Turkey Sees Rise in Transaction Reviews by Competition Authority

The scrutiny of transactions by the Turkish Competition Authority (the Competition Authority) has shown a significant increase, highlighting the strict approach taken in merger control. This is evident in recent cases and developments surrounding merger control in Türkiye, which are crucial to understand for businesses operating in this jurisdiction.

The Competition Board, as the key decision-making body of the Competition Authority, plays a vital role in reviewing and adjudicating merger and acquisition notifications. Comprising seven members and headquartered in Ankara, the Competition Board holds the responsibility of overseeing merger control activities in Türkiye.

The primary legislation governing merger control in Türkiye includes Law No. 4054 on Protection of Competition and Communiqué No. 2010/4 on Mergers and Acquisitions Requiring the Approval of the Competition Board. Notably, Communiqué No. 2022/2, published on 4 March 2022, introduced amendments that impacted the notifiability analysis of merger transactions and notifications submitted to the Competition Authority.

Article 7 of Law No. 4054 empowers the Competition Board to define which mergers and acquisitions must be notified to be considered valid, a task usually undertaken through communiqués like Communiqué No. 2010/4. These regulations outline the scope of mergers and acquisitions subject to review and approval by the Competition Board in Türkiye.

In a bid to align Türkiye’s competition law with EU regulations, the Competition Authority has released guidelines on merger control, reflecting the principles of European antitrust and merger control laws. These guidelines cover various aspects, including market definition, undertakings concerned, turnover calculations, ancillary restraints, and more, mirroring relevant EU regulations.

Transactions that fall under Communiqué No. 2010/4’s purview include mergers of two or more undertakings or the acquisition of control over all or part of one or more undertakings by existing controlling entities. Control, as defined by Türkiye’s merger control regulations, pertains to the decisive influence over a company’s day-to-day management or long-term strategic decisions, exercisable de jure or de facto.

Notably, acquisitions of minority shareholdings may trigger merger notifications if they result in a lasting change in the target entity’s control structure. Similarly, joint ventures that function as independent economic entities are subject to notification and approval by the Competition Board in Türkiye.

Overall, understanding the intricacies of Türkiye’s merger control regime, recent developments, and the stringent approach taken by the Competition Authority is crucial for businesses navigating mergers and acquisitions in this jurisdiction. Compliance with merger control regulations is essential to ensure successful transactions and avoid penalties or legal challenges.