Concentrations Involving State-Owned Undertakings in Turkey

The term “undertaking” in competition law refers to a unique concept that is independent of the other law disciplines. Similar to the enforcement practices in other jurisdictions, Turkish competition law is concerned predominantly with the practices of “undertakings”. Article 3 of Law No. 4054 on the Protection of Competition (Law No. 4054) defines the term as those natural and legal persons forming a unit that can decide independently and constituting an economic whole, producing, marketing and selling goods and services in the market. Therefore, the concept of “undertaking” is mainly composed of two main elements: (i) economic activity and (ii) economic independence.

Publicly owned entities can also be qualified as undertakings and are subject to competition law rules under Turkish competition law. The preamble of Article 2 of Law No. 4054 explicitly states that competition rules must be applied to all undertakings which have economic operations. It is not important whether the undertakings belong to public institutions or to private persons. Even though the goals of protecting the public interest and public order come to the forefront in competition law, the fulfilment of the duties of the undertakings charged with serving the general economic interests should not conflict with the competition rules. Therefore, it is clear that state-owned entities might be subject to competition law reviews and investigations, as well. In other words, the Board principally approaches the issue of state-owned entities by disregarding the specific legal nature of the entity conducting the activity: whether they are natural or legal, public or private, all actors engaged in economic activity are undertakings (TCDD (03.03.2005; 05-12/145-52)).

For more information on acquisitions involving state enterprises in Turkey, please feel free to reach out to ELIG Gurkaynak at +90 212 327 1724 or through gonenc.gurkaynak@elig.com.