March 2025 – In late 2024, the Turkish Competition Authority (“TCA”) published its Regulation on Fines to Apply in Cases of Agreements, Concerted Practices, and Decisions Limiting Competition and Abuses of Dominance (“New Regulation”), which came into force on 27 December 2024, upon its publication in the Official Gazette, replacing the previous regulation. A summary of the changes introduced by the New Regulation is available here.
To provide clarity on the application of the New Regulation, on 19 February 2025 the TCA published its Guidelines on the Regulation on Fines to Apply in Cases of Agreements, Concerted Practices, and Decisions Limiting Competition and Abuses of Dominance (“Guidelines”). The Guidelines explain the rationale behind the changes introduced by the New Regulation and how these changes will be applied to fines, using examples.
Background
The TCA explained that evolving markets, business models, and consumer preferences have led to changes in the types of infringements and the parties involved. The rise of large technology companies, the increasing prevalence of cross-border activities, and the negative impacts of algorithmic and data-driven infringements have led to competition violations affecting wider economic areas. These developments necessitated a review of the fining policy that had been in effect for almost fifteen years.
Key changes
The New Regulation introduces several key changes to the calculation of administrative fines:
- Abandonment of the “cartel” and “other infringements” classification: The New Regulation moves away from determining the base fine rate solely based on classifying the infringement as “cartel” or “other infringements”. Instead, it adopts a new method considering the nature of the infringement (whether it constitutes a clear and serious violation) and its negative impact on competition.
- Removal of lower and upper limits for the base fine rate: The New Regulation removes the previously established lower and upper limits for the base fine rate tied to the “cartel” and “other infringements” classifications.
- Shorter time intervals for calculating the duration-based increase: The New Regulation shortens the time intervals considered for the calculation of the duration-based increase.
- Codification of aggravating and mitigating factors: The New Regulation codifies aggravating and mitigating factors based on the TCA’s case law. It also removes the lower limit for increase rates linked to aggravating factors and the lower and upper limits for reduction rates linked to mitigating factors.
Calculation of administrative fines
The New Regulation outlines a three-step process for calculating administrative fines:
1. Determination of the base fine rate: The TCA determines the base fine rate for each infringement separately. This rate is determined by considering the nature of the infringement and its potential or actual negative impact on competition.
2. Adjustment for aggravating and mitigating factors: The base fine rate is adjusted upwards for aggravating factors and downwards for mitigating factors.
3. Calculation of the final fine amount: The final fine amount is calculated by applying the adjusted fine rate to the infringer’s annual gross revenue in the financial year preceding the fining decision.
It should be noted that the question of when conduct may lead to separate infringements and when not was one of the points that practitioners had hoped to gain more clarity on after the promulgation of the New Regulation, as the text of the New Regulation omitted the reference to “more than one independent behaviour in terms of market, nature, and chronological process”, which was the standard for separate violations under the previous regulation. The Guidelines have now clarified that the TCA will take into account a number of factors such as the product and geographic markets involved, the nature of the relevant conduct, whether the conduct is part of the same strategy and/or comes about as a part of the implementation of the same decision, and the continuity between the relevant infringements in terms of time, also citing to the TCA’s previous case law. Based on the above, the standard applied by the TCA remains similar, though a wider range of factors will be considered.
Key considerations for base fine rate determination
The New Regulation stipulates that the TCA will establish the base fine rate before determining the final fine rate. The Guidelines provide detailed guidance on the factors the TCA will consider when determining the base fine rate, including:
- The gravity of the actual or potential harm caused by the infringement: The TCA will consider the infringement’s negative impact on competition, consumers, trading partners, and the overall economy. According to the Guidelines, the severity of damage depends on factors like the violation’s intensity, market position of the infringing undertakings, the importance of the affected products within the economy, and the relevant geographic scope. Violations with greater anti-competitive effects carried out by undertakings with market power or covering larger areas will cause more damage than those with less impact or affecting smaller markets. When assessing the severity of a violation, factors such as the market share of the undertakings, brand recognition, ownership of trademarks and patents, possession of a product or service that could lead to disruptive innovation, control over essential inputs for competitors, vertical integration, and the ability to block market entry or growth will be considered. Additionally, the nature of the market in which the violation occurs will also be considered when determining its severity.
