Individual Exemption Regime in Turkey

Article 4 of Law No. 4054 on the Protection of Competition (Law No. 4054) prohibits all agreements between undertakings, decisions by associations of undertakings, and concerted practices that have (or may have) as their object or effect the prevention, restriction or distortion of competition; including any form of agreement that has the “potential” to prevent, restrict or distort competition. However, even if an agreement falls within the ambit of Article 4 of Law No. 4054, it is not necessarily illegal. Article 5 of Law No. 4054, which mirrors Article 101(3) TFEU, provides an “individual exemption mechanism” that constitutes a legal exception for the implementation of Article 4 of Law No. 4054. Accordingly, in order for an agreement, decision or concerted practice to be granted an individual exemption, it should meet all of the following four criteria (cumulative conditions):

• They must ensure new developments or improvements or economic or technical improvement in the production or distribution of goods, and in the provision of services (Article 5(1)(a) of Law No. 4054).
• The consumer must benefit from the above-mentioned (Article 5(1)(b) of Law No. 4054).
• They must not eliminate competition in a significant part of the relevant market (Article 5(1)(c) of Law No. 4054).
• They must not restrict competition more than necessary to achieve the goals set out in sub-paragraphs (a) and (b) (Article 5(1)(d) of Law No. 4054).

For certain agreements that meet the above criteria, the Board issued block exemption communiqués so that particular types of agreements will be considered exempt from the prohibition in Article 4 of Law No. 4054, provided they fall under the conditions laid out in these communiqués. Agreements between undertakings that do not meet the requirements set forth in the block exemption communiqués might result in a restriction of competition within the meaning of Article 4 of Law No. 4054, unless the agreement qualifies for an individual exemption under Article 5 of Law No. 4054.  In this regard, one has to evaluate whether the practices based on the agreements within the scope of Article 4 of Law No. 4054 would qualify for an individual exemption.

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