The Guidelines on Fines to be Applied in Cases of Agreements, Concerted Practices and Decisions Restricting Competition and Abuse of Dominant Position
The Turkish Competition Authority (Authority) published the Guidelines on Fines to be Applied in Cases of Agreements, Concerted Practices and Decisions Restricting Competition and Abuse of Dominant Position (Guidelines) on 19.02.2025.
The Guidelines cover the implementation of the Regulation on Fines to Apply in Cases of Agreements, Concerted Practices and Decisions Limiting Competition, and Abuse of Dominant Position (Regulation), which was published in the Official Gazette dated 27.12.2024 and numbered 32765.
The Guidelines aim to clarify the procedures and principles introduced by the Regulation. In this regard, the key aspects addressed in the Guidelines are summarized below:
1. Principles for Determining Administrative Fines
- The Competition Board (the Board) determines the base fine rate separately for each violation. Whether an undertaking’s actions lead to one or multiple violations is assessed case-by-case. Separate fines are imposed for actions constituting distinct violations.
- If multiple violations are identified, the base fine rate, and aggravating and mitigating factors, are evaluated separately for each violation. However, the final fine cannot exceed 10% of the undertaking’s annual gross revenue.
2. Determination of the Base Fine Rate
- The base fine rate is determined by applying an increase rate based on the duration of the violation to the initial fine rate.
3. Initial Fine Rate
- The Board determines the initial fine rate within a limit that does not exceed 10% of the undertaking’s annual gross revenue. This rate is set by considering factors such as the severity of the actual or potential harm caused by the violation and whether it constitutes a hardcore violation.
- When determining the severity of the actual or potential harm caused by the violation, the negative impact on consumers, buyers, suppliers, competitors, and the overall economy is considered.
- The nature of the violation is also a key factor, particularly whether it qualifies as a hardcore violation. Violations such as price-fixing among competitors, market or customer allocation, supply restrictions, and bid rigging in tenders are classified as hardcore violations, which may result in stricter penalties.
- Regarding the duration of the violation, a gradual increase in the fine rate applies for violations lasting at least one year:
1-2 years: Increased by 1/5,
2-3 years: Increased by 2/5,
3-4 years: Increased by 3/5,
4-5 years: Increased by 4/5,
5 years or longer: Doubled.
- Violations lasting less than one year are not subject to any increase, and the initial fine rate is directly applied as the base fine rate.
4. Determination of the Final Fine Rate
- Once the base fine rate is determined, aggravating and mitigating factors are assessed to establish the final fine rate. These factors are determined in line with the Board’s case law and effective enforcement policy.
5. Aggravating Factors
- If an undertaking previously found to have violated Article 4 and/or Article 6 of Law No. 4054 on the Protection of Competition (Law) commits another violation, whether of the same or different nature, the base fine rate may be increased up to double. In this regard, it is unnecessary for the undertaking to have violated the same article of the Law; a previous Board decision establishing a violation is sufficient for the recidivism-based increase. However a Board decision that has already been used as a basis for a recidivism increase cannot be used again in future decisions for the same purpose.
- If an undertaking is subject to recidivism and one or more aggravating factors, the increase rates for both elements are combined and applied to the base fine rate. However, a single increase rate is determined if only multiple aggravating factors are present.
6. Mitigating Factors
- If an undertaking can prove mitigating factors, the Board may exercise its discretion to reduce the administrative fine when determining the final fine rate.
- Cooperation during on-site inspections is considered a mitigating factor. However, fulfilling the basic obligations required to facilitate the inspection does not automatically warrant a reduction. For a reduction to apply, the undertaking must provide additional facilitation, such as enabling the inspection to be completed more efficiently by offering technical or physical resources or voluntarily sharing additional relevant information and documents.
- If an undertaking was coerced into participating in a competition violation due to force, intimidation, or threats, this may be considered a mitigating factor by the Board.
- If the undertaking terminated the violation immediately upon recognizing it or played only a passive role in the violation, it may benefit from a reduction in the fine. The violation's limited scope or duration is also considered when determining the base fine rate.
- If the revenue generated from the product or service subject to the violation represents only a small proportion of the undertaking’s total revenue, this may be grounds for a fine reduction.
- If multiple mitigating factors apply to the same undertaking, the Board determines a single reduction rate, which is applied to the base or aggravated fine rate, as applicable.
7. Implementation of the Active Cooperation Regulation and Settlement Regulation
- If an undertaking applies for leniency under the Active Cooperation Regulation or for a settlement under the Settlement Regulation, the relevant reductions are applied to the administrative fine determined by the Regulation. If both applications are submitted, the reduction rates are combined and reflected in the final fine amount.
8. Fines for Executives and Employees
- The Regulation states that the administrative fine imposed on executives or employees who have a decisive role in the competition violation cannot exceed 5% of the fine imposed on the undertaking. Executives or employees are deemed to have a decisive role if they formulate the strategy for carrying out the violation, oversee and direct its implementation, or provide the necessary physical or technical resources to facilitate the violation.
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