Turkey: Suspension Requirement In Turkish Merger Control: A Recent Decision For Greenfield Joint Ventures

Last Updated: 11 February 2015
Article by Bora İkiler, LL.M.

When legislators establish merger control policies, they can choose to make merger control filing a mandatory or voluntary task. Some jurisdictions, including Turkey, involve a suspension requirement, which requires applicants to suspend implementation of a transaction until they receive clearance from the relevant competition authority. Breaches of such suspension requirements are referred to as "gun jumping" violations and bear significant legal and financial risks for the transaction parties.

For transactions above a certain threshold, the Turkish merger control regime prohibits implementation - (i) without notification to the Turkish Competition Authority (the "Authority") or (ii) before receiving the Authority's clearance. Determining what constitutes the implementation of a transaction is relatively straightforward for transactions involving acquisition of shares, rights, assets, etc. However, this determination is less clear for transactions that involve greenfield joint ventures1.

This article discusses suspension requirement issues related to greenfield joint ventures under the Turkish merger control regime. A recent decision by the Turkish Competition Board (the "Board") suggests that the Board may be changing its established approach to determining "implementation".

Suspension Requirement under the Turkish Merger Control Regime

Turkish law deems mergers or acquisitions illegal if through creating or strengthening a dominant position, the transaction will result in significant lessening of competition in a market for goods or services within the whole or a part of the country (Article 7 of the Law No. 4054 on Protection of Competition - "Law No. 4054").

Identifying which transactions require the Board's clearance is a policy decision which is decided by the Board itself (Article 7 of the Law No. 4054). Accordingly, the Board issued Communiqué No. 2010/4 on Mergers and Acquisitions Requiring the Approval of the Competition Board ("Communiqué No. 2010/4"). Communiqué No. 2010/4 sets forth certain turnover thresholds for the transaction parties. If the transaction parties' turnover exceeds these thresholds, the transaction must obtain the Board's clearance.

For transactions exceeding the thresholds, failure to obtain clearance would result in legal validity issues and administrative monetary fines. Implementing a transaction which exceeds the threshold for mandatory merger control filing, without obtaining the Board's clearance, would trigger an administrative monetary fine of 0.1% of the turnover generated in the financial year preceding the date of the fining decision (Article 11 and Article 16(1)(b) of the Law No. 4054). If this is not calculable, the fine is based on the turnover generated in the financial year nearest to the date of the fining decision. The fine applies to the acquirer in an acquisition transaction or to both merging parties in a merger transaction.

Communiqué No. 2010/4 sheds light on what constitutes implementation of a transaction, stating that "change of control" would constitute "implementation" and the date on which change of control has occurred is considered to be the implementation date (Article 10(7) of Communiqué No. 2010/4).

Pinpointing the change of control (i.e. the implementation) is relatively straightforward for transactions involving acquisition of shares, rights, assets etc. of an existing business. However, for greenfield joint ventures, it is harder to determine whether the suspension requirement is violated by incorporating a new jointly controlled undertaking, which is technically able to operate independently, but chooses to postpone its activities until receiving the Board's clearance or whether a jointly controlled undertaking must be commercially active in order to constitute a breach of the suspension requirement. The Board has developed a consistent response to these questions, but a recent decision has raised eyebrows about whether the Board is signaling a position change.

Below are the Board's precedents, explaining the Board's established interpretation (Tekno Ray and Anayurt decisions), then the different interpretation adopted in the Board's most recent decision (ATG decision).

Tekno Ray Decision

The Tekno Ray decision (dated 23 February 2012, numbered 12-08/224-55) concerns incorporation of a jointly controlled undertaking which planned to operate in the solar energy systems market. Tekno Ray was incorporated on 19 October 2011 and its Articles of Association were published in the Trade Registry Gazette on 26 October 2011 which would mean that it was registered with the trade registry and established its legal personality (together with its decision making bodies) under Turkish laws. Although Tekno Ray was incorporated and thus in a position to operate commercially, its commercial operations were waiting for the Board's decision. Therefore, Tekno Ray did not have any active commercial operation at the time of the Board's review. Tekno Ray's incorporation was notified to the Board on 12 January 2012.

