Block Exemption Regulations in Turkey

Certain restrictive agreements satisfying the conditions for the block exemption regime are exempted from the prohibition under Article 4 of Law No. 4054 on the Protection of Competition (Law No. 4054). Article 5 of Law No. 4054 empowers the Turkish Competition Board to, inter alia, issue communiqués that set forth the conditions to grant block exemption to certain types of agreements. The most common and widely applicable aspect of the block exemption regime concerns vertical agreements. To that end, Block Exemption Communiqué No. 2002/2 on Vertical Agreements (Communiqué No. 2002/2) regulates the conditions of block exemption for general vertical agreements for the supply of products/services. The block exemption under Communiqué No. 2002/2 would apply on the condition that the supplier’s market share(s) in the relevant market(s) for contract product(s)/service(s) do not exceed 30%. Vertical agreements that feature obligations to supply to a single buyer would benefit from block exemption to the extent the buyer’s market share(s) in the relevant market(s) downstream to contract product(s)/service(s) do not exceed 30%.

Communiqué No. 2002/2 lists certain so-called “hardcore restraints”, which excludes the entire vertical agreement from the application of the block exemption. It also lists certain other vertical restraints, which would not eliminate the benefits of the block exemption altogether, to the extent the specific restraint can be severed from the rest of the agreement. To the extent the vertical agreement benefits from the block exemption, the supplier can impose certain otherwise restrictive obligations such as (i) exclusive dealing, (ii) single branding, (iii) non-compete arrangements for up to five years, (iv) selective distribution, (v) ceiling resale prices.

In addition to Block Exemption Communiqué No. 2002/2 on Vertical Agreements, there are also many sector-specific and agreement-specific block exemptions; namely, Block Exemption Communiqué No. 2008/2 on Technology Transfer Agreements, Block Exemption Communiqué No. 2008/3 in Relation to the Insurance Sector, Block Exemption Communiqué No. 2013/3 on Specialization Agreements, Block Exemption Communiqué No. 2016/5 on Research and Development Agreements, and Block Exemption Communiqué No. 2017/3 on Vertical Agreements in the Motor Vehicles Sector.

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