New Guidelines on Administrative Fines for Competition Violations in Türkiye

Introduction

On 27 December 2024, the Turkish Competition Authority (“TCA”) had introduced a new Regulation on Administrative Fines for Competition Violations (“New Fining Regulation”), replacing the previous regulation from 2009. This regulation establishes the procedures and principles for imposing fines on undertakings and their associations for anti- competitive practices.

Following this, on 19 February 2025, the TCA released guidelines to further clarify the application of these fines. This client alert provides an extensive summary of these guidelines to help international businesses operating in Türkiye understand the implications.

Key Changes from the Previous Regulation

The previous regulation, in effect since 2009, primarily focused on categorising violations into “cartel” and “other violations” types, with specific base fine ranges for each category which limited the discretion of the Board on lower and higher end of the base fine. The new guidelines move away from this strict taxonomy and instead focus on the nature and gravity of the violation, handing the rudder completely to the Board.

In addition, the previous regulation also limited the TCA’s discretion to reduce the fine by up to 3/5 in mitigating circumstances, whereas the New Fining Regulation leaves the amount of reduction entirely to the TCA’s discretion.

The new guidelines aim to enhance transparency and predictability in the imposition of fines, ensuring that businesses can better anticipate the financial consequences of their actions.

Key Highlights of the New Guidelines

The guidelines are based on the New Fining Regulation, which is based on the Law No 4054 On the Protection of Competition (“Law No. 4054”). Fines are calculated based on the annual gross revenues of the offending undertaking or association, with a cap of 10% of the previous fiscal year’s revenues. According to the New Fining Regulation and the new guidelines the fines that are finally applied in a case are calculated with a series of factor explained below:

1. Determining the Base Fine Rate

The base fine rate is the initial step in calculating fines and is determined by the severity and nature of the violation. The TCA will set the base fine rate taking into account the following aspects of the violation:

» Severity of Harm: The potential or actual harm caused by the violation to competition, consumers, and the economy. This includes factors such as the extent of the damage to market competition and the economic impact on consumers and other market participants.

» Nature of Violation: Whether the violation is naked and hardcore, such as price-fixing, market allocation, or bid-rigging, will affect the calculation of base fine. Violations that are blatant and have a significant negative impact on market competition are subject to higher fines.

2. Adjustments Based on Duration

Once the base fine rate it is adjusted based on the duration of the violation. Longer violations result in higher fines:

»  1-2 years: Increased by 20%

»  2-3 years: Increased by 40%

»  3-4 years: Increased by 60%

»  4-5 years: Increased by 80%

»  Over 5 years: Doubled

3. Aggravating Factors

The fine can be increased due to aggravating factors, which reflect the undertaking’s conduct and the context of the violation:

» Repeat Offences: If the undertaking has previously violated competition laws, the fine can be increased up to one-fold.) It should be noted that an undertaking can only be penalized once, for the same cause of action. In this line, with regards to repeat offences, the infringement does not have to be related to the same type of offence or based on the same article of the law.

» Continued Violation: If the violation continues after the investigation has started, the fine can be increased up to one-fold.

» Leadership Role: If the undertaking played a leading role in the violation, such as organising or enforcing the anti-competitive behaviour, the fine can be increased up to one-fold.

» Confidentiality Breach in Settlement Negotiations: Settlement notice requires undertakings to keep the contents and information obtained confidential until a final decision is issued for all investigated parties. Such a breach will also mean the fine can be increased up to one-fold.

The aggravating factors have an upper limit and other than recidivism the Board has the discretion to apply the relevant aggravating factors or not depending on the specifics of the case.

4. Mitigating Factors

Mitigating factors play a crucial role in determining the final fine rate imposed on undertakings and their associations for competition violations. These factors can significantly reduce the severity of the fines, reflecting the specific circumstances and behaviours of the offending parties. The guidelines identify several mitigating factors that can lead to a reduction in the fine rate:

» Cooperation with the Investigation: Undertakings that provide significant assistance during the investigation, such as offering additional information or facilitating the investigation process, can benefit from a reduced fine. This cooperation must go beyond mere compliance with legal obligations.

» Limited Involvement in the Violation: If an undertaking had a minor role in the violation, such as being coerced into participation or having limited engagement in the anti-competitive behaviour, the fine can be reduced. This includes scenarios where the undertaking’s involvement was minimal or passive.

» Economic Impact of the Violation: If the violation’s impact on the undertaking’s revenue is minimal, indicating that the anti-competitive behaviour did not significantly benefit the undertaking, the fine can be reduced. This factor considers the proportion of the undertaking’s revenue derived from the violation.

» Export Activities: If a significant portion of the undertaking’s revenue comes from exports, reflecting a lower impact on the domestic market, the fine can be reduced. This acknowledges the undertaking’s contribution to international trade and its lesser impact on the local market.

5. Fines for Individuals

The guidelines also stipulate fines for individuals (managers or employees) who have a decisive influence on the violation. These fines can be up to 5% of the fine imposed on the undertaking. This ensures that individuals who play a key role in anti-competitive practices are held accountable. However, this is only scarcely implemented in practice and there only a handful of decisions where individuals are fined.

Conclusion

Guidelines do not change much beyond providing some helpful explanations to the New Fining Regulation. Whether the New Fining Regulation will change the some of the established practice or bring something new to the table (beyond the blatant rule changes) will be observed in the coming days.

Still, the new guidelines provide a comprehensive framework for calculating administrative fines for competition violations in Türkiye. It also emphasise the importance of compliance and cooperation with the TCA. International businesses operating in Türkiye should review the guideline and New Fining Regulation carefully to ensure adherence to competition laws and avoid significant financial penalties.