of competition law, an undertaking’s growth through its own internal dynamics and obtaining a dominant position in various sectors is not an objectionable situation. On the contrary, the concentration of capital and increase of capital accumulation and investments in our country are desired. This is because, in the developing world, foreign trade is increasing day by day, customs barriers are being lowered or totally removed by various agreements. Besides, our country has applied for full membership to the European Union. Under these circumstances, it is necessary for undertakings to grow and become powerful enough to compete within the Union and the world. 

On the other hand, it is prohibited for the undertakings that obtain dominant position in the market to abuse their position to restrict, prevent or distort competition in our country or use their position in a way which would cause these effects.

In some cases the undertaking may gain a dominant position because of the protections provided by law. Especially industrial and trade property rights grant such a protection. The use of these rights must in no way serve the purpose of eliminating competition. Also, the most commonly encountered abuse cases in practice are listed as examples in the second paragraph and the cases are not limited to these examples.

Article 7- In the article, it is ruled that mergers and acquisitions will be prohibited in case they create a dominant position or strengthen the dominant positions of more than one undertaking in such a way as to significantly decrease competition in the market. The point to be noted here is the fact that growth of undertakings outside of their own internal dynamics has been placed under control. In fact, while dominant position is not a cause for prohibition in Article 6, this article prohibits undertakings from obtaining a dominant position by mergers and acquisitions, in such a way as to significantly decrease competition. It is an accepted fact that obtaining a dominant position through mergers or acquisitions causes a larger distortion in the competitive regime than the undertaking’s obtaining the dominant position through growth with its own internal dynamics.

In the second paragraph of the Article, as a rule, no obligation is brought to obtain permission from the Board for the merger and acquisition transactions to gain legal validity. In other words, merger and acquisition transactions will be valid without the permission of the Board. 

However, there will be exceptions to this rule. Invalidating mergers and acquisitions falling under the scope of the first paragraph of the Article on the grounds that they violate this Act after they gain legal validity will cause some problems in practice. For this reason, in the second paragraph, the Board has been granted the right to issue communiqués concerning which types of mergers and acquisitions must obtain permission beforehand to in order to gain legal validity. 

Article 8- In order to ensure the legal certainty and safety of their agreements, decisions, concerted practices or concentrations, undertakings and associations of undertakings must be able to apply to the Competition Board and request to receive a document stating that their operations are not in violation of the competition rules. This is necessary to remove uncertainty from business life. 

Article 9- The article arranges how the Board must act, in case infringements of the Articles 4, 6 and 7 are established, to terminate the infringements and states that the Board can take interim measures if there are strong signs which show serious and irreparable damages may occur until the final decision is made.

Article 10- In the first paragraph of the Article the periods in which agreements must be notified to the Board for exemption and negative clearance are listed.

In the second paragraph, it is stated that the Board will either give permission to the mergers and acquisitions or take them into final examination within fifteen days after their notification to the Board, and it is ruled that in the latter case these will be held in suspension until the final decision and can not be put into practice. The intention in keeping the notification period of the Board short is to prevent losses to the undertakings which made the merger or acquisition agreement because of the increase in time period.

The third paragraph of the article aims to prevent losses to the undertakings because of uncertainty in case the Board takes no action in relation to the notifications within the prescribed period.

Article 11- Naturally, the actions that must be taken in case the merger or acquisition transaction is not notified to the Board differ from the cases stated in Article 10. For this reason, the situations where a merger or acquisition does not infringe this act and where it does are provided for in detail in the article. 

Article 12- Making notifications via a particular form will both ensure that undertakings make notifications in conformity with the law, and that the Competition Board assesses the notifications more easily.

Article 13- Exemption and negative clearance decisions taken by the Board are not absolute. Where the cases enumerated in the article exist, such decisions may always be revoked by the Board.

Article 14- The Competition Board will need very detailed information in order to be able to fulfill the duties entrusted to it by this act. It shall obtain such information primarily from the concerned undertakings and associations of undertakings. In addition to this, it might need to obtain some information from several public organizations and private undertakings. Organizations other than the concerned parties may not deny the request of the Board for information and document, either.

Article 15- The concerned parties will possibly be imposed administrative fines separately when they do not provide the requested information or when they abstain from oral or written explanation or when they do not permit an examination to be made on their movables and real estates. The parties always hold the right to request that the experts carrying out the examination present the certificate indicating their assignment.

Article 16- Two types of fines are provided in the article. Acts punished with fines might have been committed intentionally or in negligence. Acts specified in the first paragraph are minor or more procedural acts, in comparison with the second paragraph. The second paragraph on the other hand provides substantial acts.

In order to incentivize undertakings to make notifications within due time, fines are not applicable to violations notified within due time, for the implementations until the Board makes a decision, unless they expressly violate this law. However, if the concerned undertakings had engaged in violations other than those contained in the notification, there is no provision which prevents imposing fines for those.

