Output Restriction Cartels in Turkey

The relevant legislation for the prohibition of 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 of Law No. 4054. 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.

Controlling the amount of supply for goods or services directly affects pricing, considering the fact that in normal circumstances, prices are determined in accordance with supply and demand. Normally, when supply increases, prices decrease and vice versa, thus fixing or controlling the supply or demand for goods or services is a violation of competition law.

Article 4 of Law No. 4054 provides a non-exhaustive list of conducts that are deemed as agreements, concerted practices and/or decisions restricting competition. Within this list the paragraph (c) of the Article 4 of Law No. 4054, strictly prohibits output restrictions, and stipulates that the agreements pertaining to controlling the amount of supply or demand for goods or services or determining them outside the market are illegal. Accordingly, anti-competitive restrictions including output restriction are listed among the categories of conduct defined as cartels. The agreements which contain such restriction 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.

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