Turkish Competition Authority’s Regulation dated 05.02.2009 and numbered 27142 (“Former Regulation”) on Administrative Fines to be Imposed in cases of Agreements, Concerted Practices and Decisions Limiting Competition and Abuse of Dominant Position has been repealed and the regulation with the same name dated 27.12.2024 and numbered 32765 (“New Regulation”) has been published in the Official Gazette.
In the New Regulation, the definitions, principles for determining administrative fines, basic fine rate, aggravating factors, mitigating factors and fines to be imposed on managers and employees have been revised.
Under the heading “Definitions”, the definitions of “Active Cooperation”, “Other Infringement” and “Cartel” are not included; instead, the definitions of “Decisive Influence ”, “Undertaking”, “Association of Undertakings” and “Settlement Regulation” are included. Additionally the definition of “Annual Gross Revenue” under this heading has been expanded.
Article 4 titled “Principles on Determination of Administrative Fine” states that the basic fine will be determined separately for each violation by eliminating the expressions “market, chronological and chronological process” used to characterize single and ongoing agreements. Furthermore, under the same title, unlike the Former Regulation, it is clearly regulated that aggravating circumstances will be applied first and then mitigating circumstances will be applied.
Unlike the Former Regulation, the New Regulation does not include the definitions of “cartel and other violations” when determining the basic fine rate under Article 5. Therefore, no distinction is made between cartel and other violations in determining the basic fine, and it is regulated that “the basic fine rate will be determined by increasing the initial fine rate, if the conditions exist, due to the duration of the violation”. In terms of the effect of the duration of the infringement on the increase of the penalty, the article, which reads as “For infringements lasting more than one year and less than five years, it is increased by half, and for infringements lasting more than five years, it is increased by a factor of one”, is handled with sub-divisions. Accordingly, for violations lasting more than one year and less than two years, one-fifth; for violations lasting more than two years and less than three years, two-fifths; for violations lasting more than three years and less than four years, three-fifths; for violations lasting more than four years and less than five years, four-fifths; and for violations lasting more than five years, the basic penalty rate will be increased by a factor of one.
In terms of Article 6 titled Aggravating Factors, the provision that the basic penalty rate will be increased by up to a factor of one in case of repeated violations remains the same; in addition, it is explicitly stipulated that violations of Articles 4 and 6 will be taken as a basis for repetition. However, unlike the Former Regulation, the term “continuing the cartel” has been changed to “continuing the infringement”. In addition, it is stated that the basic penalty rate may be increased by a factor of one if there is a decisive influence in the violation and the confidentiality obligation in the third paragraph of Article 12 of the Reconciliation Regulation is violated. Lastly, under the same heading, it is stated that in the event that the aggravating factors listed in the first and second paragraphs are present together, the increase rate determined within the scope of each paragraph shall be added together and applied to the basic penalty rate.
In Article 7 titled Mitigating Factors, the phrase “assisting the investigation” has been elaborated. Additionally, the conditions of incentives of public institutions, voluntary payment of compensation, and cessation of other violations have been removed from the text; instead, the limited participation in the violation and the presence of foreign sales revenues in the annual gross revenues taken as the basis for the administrative fine are considered as discretionary grounds for reduction, provided that they are proved by the undertakings. The grounds for reduction regarding Active Cooperation are not included.
In article 8 titled “Administrative fines to be imposed on managers and employees” does not differentiate between cartel and other violations. Accordingly, Article 8 reads as follows: “In the event that an administrative fine is imposed on undertakings or associations of undertakings within the scope of this Regulation, the managers or employees of the undertaking or association of undertakings, whose determinative effect on the violation is determined, shall be imposed an administrative fine up to five percent of the fine imposed on the undertaking or association of undertakings.” Again, under this heading, provisions regarding Active Cooperation have been removed.
(Official Gazette of Republic of Turkey – 27.12.2024, 32765)
NAZALI TAX & LEGAL