Distributor Agreements in Turkish Competition Law

Vertical agreements are defined as agreements that are concluded between two or more undertakings operating at different levels of the production or distribution chain, with the aim of the purchase, sale or resale of goods or services.

The concept of vertical restraint is not explicitly defined in Law No. 4054 on the Protection of Competition. Block Exemption Communiqué No. 2002/2 on Vertical Agreements and the Guidelines on Vertical Agreements define a non-exhaustive list of vertical restraints that may raise antitrust concerns, namely: resale price maintenance; region and customer restrictions; selective distribution systems; non-compete obligations; exclusive supply obligation; and single branding conditions. 

Vertical agreements, as they pertain to the internal organization of a business (i.e. in-brand competition), are generally considered pro-competitive. Accordingly vertical agreements may benefit from the block exemption if the supplier’s market share is below 30% and there are no hardcore restrictions. For cases of exclusive supply obligation, both the buyer’s and the supplier’s market share are taken into consideration. The essential factors taken into account in analysing the vertical restraints include market positions of the supplier; buyer and their competitors; entry barriers; market maturity; exclusionary effects; and the nature of the products and services concerned. The supplier’s market position is arguably the most important of these factors. The supplier’s market share will be deemed an indicator of its position in conjunction with the competitive landscape of the market.

For more information on distributor contracts in Turkish antitrust law, please feel free to reach out to ELIG Gurkaynak at +90 212 327 1724 or through gonenc.gurkaynak@elig.com.