Penalties and Sanctions in Turkish Competition Law

Violating Law No. 4054 on the Protection of Competition carries severe financial consequences. The Turkish Competition Board has the authority to impose substantial administrative monetary fines on undertakings (companies) and associations of undertakings.

Administrative Monetary Fines

Under Article 16 of the Law, the standard penalty for substantive violations (Cartels, Abuse of Dominance, etc.) is a fine of up to 10% of the annual gross revenue of the undertaking.

• Base Year: The fine is calculated based on the turnover of the financial year preceding the final decision.
• Minimum Limit: There is a statutory minimum fine amount adjusted annually (approx. 167,000 TRY for 2024).

Calculation of the Fine (Regulation on Fines)

The Board determines the exact percentage based on a step-by-step methodology:

1. Base Fine:
   • Cartels: 2% - 4%
   • Other Violations: 0.5% - 3%
2. Aggravating Factors (Increase):
   • Recidivism (repeating offense).
   • Maintaining the violation for a long duration (more than 1 or 5 years).
   • Coercing other companies into the violation.
3. Mitigating Factors (Decrease):
   • Stopping the violation immediately upon investigation.
   • Cooperating beyond statutory obligations.

Leniency Regulation (Active Cooperation)

For cartels, Turkey has a Leniency Program (Active Cooperation Regulation).

• First Applicant: The first cartel member to inform the Authority (before an investigation report is finalized) gets 100% immunity (No fine).
• Subsequent Applicants: Can receive reductions (30-50%, 25-40%, etc.) depending on the value added.

25% Early Payment Discount

If a company decides not to appeal the fine immediately and pays within 30 days of notification, a 25% discount is applied. Paying the fine does not prevent the company from filing an annulment lawsuit later to get the money back.

Conclusion

Competition law compliance is critical. A fine of 10% of turnover can bankrupt a business. If you suspect a violation within your company, applying for Leniency immediately is often the best strategy.

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