Fines are imposed on natural persons having the nature of undertakings, on the legal personality in legal persons, on the legal personality in the associations of undertakings having legal personality, and on the members forming that association in the associations of undertakings without legal personality. Furthermore, a paragraph has also been added stating that natural persons serving in managerial bodies of the legal personality shall be fined personally, for purposes of being deterrent.

Article 17- In order for the Board to be able to put the decisions and the measures it took into practice, there is a need for another coercive power than those provided in article 16. This must be such a coercion that the undertaking should see benefit in conforming to this decision and measure without delay. The best method to ensure this is to apply a certain amount of fine for each passing day without the decision or the measure being conformed to. In doing so, undertakings will be incentivized towards meeting the decisions without delay. 

Article 18- It is emphasized that the fines in articles 16 and 17 are not penalties in the sense of criminal code, but are administrative fines. Fines shall apply separately to all parties acting contrary to this Act. 

With the provision inserted in the article relating to how long periodic fines shall continue, it has been stated that in case the court makes a decision to cease enforcement in the event that the parties resort to jurisdiction against the decision, the fine shall not run as of the time of resort to the court, however that the fine shall be imposed for the period elapsed until the time of resort.

Article 19- Limiting, to a certain period, the authority of the Board to make a decision about a violation and to issue a fine is necessary in respect of ensuring legal certainty and legal safety. In this regard, prescription periods during which the Board may impose administrative and periodical fines and the cases which interrupt these periods are provided in the article. 

Article 20- There is a need for an institution which operates independently, has administrative and financial autonomy and is able to take its decisions away from the influence of any organ, authority, body and person, and freely, to carry out transactions relating to the legal regulations as well as the measures, regulations and supervisions aimed at the protection of competition, provided for by this Act. The Competition Authority has been formed based on this need. 

The main principle taken into account in the formation of the authority is to ensure that the authority has a structure enabling to be away from political pressures as well as from different influential methods of undertakings and associations of undertakings which are to be parties to its decisions. 

The Board is related to the Ministry of Industry and Trade in administrative terms. 

Article 21- The organizational structure of the Competition Authority is composed of the Competition Board, the decision making body of the authority; Presidency and Service Units. 

Article 22- The highest and the most important organ of the Authority is the Competition Board. In accordance with this Act, the authority to realize measures and regulations relating to the protection of competition and to make the final decision in cases of contradiction to this act belongs to the Competition Board. In this regard, formation of the Board poses importance. The aim has been to ensure that the members of the Board may work independently from any sort of political pressure. For this reason, only three of the total members of the Board are determined by the political authority and four of the remaining eight members are elected from among the candidates to be nominated by the Board itself, whereas the remaining four are elected by the high jurisdictional organs and the Interuniversity Board and The Turkish Union of Chambers and Commodity Exchanges.

The aim of the second paragraph has been to create an opportunity which would reward the work of the qualified personnel employed in the Agency who are knowledgeable, experienced and experts in their fields. In this way, selection of qualified members for Board membership will be ensured, while at the same time, working at the agency will be incentivized and the personnel will be encouraged for self development.

Article 23- Since the final decisions of the Board will have a legal quality, on one hand, such as the determination of the violation of this act and have a nature containing some economic establishments, analyses and comments because the violation of the act is an economic phenomenon on the other hand; members of the Board should be composed of legal specialists, especially competition law specialists and industrial economists.

Article 24- The term of office of the members of the Board has been determined as six years. However because all members change at the end of the six years and a certain period will pass before newly selected members adapt to the works of the Board, a system where one third of the members shall be renewed every two years, has been adopted so as not to cause a breakdown in the works of the Board.

There are some provisions introduced in the second paragraph of the Article as to the job security of the Board members. Except for the cases enumerated in the paragraph, offices of the Chairman and members of the Board may not be terminated due to any reason before the expiry of their terms.

Article 25-
 Because Board membership is a peculiar duty, board members have been conferred some special prohibitions apart from the general prohibitions. The article envisages detailed provisions as to the prohibitions. 

Article 26- Based on the importance of the duty carried out, it has been provided for that Board members shall take an oath before they assume offices.

Article 27- The article enumerates the duties and powers of the Board in fourteen subparagraphs in a detailed manner.

Article 28- 
Functioning principles of the Board have been provided. The last paragraph of the article states that the members of the Board may not take part in negotiations and votings in events concerning themselves and their relatives. The fact that the conditions for meeting and decision quorums have been toughened increases the importance of participation in the meetings by all members.

 In the article, Presidency has been thought of as an organ which is composed of a President, Deputy President and Vice presidents, and some powers of the administrative structure of the Competition Authority which are not exercised by the Board have been granted to the Presidency. The Presidency is responsible for direction and management of the Authority, in general. 

