Market Sharing in Turkey

The relevant legislation for the prohibition of restrictive agreements (including cartels) and for enforcement regime in Turkey is Law No. 4054 on the Protection of Competition (Law No. 4054), and the applicable provision is Article 4. It lays down the basic principles of the cartel regulation and is applicable to both undertakings and associations of undertakings, as well as individuals, corporations and any other forms of entities that act as an undertaking. Anti-competitive restrictions including price-fixing, market or customer allocation, output restriction and bid rigging are the categories of conduct defined as cartels. The agreements which contain such restrictions are highly likely to restrict competition and therefore have consistently been considered to restrict competition by object and prohibited without examining their actual or potential effects on the market. Accordingly, as opposed to the other types of restrictive agreements included within Article 4 of Law No. 4054, cartels, by their nature, do not benefit from a block exemption, nor are they eligible for an individual exemption issued pursuant to paragraph 18 of the Guidelines on the General Principles of Exemption.

Market sharing refers to an agreement regarding the division and allocation of customers and geographic areas between competitors instead of trading freely at their sole discretion. This may take the form of (i) allocating customers by contracts dividing geographic area/territory and (ii) agreeing not to compete for established customers or produce each other’s products or services or expand into a competitor’s market. Market sharing restricts competition, increases the prices in the market and reduces choices available on price and quality for consumers and other businesses. Accordingly, partitioning markets for goods or services and sharing or controlling all kinds of market resources or elements are considered per se illegal pursuant to Article 4 of Law No. 4054.

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