I. Introduction
Act no. 4054 on the Protection of Competition (“Act”) stipulates the purpose of the competition legislation, which is “to prevent agreements, decisions and practices preventing, distorting or restricting competition in markets for goods and services, and the abuse of dominance by the undertakings dominant in the market, and to ensure the protection of competition by performing the necessary regulations and supervisions to this end.” Undertakings operating within the borders of Türkiye are the market players that are subject to the provisions of the Act.
The Act explicitly prohibits undertakings’ anti-competitive, distortive or restrictive actions and practices. These regulations are crucial for competition legislation aimed at ensuring consumer welfare and free market. Pursuant to such regulations, the Competition Authority conducts preliminary inquiries and/or investigations to observe the actions and activities of undertakings during its controls.
II. Commitments for Compliance with Competition Legislation
With the amendment made by Law no. 7246 on 24.06.2020, the practice of commitment was put into practice to eliminate competition issues. The commitment procedures and principles are regulated in “Communiqué on the Commitments to be Submitted in Preliminary Inquiries and Investigations Regarding the Abuse of Dominant Position, Anti-Competitive Agreements, and Concerted Practices and Decisions no. 2021/2” issued by the Competition Board.
Undertakings and associations of undertakings subject to a preliminary inquiry or an investigation by the Competition Authority may voluntarily make commitments to eliminate their competition issues under investigation. However, undertakings in clear and severe violation of competition may not submit any commitments.
After reviewing voluntary commitment submissions, the Competition Board may decide not to investigate and/or end the ongoing inquiry if it determines that the relevant issue will be resolved. Thus, the consequences of suspected antitrust violations are removed in a shorter period, saving time and resources for prospective inquiries. As a result, the practice of commitment and its implications are crucial for all the relevant parties.
III. Examples of Past Commitments
Below, there is an overview of certain decisions reached by the Competition Board regarding the finalization of commitment procedures in preliminary inquiries and/or investigations on undertakings. An examination of the Competition Board’s decisions reveals that the practice of commitment has gained popularity lately.
- Decision on the Case of Coca Cola Satış ve Dağıtım A.Ş. (Ccsd), 2021 (28.7.2022)
During its investigation on Coca Cola Satış ve Dağıtım A.Ş. (CCSD), the Competition Board concluded that the commitments submitted by CCSD on 02.09.2021 could resolve its competition issues; therefore, the investigation was closed with the Board decision no. 21-41/610-297 of 02.09.2021.
- Investigation on Tadım Gıda Maddeleri San. ve Tic. A.Ş., closed with the company’s submission of commitments (8.7.2022)
With its decision no. 21-38/549-M of 12.08.2021, the Competition Board initiated an investigation on Tadım Gıda Maddeleri San. ve Tic. AŞ on the grounds that the company abused its dominant position in the packaged dried nuts & fruits market by engaging in anticompetitive practices, complicated the activities of its competitors and violated Act no. 4054 on the Protection of Competition by interfering with the prices of dealers and setting the resale prices. As a result, Tadım Gıda Maddeleri San. ve Tic. A.Ş. offered commitments, and the Competition Board concluded that the commitments were fitting for the competition issues, could solve associated problems and could be successfully and quickly executed. Therefore, it decided to close the investigation by making the commitments binding.
IV. Conclusion
The practice of commitment came into force with an amendment made in the Act, and it is now actively used by the Competition Authority and undertakings. In short, the practice of commitment is an effective way to (i) eliminate any damages to be caused by possible antitrust violations by saving time and resources and to (ii) avoid severe penalties for undertakings. Moreover, the introduction of this practice into the legislation mitigates the punitive aspect of the Competition Authority in face of antitrust violations by encouraging it to cooperate with undertakings. Hence, the Authority may now take immediate action to avoid antitrust violations and reduce or eliminate prospective damages.