Article 30- The Article enumerates the duties and powers of the Presidency in ten sub paragraphs, in a detailed manner.

Article 31- Duty of the Vice Presidents of the Board, in principle, is to assist the President in the management of the service units. Vice presidents are not members of the Board and they do not participate in the meetings of professional decision making. 

Article 32- The article states that the service units of the Authority shall be organized as Department Head Offices. Regulations as regards the lower levels shall be determined by Regulation as per the nature of the service.

Article 33- Excluding, from supervision, the transactions of the Board other than final decisions may not be considered. In principle, final Board decisions are subject to the jurisdictional supervision. A provision has been included suggesting that the transactions and disposals other than final decisions shall be subject to the supervision of the Court of Accounts. 

Article 34- 
The personnel to be employed in the Authority are required to possess certain qualities. In order to ensure this, employing expert professional staff has been foreseen. Two types of expert staff are to be employed in the Authority. One of them is the expert professional staff carrying out duties within the framework of this Act and the other is the specialized non-career personnel to be employed in subjects requiring a certain expertise such as computer operators or statisticians.

Having adopted the principle that the personnel of the Authority shall be subject to the Civil Servants Act numbered 657 in all respects other than wages and financial rights, forming a structure in conformity with Article 128 of the Constitution has been attempted to.

Article 35- Forming a professional career group under the title of Experts on Competition has been opted for by these articles and the qualities required for appointment as Assistant Experts on Competition have been enumerated.

Article 36- The article clarifies the conditions for appointment as Experts, in detail.

Article 37- 
Because the personnel of the Competition Authority is not subject to the Civil Servants Act numbered 657 in terms of wages and financial rights, there emerged a need for providing herein, the wages and other financial rights. 

Article 38- The Article introduces provisions relating to the retirement transactions and the assessment of service periods of the Board members and other personnel.

Article 39- There are provisions as regards the revenues of the Board.

Article 40- In general, provisions regarding the procedure to be followed by the Board in its examinations, inquiries and investigations have been prescribed. 
Within this framework, the aim has been that the Board primarily takes into evaluation any informing, complaint and application filed with it, without fail, and that informing and complaints are handled in a serious manner. However, if every informing and complaint is subject to the procedure contained in the following articles of this Act, this would result in the Board being put under an unbearable burden and a waste of time and labor in some cases.

Article 41- For this reason, a system has been adopted where the applications made to the Board is subjected to a preliminary inquiry and depending on the outcome of this, the inquiry is either terminated upon being found frivolous or it is decided to be deepened and proceeded with.

The point needing to be highlighted here is that the Board decision suggesting that there is no need for an inquiry is a final decision as well and the procedure relating to this is subject to the provisions regarding final decision in the following articles of this act.

Article 42- The Board is required to enlighten those who inform or make complaints, on what type of transactions are carried out as regards the applications.

In the second paragraph of the article, it is ruled that in case the complainant does not send any notification within due period determined by the Board, the complainant’s demand shall be considered to be denied; everyone who proves to have direct or indirect interest might resort to jurisdiction against the Board decisions in this situation.

Article 43-
 Processes, which shall be followed in relation with the investigation stage if the Board decides that the investigation shall continue in depth after the preliminary investigation stage ends, are explained in the article.

In the second paragraph, it is ruled that the Board shall inform the undertakings about which it carries an investigation and demand their first written defense. The article aims to assure fulfilling the requirement to inform undertakings or association of undertakings immediately about what kind of assertion or complaint they are charged of.

Article 44- The investigations of the Board are not confidential. In order to use the right to defense fully, parties could obtain copies of all the documents and evidence prepared by the Board against them until the hearing is held. Hence, it would be possible to use the right to defense precisely. In other words, parties do not meet anything unexpected.

On the other hand, the Board cannot give a final decision depending on the matters not announced to the parties which are therefore not given the right to defense.

Article 45- The report prepared at the end of the investigation stage shall be sent to the parties and to the Board for final decision. At this stage, parties might make their objections and defense in due time. In this case, those who prepared the report are given the right to give additional opinion.

Article 46- The hearing is not obligatory. If the parties think that they could defense themselves better by hearing, they should make their demand in the given time periods. The Board might also deem it necessary to conduct a hearing.

Article 47-
 This article explains the principles related to the hearing in detail.

Parties might participate in the sessions together with their representatives in order to defense themselves. In addition, complainants who prove to have direct or indirect interest might also participate in person or by their representatives.

Article 48- 
This article essentially provides in detail when the Board shall give the final decision in certain situations after the investigation is completed.

The point to be clarified here is assuring that the decision is taken immediately without protraction after the investigation is completed. The aim is to prevent parties from taking losses due to pending.

