Sanctions in Turkish Competition Law

Under the Turkish legal regime, competition law violations are classified as misdemeanours. As the general law applied to misdemeanours, Law No. 5326 on Misdemeanours defines misdemeanour as a tort for which the law requires imposition of administrative sanctions. Therefore, sanctions that the Turkish Competition Board (Board) may impose in accordance with Law No. 4054 on the Protection of Competition (Law No. 4054) are of administrative nature and subject to the judicial review of administrative courts. In this regard, breach of Law No. 4054 leads to administrative fines (and civil liability) but does not lead to criminal sanctions. On the other hand, there have been cases where the matter also involved a breach of criminal law and thus had to be referred to a public prosecutor after the competition law investigation was completed: For example, bid-rigging activities may be criminally prosecuted in accordance with Section 235 et seq. of the Turkish Criminal Code.

The principles and the framework surrounding administrative monetary fines to be imposed by the Board are set forth under Law No. 4054, as well as the Regulation on Fines to Apply in Cases of Agreements, Concerted Practices and Decisions Limiting Competition, and Abuse of Dominant Position (Regulation on Fines). Law No. 4054 sets an upper limit to the administrative monetary fines that may be imposed by the Board, at 10% of annual gross revenues of undertakings, associations of undertakings or members of such associations. The Board may also impose administrative fines on their employees or managers who have a decisive influence over the infringement of competition law, amounting to up to 5% of the fine imposed on the undertaking or association of undertakings itself.

The principles of determining the administrative monetary fines are set out under Article 4 of the Regulation on Fines, which provides a two-step process. Accordingly, the Board shall (i) first determine the base fine, (ii) then take into account aggravating and mitigating factors. The Regulation on Fines sets forth the base fines for different types of conduct. Accordingly, the base fine is calculated at a rate between (i) 2% and 4% for cartels, and (ii) 0.5% and 3% for other violations. In determining the level of the monetary fine, Article 16 of Law No. 4054 refers to Article 17 of Law No. 5326, directing the Board to consider factors such as recidivism, duration of the infringement, market power of relevant undertakings, the level of role in the realisation of infringement, compliance with commitments and the severity of the damage occurred or possible damages, etc.

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