The Turkish Competition Authority ("TCA") recently published its 2023 Annual Report ("Report"). In this article, we have analyzed the statistics presented in the Report, including sectoral breakdowns, and compared some statistics with those from previous years.
Total Number of Finalized Cases
The total number of cases finalized by the Authority increased from 342 in 2022 to 370 in 2023. This represents an 8.2% increase. It was noted that out of the 370 cases finalized in 2023, 217 were related to merger/acquisition transactions, 145 were related to competition violations, and 8 were related to negative clearance/exemption applications.
Additionally, it was observed that 61 investigations were finalized in 2023, indicating a significant increase in this category.
As regards the sectoral breakdown of finalized investigations, the chemical and mining sector led with 21 cases, followed by the food industry with 12 cases and the machinery industry with 9 cases. These three sectors accounted for approximately 70% of the finalized investigations.
Number of Infringement Files
The number of infringement files increased from 78 in 2022 to 145 in 2023, representing an 85.9% increase. This increase indicates that the TCA has intensified its supervision of competition infringements.
The Report indicates that out of 145 files related to infringement decisions, 28 were preliminary investigation files and 117 files were related to investigations. In 25 out of the 28 preliminary investigation files, the allegations were rejected. Of the 117 investigation files, no penalties were applied in 12 cases, while 28 cases were finalized with commitments, and 68 cases were resolved through settlements.
These numbers also suggest that undertakings continue to show strong interest in the settlement mechanism.
Furthermore, 69 of the 145 competition violation cases were investigated ex officio. Among these ex officio investigations, 68 were related to breach of Article 4 of the Law on the Protection of Competition (“LPC”), and one was related to the breach of Article 6.
Exemption/Negative Clearance Applications
The Report demonstrates that out of the 370 cases concluded in 2023, 8 were related to exemption/negative clearance applications. In the exemption/negative clearance applications where the automotive and vehicles sector stood out, only 2 resulted in a negative clearance decision, while in 4 of the other 6 applications, the agreement was granted individual exemption. One application resulted in a conditional exemption decision, while another was evaluated under a block exemption.
Merger/Acquisition Transactions
The Report indicates that the Turkish Competition Board (“Board”) assessed 217 merger/acquisition transactions in 2023. This represents an 11.4% decrease compared to the 245 transactions examined in 2022.
Of the merger/acquisition transactions reviewed in 2023, 184 were approved unconditionally, 3 were conditionally approved, and 30 were deemed either outside the scope or below the threshold.
Sectoral distribution of merger and acquisition decisions shows that information technologies and platform services is by far the sector subject to the highest number of decisions with 45 files, followed by chemicals and mining, health services and automotive and vehicles.
Following the legislative amendments in 2022, the Board started to examine transactions regarding the acquisition of undertakings considered as “technology undertakings” independently from the turnover thresholds, which led the Board to scrutinize more merger/acquisition transactions. Indeed, information technologies and platform services are by far the most investigated sector within the scope of M&A reviews. However, the decrease in the total number of M&A transactions examined in 2023 may be attributable to macroeconomic reasons in particular, as well as increased scrutiny periods.
Number of Dawn Raid Appointments
The number of dawn raid appointments increased by 97.6% from 831 in 2022 to 1,642 in 2023. It is also important to note that this number was 502 in 2020 and 653 in 2021.
Given the significant rise in the number of dawn raid appointments and the fact that the TCA carries out far more dawn raid appointments than other competition authorities globally, questions arise regarding the protection of the legal interests of undertakings and their employees whose information, documents, devices, and communications are examined during dawn raids.
Administrative Fines Imposed in 2023
In 2023, the administrative fines imposed by the TCA under the Article 4 and Article 6 of the LPC were 1,900,675,663 TL. In addition, the fines imposed on a proportional basis in accordance with Article 17 of the LPC and due to the obstruction of dawn raids have also reached high amounts:
Infringement(Article 4): 1,799,182,282 TRY
Infringement (Article 6 Violation): 101,493,381 TRY.
Obstructing Dawn Raids: 267,887,916 TRY
Proportional Administrative Fines: 492,203,349 TRY
Conclusion
The Report demonstrates that the number and diversity of the TCA's activities and the competition law matters and sectors subject to examination continue to increase and diversify. In particular, the increase in the number of dawn raids carried out by the TCA and the number of dawn raids and files for which fines were imposed due to the obstruction of dawn raids, as well as the increase in the settlement and commitment applications of undertakings are considered to be significant. Thus, the assessment in the Report that 2023 is a very important year for labor markets is also noteworthy.
Finally, the upward trend is expected to continue in light of developments such as the abolition of the first written defense process with the recent amendments to the LPC and the shortening of the duration of investigations due to the limitation of the circumstances in which the TCA may provide additional written opinions in investigations, the significant increase in the number of personnel of the TCA in recent years, the strengthening of the IT infrastructure and the subjecting of transactions for the acquisition of technology undertakings to notification regardless of the turnover threshold.
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