Article 49- The hearing is important in respect of the final decision. In this meeting, the parties have the opportunity to present clearly, before the Board, their defense that they could not express in writing. The hearing is important for the Board members as well. They have the opportunity to make a fairer judgment through understanding the case better thanks to the hearings in the meetings. In this respect, the article aims for assuring the participation of members who are present at the hearing to discussions for the final decision.

Article 50- Regulations related to the procedure of discussions for the final decision are cited in the article.

Article 51-
 Final decisions of the Competition Board have a nature of creating legal and economic outcomes. The parties of the decisions would be undertakings or associations of undertakings that play important roles in our economic life. In this regard, heavier quorums are sought in order to assure that as many Board members as possible are present for taking decisions.

However, quorums for meetings and decisions made heavier are mitigated in paragraph two in order to prevent the Board from being unable to take decisions due to not making a quorum.

Lower quorums are accepted in paragraph three depending on the view that heavy quorums are unnecessary for decisions except from final decisions.

Article 52- 
The points deemed necessary to be present in final decisions of the Board are provided in detail.

Article 53- The article provides the procedure for writing Board decisions. Board decisions shall be published to be announced to third parties in a way that does not conceal commercial secrets of the parties.

Article 54- It is important to determine clearly when the time periods start in respect of carrying out processes related to the procedure. The aim is to prevent problems about this issue in this way.

Article 55- Final decisions of the Board are under jurisdictional review. As their administrative nature is more dominant, the Council of State is provided to be the resort to jurisdiction for Board decisions. As Board decisions essentially have economic nature at the same time, the fact that the Council of State, which could have members graduated from departments apart from Faculty of Law, has an institutional structure suitable for evaluating Board decisions better, might be counted as another reason for choosing the Council of State as the resort to jurisdiction.

A provision stating that fines shall not be paid until they are finalized is added to the draft and it is partially separated from the principles of Administrative Law. However, in case parties apply to the court, Board decisions are subjected to jurisdictional review and parties are prevented from experiencing losses. Moreover, decisions are subjected to the provisions of the Act on the Procedure for the Collection of Public Receivables in order to assure the collection of fines.

Article 56- Part Four, which constitutes these articles, provides the legal nature of agreements and decisions contrary to the Act and results of restrictions of competition in private law.

Pursuant to the article, it is ruled that all kinds of agreements and decisions contrary to Article 4 of the Act are invalid, performance of actions resulting from these cannot be required, in case actions performed before are demanded back, it is provided that the debt payable is limited to the remnant amount and Article 65 of the Code of Obligations, which states that things given cannot be demanded back for realizing an unjust and immoral aim, cannot be applied to disputes arising from this Act.

Article 57- According to the article it is ruled that real or legal persons having or not having the nature of an undertaking which bear loss due to distortion of competition might compensate the loss from parties causing the loss.

Article 58- The Article provides how the loss might be compensated, what kind of losses shall be compensated and how they shall be calculated within the frame of provisions of Private Law.

Article 59- The article provides, in parallel with paragraph three of the Article 4, the concerted practice presumption which transfers the burden of proof to the defendant party in case certain evidence exist.

Article 60- According to this article, money and goods as well as every kind of documents belonging to the Authority are counted as state property, members and members of personnel who commit a crime shall be punished like public personnel and crimes committed against them shall be considered to be committed against public personnel.

Article 61- It is stated that notices to be given according to this Act shall be given in accordance with the provisions of the Notice Act in order to ensure that notices depend on certain principles and to avoid disputes due to notices.

Article 62- The Article provides how the regulations, except from those stated in this Act, on subjects such as working principles of the Authority and employee rights shall be enacted.

Article 63- Acts and provisions which the Authority is not subjected to and exempt from are listed.

Temporary Article 1- Since it is provided that two thirds of the Board members shall be renewed every two years and which members’ terms of office shall end in the first, second and fourth years as the Board is not formed in the first appointment, regulations related to the selection of six members among the Authority members to be appointed to the Board are laid down in the article. For the first appointment members who are essentially determined by the Board shall be determined by the Prime Minister and the Minister of Industry and Trade for only once.

Temporary Article 2- The Article provides the due date for the notification to the Board of agreements and decisions made at the time this Act enters into force.

Article 64- According to this article related to enforcement, it is stated that provisions related to fines and periodic fines shall enter into force one year later and other provisions shall enter into force on the date they are published. With this provision, undertakings and associations of undertakings are given a certain amount of time for complying with the Act. Not applying the punishment provisions shall be a hindrance for the operability of the Act; however, the Board might apply other measures except from fines at any time. It is considered compulsory to give undertakings a certain amount of time for the Act, which was unprecedented and which enters into force for the first time.

Article 65- It is the Article related to the enforcement of the Act.