Vertical Agreements in Turkish Competition Law

Vertical agreements are agreements between undertakings operating at different levels of the production/distribution chain (for example supply agreements). The main legislation applicable to vertical agreements and vertical restraints is Article 4 of Law No. 4054 on the Protection of Competition (Law No. 4054). Although the primary objective of Article 4 of Law No. 4054 is to prevent and prohibit cartel agreements and other anti-competitive horizontal concurrences between competitors, it also applies to vertical agreements (i.e., the agreements between undertakings operating at different levels of the production or distribution chain). Law No. 4054 does not provide a detailed definition of vertical restraints; however, Block Exemption Communiqué No. 2002/2 on Vertical Agreements (Communiqué No. 2002/2) and the Guidelines on Vertical Agreements (Guidelines) outline the principles to be adopted in the assessment of vertical agreements.

Vertical restraints may have negative effects especially in terms of decreasing intra-brand and inter-brand competition and they may lead to foreclosure and restriction of consumer choice. However, there may also be positive effects that justify the implementation of vertical restraints—namely, they may serve as a solution for free-riding and hold-up problems, facilitate entry into new markets, and address problems on matters such as uniformity and access to quality.

Communiqué No. 2002/2 and the Guidelines set forth the principles to be adopted during the examination of vertical agreements. Pursuant to Communiqué No. 2002/2, vertical agreements of undertakings with market shares that exceed 30% cannot benefit from the block exemption.

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