Turkey was transformed into a new universe following the elections of 1983. In line with the principles of a liberal market economy, Turkey preferred to have a regulatory role. Unlike the situation in the past, the production of goods and services became almost entirely the sphere of private enterprises, except for a few exceptions that were considered subjects of national security or political taboos. Some industries still remain under state supervision.
Needless to say, competition is the main foundation of running a market economy. Even in a smoothly operating free market model, where economics depends on the principle of free competition, there is a risk of monopolization and the emergence of cartels. As a result, the issue of the protection of competition requires new legal and institutional regulations.
The main piece of legislation governing “competition” is the Constitution. Article 167 of the Constitution states that “The state shall take measures to ensure and promote the sound, orderly functioning of the money, credit, capital, goods and services markets, and shall prevent the formation, in practice or by agreement, of monopolies and cartels in the markets.”
Competition is regulated under the Law on the Protection of Competition, Law No. 4054.
Considering that Turkey is a party to several international treaties, such as the Rome Statute, Turkish competition law mirrors European Union competition law. The purpose of the law is to protect competition by prohibiting agreements, decisions and practices against competition and fair trade. The law regulates the conduct of business which may prevent, distort and restrict competition. It also aims to prevent abuse by dominant enterprises. All types of legal transactions and acts regarding agreements fall under the scope of this law. Among them are practices and decisions between undertakings operating in or affecting the markets for goods and services within the borders of the Republic of Turkey which can prevent, distort or restrict competition; the abuse of power by undertakings that hold a dominant position in a market; mergers and acquisitions that significantly decrease competition; and the establishment, regulation and supervision aimed at protecting competition.
Similar to other modern regulations, the prohibitions stipulated by Turkish law regulate business agreements and concerted practices limiting competition, and the abuse of power.
The law is based on a self-regulating exemption mechanism. This system enables enterprises to apply for clearance for each transaction. The law provided a threshold mechanism that gives limits so that companies can see whether they will likely have to apply for clearance or if the volume of the business transaction is already within the limits.
I will give more information about competition law matters in the second part of this article.
NOTE: Berk Çektir is a licensed attorney at law and available to answer questions on the legal aspects of living in Turkey. Please kindly send inquiries to firstname.lastname@example.org. If a sender’s letter is published, names may be disclosed unless otherwise expressly stated by the sender.
DISCLAIMER: The information provided here is intended to give basic legal information. You should get legal assistance from a licensed attorney at law while conducting legal transactions and not just rely on the information in this column.