Market Sharing Agreements and Cartels in Turkey

Market Sharing (Pazar Paylaşımı) is considered one of the most serious violations of competition law, equal in severity to price-fixing. It occurs when competitors agree not to compete in each other’s territories or for each other’s customers.

Types of Market Sharing

1. Geographical Allocation

“I will not sell in Istanbul if you do not sell in Ankara.” This effectively creates local monopolies, depriving consumers of choice and keeping prices artificially high.

2. Customer Allocation

“I will focus on public sector clients, and you take the private sector.” Or allocating specific large clients to specific competitors.

3. Quota Restriction

Agreements to limit production or supply to artificially inflate prices. “Let’s both stop producing in August to drive up demand.”

Legal Status: By Object Restriction

Under Article 4 of Law No. 4054, market sharing agreements are restrictions by object. Even if they don’t actually result in higher prices, the intent to share the market is enough for a fine.

• No Exemption: It is virtually impossible to get an exemption (Article 5) for a hard-core market sharing cartel.

Bid Rigging as Market Sharing

In public tenders, “Bid Rotation” is a form of market sharing. Competitors agree to take turns winning tenders by submitting fake high bids (cover bids). This is both a competition law violation and a criminal offense (Bid Rigging - İhaleye Fesat Karıştırma).

Conclusion

Any “gentleman’s agreement” to stay out of a competitor’s turf is a cartel. The Competition Board punishes this severely.

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