New Regulation on Active Cooperation for Detecting Cartels Enters Into Force

Introduction

"The Regulation on Active Cooperation for Detecting Cartels" (the "New Regulation") entered into force after being published in the Official Gazette on 16 December 2023 and numbered 32401. The former Regulation on Active Cooperation for Detecting Cartels published in the Official Gazette, dated 15 February 2009 and numbered 21142 (the "Former Regulation"), which had been in force for more than 14 years, was abolished.

The Turkish Competition Authority (the "Authority") convened an online seminar on 26 December 2023 (the "Seminar") to provide practical information on the purpose and consequences of the amendments under the New Regulation, and to respond certain questions that may arise in practice. The amendments are intended to meet the following needs in particular:

• Updating the scope of information and documents that can be requested from the applicant, taking into account the fact that the cartel process can also be managed digitally; and
• Determining the fate of an active cooperation application in cases where the applicants initially apply for active cooperation in the belief that they may have been a party to a cartel and the Turkish Competition Board (the "Board") accepts such application, but following the investigation process, the Board considers the infringement not as a cartel but as another infringement.

Changes Introduced Under the New Regulation

1. Definitions

The definition of "Responsible Unit" has been amended. Under the New Regulation, the Cartel and On-Site Investigation Support Unit will be the responsible units for the active cooperation applications made prior to the Board’s decision to conduct a preliminary investigation. The purpose of designating the Cartel and On-Site Investigation Support Unit as the responsible unit for these applications is to ensure that these applications are examined by people specialised in cartels, in order to make accurate evaluations in respect of the information and documents to be provided during active cooperation applications. However, for active cooperation applications submitted after the Board initiates a preliminary investigation, the responsible unit will be the relevant professional office conducting the investigation. The reason for this distinction is to preserve the integrity of evidence regarding the relevant investigation and to ensure that the relevant applications are examined by the same people conducting the preliminary investigation.

The definition of "Applicant" has been added. Under the New Regulation, undertakings and associations of undertakings may apply for active co-operation, and their managers and employees may also apply for active co-operation independently.

The definition of "Cartel Facilitator" has been added. With the New Regulation, the definition of cartel facilitator, which was recently subject to evaluations in the decisions of the Board and the EU Commission, has been introduced, referring to undertakings and associations of undertakings that facilitate the establishment and/or maintenance of a cartel through their activities, despite not operating at the same level of the production or distribution chain as the cartel parties. Hence, undertakings that have a role in hub-and-spoke cartels, operating at a different production and distribution level than the cartel parties and facilitating the establishment of a cartel, may apply for active cooperation. As mentioned in the Seminar organised by the Authority, in cases of applications submitted by associations of undertakings, it is expected that the association of undertakings will not be considered as a cartel party, but as a cartel facilitator. This is because considering the association of undertakings as a cartel party may create a veiling risk, while focusing on a cartel formed by an association of undertakings may prevent the examination of an existing cartel between undertakings by staying in the background.

The definition of "Value Added Document" has been added. A Value Added Document refers to information and documents that will strengthen the Board's ability to prove the cartel; it is included in compliance with EU regulations. With the introduction of this concept, an Applicant's ability to benefit from discounts and penalty immunities under the New Regulation has been made conditional upon the submission of information and documents that will strengthen the Board's ability to prove the cartel. It is worth noting that the quality of value-added documents may create an advantage for undertakings that apply later in the active cooperation application. For example, if the documents submitted by an undertaking applying in second place under the New Regulation are of a higher quality than the documents submitted by the undertaking applying in first place, it is possible that the undertaking applying in second place may receive more discounts compared to the undertaking that applied first. It is expected that detailed explanations regarding the concept of a Value Added Document will be included shortly in the Guidelines for the Explanation of the Regulation on Active Cooperation for Detecting Cartels.

2. Amendments to Applicable Fines

Article 4 of the New Regulation, titled "Non-imposition of a fine", refers to other cartel parties and cartel facilitators instead of competitors. At this point, it is predicted that cartel facilitators will also be subject to preliminary investigation or investigation.

Pursuant to Article 5 of the New Regulation titled "Reductions in fines", the limitations on the reductions to be applied in fines have been updated, as indicated in the table below:

Article 8 of the New Regulation also clarifies that the fines to be imposed on directors and employees of applicants who are in active cooperation may be reduced, or no fine may be imposed on them. The lower limits for fines are as follows:

3. Modifications on Conditions and Procedure

Under Article 5 of the New Regulation, applicants may benefit from a reduction in fines provided that the application for active cooperation is made within three months following the notification of the investigation, but in any case before the notification of the investigation report. As mentioned in the Seminar organised by the Authority, this period of three months is valid for the initial contact made by the applicant, and if the application is made within this period, it is possible to submit additional information and documents at later stages.

Certain additions have been made to the types of information and documents to be submitted within the scope of active cooperation applications, such as the geographical scope of the cartel, the names and/or trade names and addresses of the parties to the cartel and cartel facilitators, and the means of negotiation used in cartel-related negotiations. The most important change foreseen in terms of the information and documents to be submitted is the requirement that these documents should qualify as Value Added Documents. If the information and documents submitted do not qualify as Value Added Documents, the relevant application will not be accepted by the Authority, documents and information submitted by the parties will be excluded from the scope of the file and will not be used as a basis for the final decision to be taken at the end of the investigation.

With the New Regulation, if deemed necessary, written and/or oral information from the applicant's current and former directors and employees may be requested for applications made within the scope of a reduction or exemption from fines. In order to fulfil this request in terms of former directors and employees, the applicant is obliged to show the utmost effort and diligence. At the Seminar organised by the Authority, it was underlined that if information and documents are requested from the former directors and employees, a broader assessment will be considered, including the reasons for such employees leaving the relevant workplace. At this point, the Authority confirmed that it will ensure that the information provided by the relevant former employees will not negatively affect the applicant undertakings based on the potential conflicts existing due to the employer-employee relationship.

In addition, for applications made within the scope of active cooperation, any additional information and documents are obtained by the applicant after submitting the application must be submitted to the records of the Authority immediately, and in any case before the end of the second written defence period. With this amendment, it is aimed to collect the information and documents that may have an impact on the outcome of the investigation before the additional opinion stage, so that they can be used efficiently and at the right time.

4. Other Regulations

For active cooperation applications where the Board accepted the application and decided not to impose a penalty, or to reduce the penalty of the applicant, the provisions of the New Regulation will still apply, even if it is found at the end of the investigation that the breach subject to the investigation does not constitute a cartel but another breach.

5. Temporary Provisions Applicable to Ongoing Investigations

The three-month period for applicants to benefit from a reduction in fines will not apply to investigations initiated before the New Regulation entered into force. In any case, for active cooperation applications made before the New Regulation entered into force, the provisions of the Former Regulation, which were repealed by Article 11, regarding the conditions and procedure and the provisions regarding the discount rates will continue to be applied in favour of the applicant.