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Competition Authority Publishes Draft Communiqué

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Competition
General

 

New Developments

The Competition Authority (“Authority“) published the Draft Communiqué on Commitments for Preliminary Investigations and Investigations on Anticompetitive Agreements, Concerted Practices, Decisions and Abuse of Dominant Position (“Draft Communiqué“) on its website on November 27, 2020. The Draft Communiqué aims to limit anti-competitive damages and save time and resource costs in detailed examination processes required for extensive competition investigations. Opinions, suggestions and evaluations on the Draft Communiqué may be submitted to the Competition Authority until December 28, 2020.

What Do the Developments Mean?

The Draft Communiqué regulates the conditions regarding the submission of commitments by the relevant undertakings or associations of undertakings in order to eliminate competition issues, making the commitments binding on the Competition Board for the relevant undertakings and associations of undertakings and observing the commitments. The Draft Communiqué implements the following procedures and principles:

  • Time limitation to submit commitment requests: Article 5 of the Draft Communiqué states that undertakings subject to investigation must submit their commitment requests within three months from the date of receipt of the investigation notification. Additionally, third paragraph of Article 43 of Law No. 4054 on the Protection of Competition (“Law No. 4054“), which regulates the commitment mechanism, stipulates that a commitment can be submitted during the preliminary investigation and investigation process. In addition, in parallel with this determination of the Law No. 4054, the Competition Board decided in the Arslan Nakliyat decision no. 20-36/485-212 dated 28.07.2020, that a commitment can be submitted until the investigation phase is completed.
  • Deliberations with the Authority: Article 6 of the Draft Communiqué states that commitment deliberations will start as soon as possible after the parties submit their commitment request to the Authority. According to the Draft Communiqué, the deliberations can be done verbally or in written form; verbal deliberations will be transcribed in a report.
  • Submission of alternative commitments prohibited: Article 8 of the Draft Communiqué states that the commitment letter clearly includes the elements of commitment and the Competition Board will not accept submissions entailing alternative commitments.
  • Content of the commitment letter: Article 8 of the Draft Communiqué outlines the elements that the commitments should entail. Accordingly, the commitments letter should explicitly entail the following elements: (i) the competition problems to be mitigated by the commitments, (ii) what the commitments entail, (iii) the date the commitments will begin to apply, (iv) the duration and manner in which the commitments will be applied, (v) other times important for the commitments’ application, (vi) on what grounds could these periods extend, (vii) the commitments’ effect on the market, (viii) how the commitments would solve the competition problem, (ix) how could the Authority observe the compliance with the commitments and (x) other aspects deemed necessary.
  • Revising previously rejected commitments: According to Article 10 of the Draft Communiqué, if the commitment is not found appropriate as a result of the evaluation made by the Competition Board, it is stated that the parties may make changes in the commitment within the framework of the evaluations of the Competition Board and the period determined or it may be decided to terminate the commitment process.
  • Second-time-submissions are prohibited: Article 13 of the Draft Communiqué states that if a commitment process is terminated by the Competition Board directly or after the undertaking has been given the opportunity to change the commitment, no further commitment request can be made.
  • Accepting commitments: According to the Draft Communiqué, the Board may make the commitment binding on the parties involved at any stage of the commitment process and decide not to open an investigation or to terminate the investigation if it considers that competition concerns can be resolved through the commitments submitted. The Draft Communiqué states that this decision of the Competition Board will not include any findings on whether the agreement, decision or practice generating the competition concern is a violation.
  • Observing the commitments: Article 15 of the Draft Communiqué states that observing the compliance of the parties to the commitment can be done by regularly submitting reports by the parties, appointing third parties for audit purposes, or cooperating with professional associations or relevant institutions and organizations. Nevertheless, Art. 9 of the Draft Communiqué states that “Commitments that do not require observation would be preferable over those that do”.
  • Draft Communiqué will also be applied to ongoing preliminary and full-fledged investigations when the Communiqué enters into force: The Draft Communiqué states that the communiqué provisions will also be applied to ongoing preliminary and full-fledged investigations once the Draft Communiqué enters into force. The Draft Communiqué will enter into force on the date of its publication on the Official Gazette.

Conclusion

The Authority published the Draft Communiqué on the procedures and principles regarding the implementation of the commitment 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. Opinions on the newly published Draft Communiqué may be submitted to the Competition Authority until December 28, 2020. It is expected that the Draft Communiqué and the eventual communiqué to come into force will enable the Authority and the parties under investigation to allocate resources more effectively for competition law enforcement.

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