Before the entry into force of the Law No. 7246 (the "Amendment Law"), the substantive test used by the Turkish Competition Authority ("Authority") for its merger review had been a typical dominance test, originating from Article 7 of Law No. 4054 (before being amended) and Article 13 of Communiqué No. 2010/4.

Based on these articles, mergers and acquisitions which did not create or strengthen a dominant position and did not significantly lessen competition in a relevant product market within the whole or part of Turkey were be approved by the Turkish Competition Board ("Board"). Simply put, before the Amendment Law introduced the significant impediment of effective competition test ("SIEC Test"), a contemplated transaction could approved by the Board with very few exceptions, unless it led to a new dominant position or reinforced an existing dominant position.

Through the Amendment Law, the previously used "dominance test" has been replaced with the SIEC test in Turkey. In line with EU competition law, the recent addition to the article replaces the current dominance test with the SIEC test. With this new test, the Authority is now able to prohibit not only transactions that may create a dominant position or strengthen an existing dominant position, but also those that could significantly impede competition.

The Guidelines on Evaluation of Abusive Exclusionary Conducts by Dominant Undertakings ("Exclusionary Conduct Guidelines") sets a non-exhaustive list for the items the Board would review at its dominant position examination. These are (i) the merged company's market shares, (ii) market structure, (iii) barriers to entry, (iv) competitors' market position and (v) buyer power.

The Guidelines on Horizontal Mergers ("Horizontal Merger Guidelines") provide guidance on the market share and concentration levels which would be deemed risky. Per the Horizontal Merger Guidelines,

  • Aggregated market shares above 50% may be an indicator of dominance.
  • Aggregated market shares below 20% are most likely to not warrant an in-depth analysis.
  • In case of an HHI index below 1000 post-transaction, likelihood of competition law concerns is very low.
  • If the resulting HHI index is between 1000 and 2000 where delta is below 250, or, HHI index is above 2000 but delta is below 150, likelihood of competition law concerns is very low.

On a separate note, despite the High State Court's approach that Article 7 refers only to single dominance, not to collective dominance, Horizontal Merger Guidelines include collective dominance within the scope of Article 7. Therefore, it seems fair to say that the Board is expected to find that a transaction which creates or strengthens a collective dominance in the relevant market would meet the first prong.