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New Regulation on Active Cooperation/Leniency Enters into Force in Turkey

New Regulation on Active Cooperation/Leniency Enters into Force in Turkey

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A new Regulation on Active Cooperation for Detecting Cartels (“Regulation”) in Turkey entered into force on 16 December 2023. The Turkish Competition Authority (“TCA”) also held a helpful webinar on the topic, highlighting the differences between the old and new regulation. In this article, we highlight two changes that we consider to be the most important: (i) applicants are now required to submit documents that contribute added value; and (ii) applications from cartel facilitators are now explicitly welcomed. Lastly, we present an overview of the conditions for full immunity and for reductions in administrative monetary fines.

The new Regulation now requires applicants to provide documents that provide “added value” 

Under the old regulation, applicants were not required to produce documents that would contribute significant added value to the TCA’s investigation. The old Guidelines on the Explanation of the Regulation on Active Cooperation for Detecting Cartels (“Old Guidelines”) explicitly highlighted this point.

Consequently, any applicant was able to apply for leniency by providing any document not at the disposal of the TCA, e.g., correspondences about a cartel, information about products in relation to a cartel, information concerning the period a cartel was active, or explanations to documents already at the TCA’s disposal. This was in fact recently confirmed by the TCA in its Beypazarı decision. In this decision, the applicant benefited from leniency by providing certain explanations and submitting an additional correspondence, without providing any added value.

However, as noted by the TCA during its webinar, under the new Regulation, applicants are now required to submit documents that provide an added value to the investigation. According to the Regulation, a document that contributes an added value is defined as follows: “Considering the documents already in the Board’s possession, documents and information that would strengthen the Board’s ability to prove the existence of a cartel.

Applications from cartel facilitators are also welcomed

The TCA recently changed its approach in relation to cartel facilitators. In the past, the TCA did not consider cartel facilitators as a party to the cartel. In both its Duru Bilişim and Taximeter decisions, the base fine for cartel facilitators was calculated based on the category “other infringements” as opposed to “cartel infringements”. However, the TCA recently changed its approach in relation to cartel facilitators in its Covid Retail I decision, where the cartel facilitator, Savola, was punished as a part of the cartel.

The Regulation now explicitly refers to cartel facilitators and states that an application from them is also acceptable. Consequently, it is now clear that cartel facilitators can also apply for full immunity, provided they fulfil all conditions. As such, we expect the TCA to embrace its change of approach and to penalise cartel facilitators as a party to the cartel.

Conditions for Immunity and Reduction in Monetary Fines to be Imposed

There is no difference between the Old Guidelines and the Regulation in terms of the time windows to apply for leniency or for full immunity:

  • If no investigation at the time of application: To be the first application prior to an investigation (preliminary or full-fledged).
  • If a full-fledged or preliminary investigation is initiated: Being the first applicant until the receipt of the investigation report, and if the TCA has no evidence to prove a violation. 

If the applicant does not satisfy the conditions for full-immunity, these are the conditions for reduction in the administrative monetary fine:

  • Applying within 3 months following the receipt of the investigation notice and, in any case, prior to the receipt of the investigation report. The reduction rates will be as follows: 1st applicant: 25-50%, 2nd applicant: 20-40%, 3rd and following: 15-30%.

Under the old regulation the applicable time window was prior to the receipt of the investigation report and the reduction amounts were as follows: 1st applicant: 1/3 – 1/2, 2nd applicant: 1/4 – 1/3, 3rd and following: 1/6 – 1/4. Accordingly, the time windows and the reduction amounts are now amended.

Conclusion

Following the introduction of the settlement mechanism to Turkish competition law in 2021, the lines separating the leniency and settlement mechanisms were relatively blurred at times. Therefore, the TCA decided to draw a clear line between the settlement and leniency mechanisms by introducing the “added value” criterion. 

As such, the leniency mechanism’s primary aim— obtaining evidence—is underlined. Another rationale behind the amendments to the legislation is to maintain the deterrence of punishments. Before the amendments, undertakings were able to invoke the settlement and leniency mechanism together to benefit from significant fine reductions. In the Beypazarı decision, together with a reduction in fines based on the early payment procedure, the undertaking received an 80% reduction of the fine.

Under the new Regulation, the newly introduced “added value” criterion makes it harder for undertakings to rely on both mechanisms. Separately, the inclusion of cartel facilitators and the introduction of stricter temporal limits, as noted above, will also have significant effects in the TCA’s upcoming antitrust investigations.

By Orcun Horozoglu and Enis Doga Kucukay, Associates, Kinstellar