Geographic Allocation of Turnover in Turkish Merger Control Regime

The Turkish merger control regime is governed by Law No. 4054 on the Protection of Competition and the Communiqué No. 2010/4 Concerning the Mergers and Acquisitions Calling for the Authorization of the Competition Board (Communiqué No. 2010/4). One of the crucial aspects of the regime is the calculation and allocation of turnover, employed as turnover-based thresholds, which plays a decisive role in determining whether a merger or acquisition must be notified to the Turkish Competition Authority (Authority).

The geographic allocation of turnover focuses on determining whether the relevant turnover thresholds are met on a domestic (i.e., Turkey) and global scale. These thresholds are outlined to assess whether a merger could have significant competitive effects within Turkey. The Turkish Competition Board (Board) considers the turnover generated from sales of goods and services in Turkey, regardless of where the company is headquartered or incorporated. This domestic turnover allocation is critical in evaluating the potential market power that the merging parties would have in Turkey, which could distort competition and negatively impact consumers.

Communiqué 2010/4, while increasing the jurisdictional thresholds, created a class of exempted sectors within which it confirmed that the geographic origin of turnover generated in these sectors is immaterial as to the notifiability of any activity (mergers and acquisitions) concerning them. This approach was recently underlined in Berkshire/Alleghany (15.09.2022; 22-42/625-261). This sector-specific jurisdictional turnover threshold exception for technology undertakings brings target companies that have de minimis Turkish turnover, limited number of Turkish customers or insufficient assets/entities incorporated in Turkey into the Board’s reach.

For more information on geographic allocation of turnover in Turkish merger control regime, please feel free to reach out to ELIG Gurkaynak at +90 212 327 1724 or through gonenc.gurkaynak@elig.com