- The nature of the infringement: The TCA will consider whether the infringement is clear and/or serious. By “clear” violations, the TCA mainly refers to object violations such as cartel conduct, whereas the “seriousness” of violations depends on the degree of market power possessed by the infringing parties and the impact on consumer welfare.
- The duration of the infringement: The TCA will consider the duration of the infringement, with longer infringements receiving higher fines, based on the formula set out in the New Regulation, according to which the base fine rate will be increased:
- by one-fifth where the infringement has lasted for more than one year but less than two years;
- by two-fifths where the infringement has lasted for more than two years but less than three years;
- by three-fifths where the infringement has lasted for more than three years but less than four years;
- by four-fifths where the infringement has lasted for more than four years but less than five years;
- by onefold where the infringement has lasted for more than five years.
Aggravating and mitigating factors
Once the base fine rate is determined, aggravating and mitigating circumstances will be factored in. The New Regulation provides a non-exhaustive list of aggravating and mitigating factors that the TCA may consider when adjusting the base fine rate. These include:
- Aggravating factors: Recidivism, the infringer’s decisive influence in the infringement, continuing the infringement after receiving the investigation notice, and breach of confidentiality obligations under the Settlement Regulation.
- Among the relevant factors, recidivism is the only non-discretionary one, whereas the TCA maintains the discretion as to whether or not to apply the other potential aggravating factors in a given case. In the event of recidivism, the initial basic fine rate is increased by onefold. For the discretionary aggravating factors (i.e., decisive influence in the violation and breach of confidentiality obligations), the TCA may increase the base fine rate up to onefold, but may also set the increase rate at a lower level. If multiple aggravating factors are present, the individual increase rates are added together and applied to the base fine rate.
- Regarding “decisive influence”, the Guidelines explain that the TCA may increase fines for undertakings playing a major role in anti-competitive behaviour. If an undertaking has a “decisive influence” in an illegal activity (meaning they were essential to the activity happening or continuing), their fine can be doubled. Examples of this include leading the planning, forcing others to participate, or being the main driver behind the illegal actions.
- Mitigating factors: Assistance with on-site inspections, coercion by other undertakings, limited participation in the infringement, a low share of infringing activities in annual gross revenue, and the presence of foreign sales revenue within the annual gross revenue used as a basis for the administrative fine. There are no lower or upper limits for the reduction to be determined in line with the mitigating factors. Whether the mitigating factors will be applied, and if so, at what rate a reduction will be made, will be determined by the Competition Board on a case-by-case basis.
The Guidelines provide important explanations of the newly introduced mitigating factors to provide clarity on their application.
- Regarding “limited participation in the infringement”, the Guidelines explain that a number of factors, such as not fully carrying out a restrictive agreement or having a passive role in cartel meetings, can now act as a mitigating factor.
- In regard to foreign sales revenue, the Guidelines recognise that the TCA may view this as a reason to reduce a fine. However, this mitigating factor is not automatic. The TCA will carefully evaluate several aspects, including the structure of the affected market, whether the products or markets involved benefit from export incentives, and the proportion of foreign sales within the undertaking’s total revenue. Critically, the TCA will also assess whether the financial strength gained through exports might actually contribute to anti-competitive behaviour, such as by increasing market power or enabling sustained illegal activity, thereby leading to anti-competitive market foreclosure. In such cases, the TCA may choose not to apply any reduction, or to apply a smaller reduction, taking into account the potential negative impact on competition. Overall, the explanations point to a departure from the TCA’s recent case law, where the TCA tended to deduct export revenue and base its fines on the Turkish turnover of the undertaking.
The Guidelines provide that the TCA may also consider other mitigating factors not explicitly listed, such as encouragement by public authorities, countervailing buyer power in the market, the absence of established precedent regarding the violation in question, and force majeure.
The annex of the Guidelines provides sample tables and case studies on the calculation of fines. These tables may serve as a reference for the calculation of administrative fines.
Conclusion
The Guidelines confirm that the New Regulation marks an important step in the evolution of the penalty regime under Turkish competition law. The Guidelines appear to confirm that the TCA will continue to focus on conduct by companies with market power and penalise any anticompetitive conduct it encounters in a decisive way to ensure deterrence. This is particularly true for digital platforms and data-driven business models, which the TCA considers to have a large impact on the overall economy.
Proactive compliance measures, including robust internal competition law training and a focus on algorithmic transparency and fairness, are now more critical than ever.