Overview of the 2023 Annual Report of the Turkish Competition Authority

The Turkish Competition Authority (the "TCA") published the 2023 Annual Report (the "Report") on its website on 14 August 2024. The Report includes the TCA’s activities for 2023 and related statistical data, changes in legislation and the TCA’s goals and policies[1].

2023 IN NUMBERS

Compared to 2022, the total number of decisions finalised by the Turkish Competition Board (the “Board”) in 2023 increased by approximately 8%. In fact, the TCA issued decisions for 342 cases in 2022 and 370 cases in 2023, of which 217 were related to mergers and acquisitions, 145 to infringement decisions and 8 to individual exemptions and negative clearances.

Infringement Decisions:

- Out of the 145 infringement decisions taken by the Board, 117 came at the end of an investigation process and 28 came after a preliminary investigation. By comparison, out of the Board’s 78 infringement decisions in 2022, 54 decisions came at the end of an investigation process and 24 after a preliminary investigation. In this respect, it can be said that 2023 represents a significant increase compared to 2022.

- Looking at the results of the infringement decisions, we note that allegations were rejected in 25 out of 28 preliminary investigation files, administrative fines were imposed on the undertakings in 12 out of 117 investigation files, 28 files were concluded with commitments and in 68 were concluded with settlement.

- The investigations mostly concerned five sectors: (i) chemicals and mining, (ii) food industry, (iii) machinery industry, (iv) automotive and vehicles, (v) culture, arts and entertainment.

- As a result of the infringement decisions, a total of TRY 2.66 billion in administrative fines were imposed in 2023.

The sectoral distribution of the administrative fines is as follows:

Mergers & Acquisitions:

- The Board decided on a total of 217 applications, including two mergers, 139 acquisitions, 73 joint ventures and three privatisations in 2023. This is an 11% decrease compared to the 245 transactions in 2022.

- Out of the 217 mergers and acquisitions reviewed by the Board, 184 were granted unconditionally and three with conditional permissions. Thirty of the transactions were not permitted as the Board concluded that they were out of its scope or not subject to permission.

- According to the Report, the Board took one transaction into a Phase II review. The review of this transaction is ongoing.

- The highest number of merger and acquisitions decisions relate to the following sectors: (i) information technologies and platform services, (ii) chemistry and mining, (iii) health services, (iv) automotive and vehicles, (v) logistics, warehousing and mail sector. Decisions on related sectors account for 60% of all merger and acquisition decisions.

- Although the duration of the merger and acquisition transactions notified to the TCA varies depending on the scope of the file and the volume of the transaction, the TCA announced that the applications are finalised after an average of 13 days from the last notification date (the last day of information sharing).

- In 94 of the 217 mergers and acquisitions reported, the target companies were established in Turkey, and 35 transactions involved foreign investors investing in Turkish companies.

- With eight transactions, Germany-based investors ranked first place in terms of transactions involving target companies originating from Turkey. According to the Report, for mergers and acquisitions where the target company is based in Turkey, the reported transaction value is approximately TRY 162.6 billion and the total foreign investment envisaged mergers, acquisitions and privatisation transactions involving Turkish companies amount to TRY 68 billion.

Exemptions and Negative Clearances:

- In 2023, the Board issued eight decisions including six exemptions and two negative clearance files. The Board finalized four of these decisions with individual exemption, one with a block exemption and one with a conditional exemption.

- The 2023 exemption and negative clearance decisions related to: (i) automotive and vehicles, (ii) information technologies and platform services, (iii) banking, capital markets, finance and insurance services, (iv) media, advertising and publishing sectors.

CHANGES IN LEGISLATION

Legislation Amendments in 2023

- Communiqué on the Increase of the Lower Limit of the Administrative Fine Stipulated in the First Paragraph of Article 16 of the Law No. 4054 on the Protection of Competition to be Valid until 31/12/2023.

- Regulation on Active Cooperation for Detecting Cartels.

Ongoing Studies

- Draft Directive on the Procedures and Principles Regarding On-site Inspections.

CONSIDERATIONS

- The 2023 Report sets out how the TCA has intensified its sectoral studies aimed at identifying and resolving behavioral and/or structural competition issues related to the sector or the markets.

- In 2023, economic analysis and research activities continued and significant contributions were made to the evaluations of these files through econometric analyses conducted within the scope of various file processes.

- The TCA report also states that, as in previous years, the TCA attaches significant importance to the development of international relations, closely follows national and international developments and will closely follow the practices of other countries.

- Developing evidence-gathering mechanisms to enable the fight against violations is among the priorities of the TCA in the coming period. In this context, the TCA has stated that it will primarily endeavor to implement amendments made to Law No 4054 through its secondary regulations.

- According to Report, one of the objectives of the TCA is to closely follow these markets in order to ensure the development of effective competition law policies and practices for markets that are changing with digitalization and to take measures in line with these developments.

- The TCA is likely to remain very active in the coming years and we will continue to see the repercussions of global competition law developments and trends in Turkey.

[1] The full Report is available here.