Leniency Regulation Information Note

Comprehensive Amendments to the Turkish Competition Authority's Leniency Regulation in Light of Almost 15 Years of Enforcement

Through the The Regulation on Active Cooperation for Detecting Cartels ("New Leniency Regulation" or "Regulation"), which entered into force effective upon its publication in the Official Gazette dated December 16, 2023^[1], the regulation that had been in force since February 15, 2009^[2] ("Former Leniency Regulation") has been amended and updated in accordance with the practical experience gained by the Authority in the span of nearly 15 years, as well as certain legal gaps encountered thereon and the leniency regulations of other competition authorities.

As a reminder, on September 28, 2023, the Competition Authority published the draft version of the Regulation ("Draft Regulation") for public consultation pursuant to the Competition Board's decision of the same date and numbered 23-46/884 and announced that the relevant stakeholders may submit their opinions, recommendations and evaluations to the Authority until October 9, 2023.^[3] Before going over the amendments made with the New Leniency Regulation, we would like to point out that the Draft Regulation and the New Leniency Regulation are mostly in-line.^[4]

With this background, we set out hereunder the major changes introduced by the New Leniency Regulation.

Major Changes Introduced By The New Leniency Regulation

• Definition of “Cartel Facilitator”

In recent years, hub-and-spoke type anti-competitive agreements have been one of the key matters examined by the Authority.^[5] Notably in the Retail I (28.10.2021, 21-53/747-360) and Retail II (15.12.2022, 22-55/863-357) decisions information exchanges and pricing behaviors of chain markets and suppliers thereof were examined in great detail. With the inclusion of the definition of "cartel facilitator" within the scope of the new Leniency Regulation, the legal uncertainty in the applicability of active cooperation to undertakings and associations of undertakings which mediate for organizing and/or maintaining a cartel, facilitate the organization and/or maintaining a cartel with their activities, without carrying out activities at the same level of production or distribution chain as the parties to the cartel, has been resolved.

• “Document With Added Value” Criteria

In line with the practices of other competition authorities, and in particular the EU Commission, a minimum threshold has been introduced as to the merits of the documents provided by the applicant to draw a line between the active cooperation procedure, which may be considered as a method of obtaining evidence for cartels, and the settlement mechanism, which is an alternative procedure for concluding a case.

Accordingly, the applicants are required to submit "information and documents which will reinforce the Board’s ability to prove the cartel, taking into account the evidence held by the Board", in other words, "document with added value".

In addition, the Regulation also states that the information and documents submitted by parties whose active cooperation application is not accepted due to failure to provide documents with added value shall be removed from the scope of the case file and not be used for the basis of the final decision at the end of the investigation, thereby securing the rights of the applicants against the risks they may face due to the documents they have provided.

• Revisions on Rates of Reduction Of Fines

One of the most substantial revisions made with the New Leniency Regulation is regarding the rates of reduction of fines to be granted to undertakings that have engaged in active cooperation.

As per the New Leniency Regulation, while the existing marker system of the Former Leniency Regulation is preserved, the importance of the ranking of applications has been reduced and the discretion of the Board in terms of determining the rates of reduction of fines has been broadened.

	Minimum and Maximum Rates of Reduction Of Fines
Application No	Former Leniency Regulation	New Leniency Regulation
First Application	33-50%	25-50%
Second Application	25-33%	20-40%
Subsequent Applications	17-25%	15-30%

• Definition of “Assigned Unit”

Within the framework of the amended definition under the New Leniency Regulation, the assigned unit is split into (i) "Cartels and On-Site Inspections Support Unit in case of active cooperation applications made before the Board takes a decision to initiate a preliminary inquiry" and (ii) "the professional department in case of active cooperation applications made after the preliminary inquiry has been initiated".

It is understood that the designation of the case handlers -who possess the deepest understanding of the merits of the case file- as the assigned unit subsequent to the preliminary investigation phase is intended to achieve the most accurate assessment of the "added value" of the active cooperation applications and the documents submitted therein, and to align the practice with the Leniency Regulation.

• Foreseen Time Limit for Applications

The New Leniency Regulation allows active cooperation applications to be filed within three months following the communication of the investigation notification and in any event before the notification of the investigation report. It is worth noting that the duration of the time limit in question was stipulated as "after the decision of the Board to initiate a preliminary inquiry and before the notification of the investigation report" under the Former Leniency Regulation, without the additional requirement of being within three months following the communication of the investigation notification It is considered that this regulation aims to ensure that leniency applications are made at the early stages of the investigation process and that the procedural economy aimed by the leniency application is fully achieved.

Forward-Looking Assessments

It is expected that a new guideline will be published by the Authority in the near future, which would (i) provide further details on novel terminologies such as "cartel facilitator" and "document with added value", and (ii) specify the considerations to be taken into account in determining the rate of reduction of fines to be granted to undertakings.

10.1.2024