The Regulation on Active Cooperation for Detecting Cartels (“Leniency Regulation”), which offers an avenue for cartel members to attain leniency or reduced fines (or even total exemption) in exchange for cooperation with the TCA in unearthing cartels, has been operative for over a decade and four years. While it is widely seen as a beneficial tool for both the TCA and potential infringers of Law No. 4054, the evolving landscape of Turkish competition law, particularly the amendments to Law No. 4054 in 2022, underscores the necessity for a revision of the extant Leniency Regulation. In alignment with this, the TCA promulgated a new Draft Regulation on Active Cooperation for Detecting Cartels (“Draft Regulation”) for public scrutiny on 28 September 2023.
The Draft Regulation introduces several revisions to the Leniency Regulation aimed at elucidating certain ambiguities emanating from practical applications, especially in light of the TCA's vigorous enforcement against cartels.
Foremost, the proposed amendments seek to delineate clearly between the leniency mechanism, which enables the TCA to unearth cartels and amass evidence from cartel members in exchange for reduced fines, and the settlement procedure unveiled in 2022. The latter is an alternate route to case resolution where investigated entities can acknowledge the allegations for a reduction in fines.
Moreover, the Draft Regulation clarifies that entities acting as “hubs” in a hub-and-spoke cartel, termed “cartel facilitators” in the Draft Legislation, who are traditionally liable for administrative sanctions akin to cartel members, will now be entitled to the leniency mechanism under the Leniency Regulation. This amendment appears to be inspired by the Board's Chain Markets Decision1 of 2021, wherein it held five prominent retailers in the Turkish FastMoving Consumer Goods (FMCG) market culpable for horizontal price-fixing. This pivotal decision also implicated their common supplier, Savola (a Turkish edible oils manufacturer), for cartel infringement, citing Savola's role as an informational hub for the anti-competitive exchange between retailers. With the amendments proposed in the Draft Regulation, an entity in a comparable position to Savola, i.e., a cartel facilitator, will now be distinctly eligible for a leniency application.
Additionally, the Draft Regulation stipulates that an applicant can still reap the benefits of leniency and reduced fines if it has tendered a leniency application for a cartel infringement, yet the Board subsequently deems the infringement as non-cartel in nature. This provision is likely to assuage concerns of entities that might have shied away from leniency applications, fearing the infringement may not qualify as a cartel.
The Draft Regulation also enshrines certain temporal constraints for leniency applications and stipulates a deadline for the submission of newly acquired information and documents by the applicant. While the current rules allow for an application until the notification of the investigation report to be eligible for a fine discount, the Draft Regulation proposes a three-month deadline from the notification of the investigation notice—provided it is still before the notification of the investigation report—to qualify for such a discount. Furthermore, it mandates that if the applicant procures additional information and documents concerning the alleged cartel post-application, such must be promptly submitted to the TCA's records before the conclusion of the second written defence period.
Final Reflections
Given the TCA's proactive enforcement stance and the fluid nature of competition law, the amendments to the Leniency Regulation have been a long time coming. The incentivising character of the proposed amendments and the potential positive ramifications suggest that the Draft Regulation is a step in the right direction. With the closure of the window for submitting opinions on the Draft Regulation, the onus is now on us to keenly observe the TCA's forthcoming moves.
Footnote
1. The Board's Chain Markets Decision dated 28 October 2021 and numbered 21-53/747-360.
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