December 2021 - In November 2021, the Turkish Competition Board (the "Board") approved 26 merger control filings and published 56 reasoned decisions. In addition, the Board accepted a commitment package at the preliminary investigation stage for the first time. We provide detailed information on this and other developments below.
The block exemption threshold is lowered to 30%
The morning of 5 November marked a very important change in Turkish competition law. Undertakings that hold a market share between 30% and 40% in the relevant market are now excluded from the block exemption provided by Communiqué No. 2002/2. An amendment that entered into force on 5 November 2021 reduces the market share threshold from 40% to 30%, which means that for a vertical agreement to benefit from the block exemption, the market share must not exceed 30%.
The amendment sets out a six-month transition period for undertakings that hold a market share between 30% and 40% in the relevant market to amend their vertical agreements in a way that is compliant with the new legal threshold. For detailed information, please see our article here (in Turkish).
The Board's first commitment decision at the preliminary investigation phase
For the first time the Board accepted a commitment package submitted during a preliminary investigation. Turkish glassmaker Sise Cam submitted a commitment package to the Board during a preliminary investigation. The Board accepted the commitment package and decided to terminate the preliminary investigation by making the relevant commitment package binding, as the commitments submitted were sufficient to resolve the competition issues. This decision marks the first time that the Board has accepted a commitment package at the preliminary investigation stage, and will surely lead to other similar decisions in the near future. We may see several other Board decisions announced without the need of initiating a full-fledged investigation.
Only the right of defence can benefit from the principle of confidentiality of independent attorney-client relationship
During a dawn raid which took place at Trendyol, one of the largest online marketplaces in Turkey, Trendyol claimed that documents and findings obtained by the Board are related to communication between independent lawyers and the company as the client, and thus requested that the documents be returned. The Board reviewed the documents and findings and concluded that independent lawyers can benefit from the principle of confidentiality under the attorney-client relationship as long as the matter relates to the right of defence.
In its decision, the Board states that the purpose of this protection is to ensure that the right of defence can be properly exercised. According to this principle, correspondence between an independent lawyer and a client, who do not have a worker-employer relationship, benefits from protection in order to exercise the client's right to defence. In contrast, correspondence that is not related to the exercise of the right of defence, that is not directly related to any violation, or that conceals an on-going or future violation, does not benefit from protection.
As a result, the Board rejected the request regarding the return of the documents based on the grounds that the documents in question did not constitute correspondence with the independent lawyer for the purpose of exercising the right of defence.
The Board reunites with its old friends: Mey Diaego and EssilorLuxottica
The Board launched an investigation against Mey Içki ("Diaego") based on the grounds that the documents and findings obtained at the preliminary investigation were found sufficient to initiate a full-fledged investigation to determine whether Diaego had violated its dominant position (Article 6 of Law No. 4054). This decision marks the second time in 2021 that Diaego has faced a full-fledged investigation The Board decided not to impose a new monetary fine on Diaego in its previous investigation this year. Considering the history of the relationship between Diaego and the Board, Diaego may be the most exposed undertaking to competition law investigations in Turkey.
Another "old friend" that the Board visited in the last quarter of this year is EssilorLuxottica. The Board decided to initiate a full-fledged investigation against the optical company to determine whether it had acted in a way that makes the activities of its competitors in the Turkish optical market difficult and exclusionary.
In 2017, before merger of Essilor and Luxottica, the Board imposed an administrative fine against Luxottica based on the grounds that the company abused its dominant position in the optical market.
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