Newsletter on Competition Authority’s Communiqué Numbered 2021/2
The Communiqué on the Commitments in Preliminary Inquiry and Investigations concerning Agreements and Concerted Practices between Undertakings and Decisions and Practices of Associations of Undertakings Restricting the Competition (Communiqué No: 2021/2) (“Communiqué“) was published in the Official Gazette dated March 16, 2021 and numbered 31425.
The Communiqué regulates the procedures and principles regarding the binding nature and the submission of the commitments to be provided by the respective undertakings in order to eliminate competition concerns arising from (i) preliminary inquiry or investigation processes carried out by the Competition Authority and (ii) agreements, concerted practices and decisions restraining competition and abuse of dominant position. “Clear and severe” violations of competition defined in detail in the Communiqué will not be considered within the scope of the Communiqué and therefore, such violations will not be able to benefit from the mechanism provided under the Communiqué.
Commitments are divided into two as structural and behavioural ones. In this respect: (i) behavioural commitments mean commitments to regulate the market behaviour of the concerned undertaking without causing a change in the structure of the market; whereas (ii) structural commitments are the ones that cause changes in the structure of the market and impose obligations to the relevant party such as transfer of certain activities, company shares or assets.
- Procedure for Submission of Commitments and Commitment Negotiations
The commitment process within the scope of the Communiqué may be initiated by the request of an undertaking that is a party to the investigation during the preliminary inquiry or investigation (in any case, within 3 months from the announcement of the investigation notification) process notified to the Competition Authority. As a result of its evaluation, the Competition Board may decide to (i) reject the commitment request, (ii) approve the initiation of commitment negotiations, or (iii) postpone its decision if a detailed evaluation is necessary.
The Competition Board may explain the competition concerns in the ongoing investigation to the relevant parties providing the commitments during the negotiations and may also submit the supporting documents. Commitment negotiations may be conducted verbally or in writing. As a result of the commitment negotiations, the parties may decide to submit a commitment. In this case, the commitment text must be submitted to the Competition Authority within the term to be determined by the Competition Authority.
In the text of the commitment, the following information should take place: the competition concern aimed to be eliminated via the commitment, the scope of the commitment, the timing of the same, how long and how the commitment will be applied, the periods to be observed in its implementation, the effect of the commitment to the market, how the commitment will solve the competition concerns and other matters as deemed necessary. In case of a structural commitment, details regarding the execution of the disposal process (of assets/shares) should also be included in the commitment text. In addition, if the implementation of the commitment is dependent on any third parties, the documents showing that an agreement can be made with these persons shall also be submitted to the Competition Authority as supporting documents together with the text of the commitment.
- Evaluation of Commitments
If the commitment is found appropriate by the Competition Board, it will be decided either not to open an investigation or to terminate the ongoing investigation by making the commitment binding on the relevant party. Alternatively, the Competition Board may ask for third parties’ opinion and postpone the said commitment’s evaluation.
In case that the commitment is not found appropriate by the Competition Board, it may restart the commitment negotiations by allowing the parties related to this commitment make changes in their commitment within a certain period of time, for one time only, or it may terminate the commitment process.
- Binding Nature of the Commitments and Surveillance
With the approval of the commitment by the Competition Board, the commitment will become binding upon the Competition Board’s decision on not to open an investigation or to terminate the investigation. In this regard, the Competition Board will ensure the monitoring of the compliance of the parties with their commitment by means such as (i) submitting reports on a regular basis, (ii) appointing third parties for auditing purposes, or (iii) cooperating with relevant public institutions and organizations.The Communiqué will also apply for the investigations pending as at the date of its enforcement. Starting from March 16, 2021, the parties will be able to submit their request to submit a commitment to the Competition Authority, regardless of any time limitation, in relation to the ongoing investigations for which three months term as of the receipt of Competition Board’s decision for the investigation has already expired.