In March 2021, the Turkish Competition Board "(TCB") published communiqué no. 2021/3 on agreements that do not significantly restrict competition ("De Minimis Communiqué"). Although the provisions of the said Communiqué are mostly inspired by the EU Commission's De Minimis Notice, the former partly differs from the latter, particularly with respect to the types of agreements falling within the scope of the de minimis exception and the legal certainty created thereby.
- Introduction
On 16 June 2020, Article 41 of the Act no. 4054 on the protection of competition ("APC") was amended to include the following paragraph: "Based on criteria such as market share and turnover, the Board may decide not to initiate an investigation concerning those agreements, concerted practices and decisions and actions of associations of undertakings which do not significantly restrict competition in the market, with the exception of naked and hardcore violations such as price fixing, region or customer allocation or supply restriction between competitors." In March 2021, the TCB published the De Minimis Communiqué in order to set out the procedures and principles regarding the criteria to be used to identify agreements which do not significantly restrict competition, in accordance with Article 41.2 APC.
- Types of agreements falling outside the de minimis exemption
Unlike the EU Commission's De Minimis Notice which leaves "agreement which restricts competition by their object" out of its scope, Article 41.2 APC excludes "naked and hardcore violations" from the de minimis exception. The term "naked and hardcore violation" is not defined in APC, although various provisions of APC specifically state "price fixing, region or customer allocation or supply restriction between competitors" as examples of naked and hardcore violations.
Article 4.1(a) of the De Minimis Communiqué provides a clear definition for "naked and hardcore restrictions". Accordingly, naked and hardcore restrictions include: (i) price fixing, sharing of customers, suppliers, territories or trade channels, restriction of supply or imposing quotas, bid rigging, sharing of competitively sensitive information such as price, production or sales volumes planned to be implemented in the future between competitors, and (ii) determining a fixed or minimum price to be observed by the buyer in a vertical relationship. As the only vertical restraint covered by such definition is resale price maintenance, other vertical restraints having as their object the restriction of competition, such as passive sale restrictions, will not be regarded as naked and hardcore violations within the meaning of the De Minimis Communiqué. This means that in theory online sales restrictions (normally considered by the TCB not to satisfy the exemption conditions specified in Article 5 APC) may benefit from the de minimis exception, provided that the market shares of the parties do not exceed the de minimis thresholds specified in Article 5 of the De Minimis Communiqué.
- De minimis thresholds
Article 5 of the De Minimis Communiqué sets out certain thresholds based on the market shares of the undertakings concerned for an agreement to qualify as de minimis. Those market share thresholds are parallel to those determined in paragraph 8 of the EU Commission's De Minimis Notice. In this regard, the TCB views that an agreement does not significantly restrict competition:
- for agreements between competitors (horizontal agreements)1, if the total market share of the parties to the agreement does not exceed 10% in any of the relevant markets affected by the agreement;
- for non-horizontal agreements, if the market share of each of the parties to the agreement does not exceed 15% in any of the relevant markets affected by the agreement.
In the event that it is not possible to classify an agreement as horizontal or non-horizontal, it will be treated the same as horizontal agreements (Article 5.2 of the De Minimis Communiqué).
The decisions of an association of undertakings are regraded not to significantly restrict competition, if the total market share of the members of an association of undertakings does not exceed 10% in any of the relevant markets affected by the decision.
Similar to the EU Commission's De Minimis Notice, Article 5.4 of the De Minimis Communiqué provides that if parallel networks created by similar vertical restrictions cover more than 50% of the relevant market, the aforementioned thresholds will be 5% for both horizontal and non-horizontal agreements and for decisions of associations of undertakings.
Article 5.4 of the De Minimis Communiqué stipulates that an agreement or a decision of an association of undertakings will continue to benefit from the de minimis exception, if during the agreement or the decision in question, the market shares of the parties to the agreement or members of the association of undertakings do not exceed the aforementioned thresholds (10%, 15% or 5%, whichever applicable) for two successive calendar years by more than 2% points.
- Safe harbour created by the de minimis exception
Article 6.1 of the De Minimis Communiqué states that the TCB may not open an investigation on agreements viewed not to appreciably restrict competition pursuant to Article 5 thereof. According to Article 6.2, where the TCB has initiated an investigation because the market shares of the parties to the agreement or the members of the association of undertakings could not be accurately determined, then it may end the investigation, if, during the investigation process, it finds that the market shares of the undertakings concerned do not exceed the thresholds set forth in Article 5.
The use of the words "may not" and "may" in Articles 6.1 and 6.2 of the De Minimis Communiqué may be read that the TCB maintains the discretion on whether or not to initiate an investigation on a de minimis agreement. Therefore, there is a risk that an agreement falling under the de minimis exception still may be subject to an investigation that results in the imposing of fines by the TCB on the relevant undertakings. This risk diminishes the legal certainty provided by the De Minimis Communiqué for undertakings.
Finally, it should be noted that the De Minimis Communiqué only aims to establish a safe harbour against investigations that may be carried out by the TCB, and does not provide any protection against private enforcement. Hence, civil courts may find that a de minimis agreement infringes Article 4 APC, and decide on damages or the nullity of the agreement based on such finding.
Footnote
1. In Article 4.1(d) of the De Minimis Communiqué, the term "competitors" is defined as including both actual and potential competitors.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
