On 9 August 2021, the Turkish Competition Authority (“Authority“) announced on its official website that its investigation against Türk Philips Ticaret A.Ş. (“Philips Turkey“), Dünya Dış Ticaret Ltd. Şti., Melisa Elektrikli ve Elektronik Ev Eşyaları Bilg. Don. İnş. San. Tic. A.Ş., Nit-Set Ev Aletleri Paz. San. ve Tic. Ltd. Şti. and GİPA Dayanıklı Tüketim Mamülleri Tic. A.Ş. was concluded with the newly introduced settlement mechanism for each investigation party through the Turkish Competition Board’s (“Board“) decision dated 5 August 2021 and numbered 21-37/524-258. You may find the original Turkish version of the announcement here.
The Board decided to launch the relevant investigation following the preliminary investigation initiated against Philips Turkey based upon the allegation that Philips Turkey violated Article 4 of the Law No. 4054 on the Protection of Competition (“Competition Law“) through restricting its authorized dealers’ online sales and determining their resale prices through its decision dated 7 January 2021 and numbered 21-01/9-M. You may find the original Turkish version of the announcement here.
What Do the Developments Mean?
The settlement mechanism has been introduced by Law No. 7246 Amending the Competition Law, which entered into force on 24 June 2020 and the Authority’s Regulation on the Settlement Procedure for Investigations on Anticompetitive Agreements, Concerted Practices, Decisions and Abuse of Dominant Position (“Regulation“), which stipulates the procedures and principles for the settlement, entered into on 15 July 2021.
Accordingly, the Board, upon the request of the investigated parties or ex officio, could initiate the settlement procedure by considering the procedural benefits derived from concluding the investigation process rapidly and any differences in opinion of the investigated parties and the Board itself on the existence and scope of the violation. Upon the settlement discussions, the Board could settle with the investigated parties, who accept the existence and scope of the violation, until the official service of the investigation report and could terminate the investigation with settlement.
In brief, below are the key points in terms of the implementation of settlement procedure:
- The settlement mechanism is applicable for any kind of anticompetitive conduct.
- Investigated parties can settle before the official service of the investigation report.
- Non-settlement does not harm the original investigation procedure.
- Parties can withdraw their settlement request until the submission of the settlement letter.
- The Regulation envisages a 10% to 25% reduction in fines.
- Parties can benefit from both the leniency and settlement mechanism at the same time.
For detailed explanations about the Regulation and the settlement mechanism, you may find our legal alert on the Regulation here.
The implications of commitments mechanism, which is another tool introduced by the Law No. 7246 Amending the Competition Law, were observed even before the enforcement of the Communiqué No. 2021/2 on the Commitments To Be Offered in Preliminary Investigations and Investigations Concerning Agreements, Concerted Practices and Decisions Restricting Competition and Abuse of Dominant Position (e.g., Havaalanı Yer Hizmetleri, 5 November 2020, 20-48/655-287; MNG, 10 December 2020, 20-53/746-334; S Sistem, 10 December 2020; 20-53/751-335; THY, 11 March 2021, 21-13/169-73; OSEM/Insurance Association of Turkey, 7 January 2021, 21-01/8-6; Yemek Sepeti, 28 January 2021, 21-05/64-28). Yet, there were no Board decisions on the implementation of the settlement mechanism after its introduction to the Competition Law until now.
The Board’s decision terminating the investigation against Philips Turkey and its authorized dealers with settlement is the first reflection of the implementation of the settlement mechanism in Turkish competition law practice after the amendments on the Competition Law entered into force in June 2020. The details of the settlement decision, including the administrative monetary fine imposed upon settlement, would be available following the announcement of the Board’s reasoned decision. However, this development shows that both the Board and the investigated undertakings now have another tool to consider to save time and resources in investigations by concluding the investigation process rapidly and conclusively.