Agency Agreements in Turkish Competition Law

In Turkish competition law practice, the relationship between an undertaking and its agency is in principle not considered as an anti-competitive agreement within the scope of Article 4 of Law No. 4054 on the Protection of Competition (Law No. 4054) due to the fact that the agency and the undertaking are considered to be within the same economic entity. In this respect, agency agreements are in principle not subject to Article 4 of Law No. 4054. The main factor which determines whether the agency agreements fall within the scope of Article 4 of Law No. 4054 is whether the agency takes a commercial or financial risk in relation to the activities assigned to it by its client. According to the Guidelines on Vertical Agreements, in case the agency does not assume any financial or commercial risks due to the agreement it concludes or mediates, the relationship between an undertaking and its agency is deemed to be beyond the scope of Article 4 of Law No. 4054. In such a case, the buying or selling activities of the agency are considered as a part of the relevant undertakings’ activities. On the other hand, if the agency undertakes all of the risks, it will need to freely set its own marketing strategy in order to ensure a return on its investment. In this case, the agreement in question may fall under Article 4 of Law No. 4045 and may be assessed under Block Exemption Communiqué No. 2002/2 on Vertical Agreements. While determining which party undertakes the risk, which is the crucial point for the application of Article 4 of Law No. 4054, the Turkish Competition Board should take into consideration the legal relationship between the parties as well as the economic characteristics of the market.

Agency agreements can generally include restrictions that prevent an undertaking from appointing another agency for the relevant transactions at the customer or regional level (exclusive agency clause) and/or prevent the agency from serving as an agency or distributor for competing undertakings (non-compete clause) (e.g., HSBC/Euler (09.09.2015; 15-36/551-179) and Yapı Kredi (26.06.2013; 13-40/521-230)). Exclusive agency clause only concerns intra-brand competition and does not generally lead to anti-competitive effects. However non-compete obligations, including those related to the period following the termination of the agreement, concern inter-brand competition and may lead to anti-competitive effects if they create a foreclosure effect in the relevant market where the products or services in the agreement are being sold; as a result, this provision may fall under Article 4 of Law No. 4054.

Even when the agent does not undertake financial and commercial risks, an agency agreement may still fall under the scope of Article 4 of Law No. 4054 if it facilitates anti-competitive cooperation, particularly if competing parties use the same agency and transfer important information to each other through the agency.

For more information on agency agreements in Turkish antitrust law, please feel free to reach out to ELIG Gurkaynak at +90 212 327 1724 or through gonenc.gurkaynak@elig.com.