Settlement Mechanism in Turkish Competition Law

Article 43 of Law No. 4054 on the Protection of Competition (Law No. 4054) governs the settlement mechanism and the Regulation on the Settlement Procedure Applicable in Investigations on Agreements, Concerted Practices and Decisions Restricting Competition and Abuses of Dominant Position (Settlement Regulation) sets out the principles and procedure applicable to the settlement mechanism. This procedure seeks to allow rapid resolution of the investigation process. Article 43(5) of Law No. 405 provides that the Turkish Competition Board (Board) can, ex officio or upon the investigated parties’ request, initiate the settlement procedure with the investigated parties that acknowledge the existence and scope of an infringement until the official service of the investigation report.

The Settlement Regulation foresees a list of provisions to allow the investigated undertaking to make a free and informed decision for settling. Accordingly, Article 6(2) of the Settlement Regulation includes an explicit provision highlighting that starting settlement discussions with the Turkish Competition Authority is not an acknowledgement of liability for the alleged violation(s). During the discussion phase, the investigated undertaking is informed on (i) the content of the allegations; (ii) the nature and scope of the alleged violation; (iii) the reduction rate that may be applied to the administrative monetary in case of settlement; and (iv) an estimation of the range of likely fines.

Once the settlement discussions are finalised, the Board issues an interim decision. The interim decision includes, inter alia, the scope and nature of the alleged violation, the maximum amount of the fine and the reduction rate to be applied for settlement and leniency application (if any).  The Board will also set a final deadline of fifteen days for the parties to submit their settlement text. The content of the interim decision cannot be made subject to discussion by the parties. If the parties agree with the interim decision, they shall make a written submission (i.e., the settlement text) addressed to the Board within the deadline set by the Board. The settlement text should include (i) an explicit declaration of admission concerning the existence and scope of the violation; (ii) the maximum rate and amount that the Board may have applied for a monetary fine and the settling undertaking’s acceptance of such a fine; (iii) a recognition that the settling undertaking has been duly informed of the allegations and has been recognised the right to convey its own explanations and defences; and (iv) that the matter subject to settlement and the monetary fine cannot be litigated before the administrative courts. The Board will then issue its final decision establishing the infringement as well as the administrative monetary fine. As a result of the settlement procedure, the Board can reduce the administrative monetary fine amount by 10% to 25% as per Article 43(7) of Law No. 4054 and Article 4(4) of the Settlement Regulation.

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