The Competition Authority (“Authority“) published the Draft Communiqué on Agreements, Concerted Practices, Acts and Conduct of Association of Undertakings that Do Not Have an Appreciable Effect on Competition (“Draft Communiqué“) on its website on October 23, 2020. The Draft Communiqué aims to establish the de minimis mechanism, which allows public funds to be directed towards investigating more important violations instead of violations that do not significantly restrict competition. Opinions, suggestions and evaluations on the Draft Communiqué may be submitted to the Competition Authority until November 23, 2020.
What Do the Developments Mean?
The Draft Communiqué regulates the conditions under which the Competition Authority may decide not to pursue investigations on the agreements, concerted actions and decisions and actions of association of undertakings deemed not to significantly restrict competition in the market. The procedures and principles specified in the Draft Communiqué are:
(i) if the aggregate market share held by the parties to the agreement does not exceed 10% on any of the relevant markets affected by the agreement where the agreement is made between competing undertakings; and
(ii) if the market share held by each of the parties to the agreement does not exceed 15% on any of the relevant markets affected by the agreement, if the agreement is made between non-competing undertakings.
The Draft Communiqué states that the aggregate market share of parties should not exceed 10% on any of the relevant markets affected by the agreement if it is difficult to classify whether the undertakings are competing or non-competing parties, or if the relevant decision belongs to an association of undertakings.
The Draft Communiqué has a specific provision for vertical restrictions. Accordingly, the aggregate market share of competing or non-competing undertakings should be below 5% to benefit from the de minimis mechanism if the parallel networks formed by vertical restrictions cover more than 50% of the relevant market.
Last but not least, the Draft Communiqué indicates that it will not be deemed to be an appreciable restriction on competition if the market shares of the contracting parties or members of the association of undertakings are above the specified thresholds by a maximum of 2% during the agreement or the decision period for two consecutive calendar years.
The Authority published the Draft Communiqué on the procedures and principles regarding the implementation of the de minimis mechanism and opened the Draft Communiqué to comments, recommendations and evaluations from the public. This mechanism was added to the Law No. 4054 on the Protection of Competition through the newly enacted Law No. 7246, which entered into force on June 24, 2020. The Draft Communiqué bears significant similarities to the European Union’s Commission Notice on agreements of minor importance which do not appreciably restrict competition under Article 101(1) of the Treaty on the Functioning of the European Union (De Minimis Notice), particularly on the framework and threshold market shares. Opinions on the newly published Draft Communiqué may be submitted to the Competition Authority until November 23, 2020. It is expected that the Draft Communiqué and the eventual communiqué to come into force will enable the Authority to allocate public resources more effectively for competition law enforcement.
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