The Board's decision considered the facts and legal landscape above, then applied a provision in Communiqué No. 2010/4 which states that control can be acquired de jure or de facto. Accordingly, the Board concluded that although Tekno Ray's commercial activities were still pending, its incorporation was sufficient to infer the change of control (i.e. implementation). Therefore, the Board imposed an administrative fine for the violation of the suspension requirement.

Anayurt Decision

The approach adopted by the Board in the Anayurt decision is consistent with its earlier approach in the Tekno Ray decision. Both decisions involve the incorporation of a jointly controlled undertaking.

The Anayurt decision (dated 25 June 2014, numbered 14-22/422-186) concerns incorporation of a jointly controlled undertaking, planning to operate in the underground mining, exploration and mine management industry. Anayurt was incorporated on 5 September 2013 and its applications for mining permits and licenses were still pending at the time of the Board's decision. Therefore, Anayurt had no commercial activities when the Board was notified on 9 May 2014.

It appears that the case-handlers concluded a violation of the suspension requirement had occurred and requested Anayurt's counter arguments. One of Anayurt's arguments seems to be that since it does not have any turnover or market share (i.e. no commercial activities), it is not an independent full-function joint venture yet.

The Board indicated that lack of turnover or market share had no bearing on the joint venture's independent full-function nature. The Board went on to say that obtaining the necessary licenses and permits to become fully operational will naturally take some time. Therefore, the Board concluded that incorporating Anayurt without obtaining the Board's clearance was a violation of the suspension requirement and imposed administrative monetary fines.

ATG Decision

The ATG decision (dated 16 July 2014, numbered 14-24/488-218) concerns incorporation of a jointly controlled undertaking, planning to build and operate a high speed train railway station. The transaction was notified to the Board after ATG's incorporation. At the time of the Board's decision, the site for the station construction had not been properly delivered and thus the construction work had not commenced as planned. Therefore, at the time of the Board's decision, ATG did not have any commercial activity.

The Board considered whether a suspension requirement violation existed. It concluded that ATG would become a full-function joint venture only when the construction has been completed, adequate personnel are employed, and there is an office building.

This interpretation suggests that the Board deems ATG to be a full-function joint venture only after it has commenced its commercial activities. In the ATG decision, the Board seems to view ATG's lack of commercial activities as proof that it does not yet have fully-functional status and the absence of such status excuses liability. The Board did not consider ATG's incorporation in and of itself to be a violation of the suspension requirement. Ultimately, the Board concluded that ATG was not a full function joint venture at the time of the decision and did not impose any administrative monetary fines.


The Tekno Ray and Anayurt decisions show an approach which holds that for transactions which are subject to the suspension requirement, the Board would deem incorporation of a jointly controlled undertaking in and of itself to be a violation of the suspension requirement. Particularly in the Anayurt decision, Anayurt was not in a position to operate commercially (due to lacking the necessary permits and licenses) but the Board did not take this into account in its assessment and concluded a violation regardless.

However, the recent ATG decision sends mixed signals for greenfield joint ventures about what the Board will deem to be "implementation", something which in turn triggers the suspension requirement. The Board might be implying a change of position and the incorporation of an undertaking may no longer be sufficient to infer a suspension requirement violation anymore; active commercial activities might become the new norm.

The dissenting opinion in the Board's in the ATG decision takes side with the Board's previous approach. This may in itself be interpreted as a sign that the majority position taken in the ATG decision is a controversial one. The ripples of the ATG decision need to be closely watched to conclude a fundamental position change by the Board.

1 For the purposes of this article, the term "greenfield joint venture" refers to a joint venture which is incorporated to operate in a product market that previously neither of the parents have activities.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions