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Antitrust In Turkey: Short History, Promising Future!
Fifteen years ago, as the Turkish Competition Authority (the TCA) recruited its very first assistant antitrust experts, the people in Turkey who had any inkling of the meaning of the word antitrust could be counted on the fingers of one hand, and educational and reference material was scarce. The first batch of antitrust newbies found a niche, but were barely equipped to build a workforce. Newly-inked books on Antitrust Law and Antitrust Economics were a reason to celebrate, and the decisions of the European Commission, the ECJ and the DOJ were sacred sources of knowledge.
In the infancy period of antitrust enforcement in Turkey, the TCA behaved gently towards the violators of the Competition Law mostly due to a lack of self-confidence. Later on, in its early stages, this behavior became established, due to having experienced the toughness of building human capacity in the area of antitrust. This term has been marked by the classroom teacher approach of the TCA. The reasoned decisions of even the most trivial cases have been written up in detail, and the reasoning was provided in an analytical and step-by-step manner, whereas punishments were mere slaps on the wrist compared to the international implementation examples.
Meanwhile, the number of the antitrust experts of the TCA exceeded one hundred, and the assistant experts of fifteen years past became seasoned veterans, most of whom hold PhDs in their areas of expertise. The private practice of antitrust kept up with the TCA, and the law offices and the corporate world of Turkey built a considerable antitrust capacity, most of which is conducted through the recruitment of the former antitrust experts of the TCA.
Obviously, the TCA shares this observation and assesses itself and the Turkish private sector to be ready for the next round. In 2011, we watched the TCA depart from its classroom teacher approach and assumed a drill sergeant attitude towards the Competition Law violators.
In 2011, the administrative fines imposed by the TCA total approximately TL 460 million1. This amount corresponds to more than half of the total fines imposed by the TCA since its establishment in 1997. A substantial part of this amount that exceeded TL 360 Million was imposed due to the violation of competition rules by cartels. It is notable that the amount of the administrative fines that were imposed on cartels in 2011 was almost ten times higher than those that were imposed in 2010.
Setting aside the increased activity and the level of fines imposed in 2011, the most remarkable move of the TCA was two investigations it conducted in the banking sector, which is generally assumed to be highly regulated and most compliant of all. The first investigation, finalized in 2011, was resolved with the imposition of antitrust fines on several banks, which alone shattered the myth of untouchable banks. The closing event of 2011 was the initiation of a major cartel investigation against 12 of the biggest banks of Turkey. This second investigation is approaching its final stages, and will likely leave its mark on 2012.
The year 2012 began with a major internal restructuring of the TCA. For the first time in the TCA history, and all at one time, the senior antitrust experts have been assigned to higher administrative posts within the TCA, such as to vice-president or head of department posts. This provided the antitrust experts easy access to the Competition Board members to promote their approach to, and their understanding of, the Competition Law that is known to be in favor of vigorous application of the Competition Law and strict deterrence of the infringements.
Three more developments in the area of secondary legislation regulating the functioning of the TCA, subtle, yet meaningful, shed light on the enforcement efforts of the TCA in the coming years.
In June 2012, the TCA issued long-awaited draft guidelines on the application of the Leniency Regulation. Still being subject to review and amendment, the TCA declared in these draft guidelines that it will not be as demanding with respect to the information and documentation to be submitted in the leniency application file. In order to conduct a succesful leniency application, to make a substantial contribution or to submit decisive evidence will not be required (which certainly will be more than welcome). Apparently, the TCA aims to destabilize and pursue the cartels at any cost.
In August, 2012, the TCA issued a Communiqué on the Handling of Complaints in which it sets quality requirements and establishes a prioritization system for complaints. The Communiqué establishes an informal period of fact-finding and assessment throughout which the case-handlers will not be able to use investigative powers, but will be able to gather information as to the complaint from the market, and as to the scope of the alleged infringement, via publicly available information sources. This new system for handling complaints represents major relief in the workload of, and time pressure on, the Supervision and Enforcement Departments of the TCA, and provides them with the ability to concentrate their efforts more selectively. Furthermore, to be able to observe the markets for a longer period of time will enable the antitrust experts to select the cases that indeed comprise a restriction of competition, with more precision.
At the end of August, 2012, the Competition Board issued a notice declaring its intention to raise the merger notification thresholds, less than two years after the commencement of the new thresholds regime, and requested all interested parties to submit their opinions. This reasoning is said to increase the efficiency of the merger supervision process by decreasing the number of filings, and by increasing the ratio of the transactions in the total number of notifications that cause competitive concern. Historically, the antitrust experts perceive the merger control procedure as a less efficient way of antitrust enforcement, and would be happy to exclusively concentrate on crashing cartels. This perception is to be clearly identified in the notice of the TCA hence, another move to put resources after cartels.
A wider look at the puzzle of the TCAs moves reveals that the TCA is drawing resources from activities that are considered to be less vital, in order to concentrate on cartel enforcement in Turkey in the years ahead. The bottom line is that it is a better time than ever to conduct an antitrust compliance check, and to consider the merits and demerits of a leniency application.
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