Effects Doctrine in Turkish Competition Law

Turkey is one of the “effects theory” jurisdictions, where what matters is whether an activity or practice has produced effects on the Turkish markets, regardless of the nationality of the relevant undertakings, where the activity or practice in question took place or whether the relevant undertakings have subsidiaries or presence in Turkey. The purpose of the “effects theory” is to make it clear for the undertakings which provisions set out in Law No. 4054 on the Protection of Competition (Law No. 4054) are applicable. Under the Turkish competition law regime, the use of “effects theory” derives from Article 2 of Law No. 4054, the preamble of which explains that the “effects theory” requires the application of the provisions of Law No. 4054 to the undertakings whose economic activities affect the Turkish markets, regardless of where such undertakings are headquartered. In this respect, an anti-competitive practice could be evaluated under Law No. 4054 provided that the practice in question has any effect within the markets for goods and services in Turkey, irrespective of where the relevant undertakings are headquartered or whether the relevant foreign undertakings have any subsidiaries or branches in Turkey.

In terms of the Turkish merger control regime, the Board’s settled case law explicitly and consistently indicates that a joint venture transaction would be subject to a mandatory merger control filing whenever the jurisdictional turnover thresholds are exceeded, even in cases where the joint venture is not or will not be active in Turkey and will not have any effects in the near future (or perhaps ever) in Turkish markets. If and to the extent the jurisdictional turnover thresholds are exceeded, the approval of the Board will be required before closing the joint venture transaction (see, e.g., Generali/Union-Zaragoza Properties (06.02.2020; 20-08/73-41), Alpla Holding/PTT Global (16.01.2020; 20-04/37-19), HSI/Hilton Sao Paulo Morumbi (16.01.2020; 20-04/33-16), FSI/Snam-OLT Offshore (09.01.2020; 20-03/18-8)). The consistent track record of the Board explicitly demonstrates that there are no exceptions on this front and particularly illustrates the irrelevance of the absence of (i) any current/future Turkey-related activities of the joint venture and/or (ii) any affected markets/overlaps among the parties within the scope of the notifiability analysis. In this respect, the Board is adamant on deeming such transactions notifiable and it does not have any discretion other than following the procedural steps to enforce the legal sanctions, once the violation of the suspension requirement is detected.

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