Category: Turkiye

The articles of the Turkish Code of Obligations No.6098 (‘’TCO’’) had been postponed for workplaces lease agreements. It will be entering into force on July 1,2020 for office leases. The articles of the TCO will come into effect if not postponed again. This is known to cause considerable effects to the ongoing office lease agreements.

The Impact of The Articles Which Will Not Be Coming into Force

• Lease Assignments

Article 320 of the TCO concerns regulating the agreement of the lease to third parties. As a rule, the written consent of the landlord is needed for a lease agreement to be assigned to a third party. However, when it comes to office lease agreements, a landlord cannot abstain from providing the written consent if there is a fair cause. To put in a different way, from July 1, 2020, the landlord cannot refuse to give consent to the assignment unless there is a valid cause if the tenant wants to assign the lease agreement.

• The Return of the Leased Property Prior to the End Date

Article 325 of TCO states that; in an event where the leased property is returned without conforming the termination period or the lease term, the tenant will need to continue performing its obligations under the agreement for a reasonable period of time where the property may be leased under alike conditions. Under the same article of the TCO, if a tenant finds another potential tenant that can pay the rent and is ready to sign the agreement, and if the landlord would reasonably accept that person as a tenant, the original tenant’s obligations would no longer have effect.

With the  entry into force of the article on July 1, 2020 subject to office leasers, in an event where the tenant wishes to evacuate the property before the lease agreement comes to an end, if they will find a potential tenant (as described above), they may be released from any obligations of the lease agreements.

Termination Placed on a Probable Cause

Article 331 of TCO based on probable cause for termination.  Although the article has been postponed until July 1, 2020, includes an alike clause (Article 264), parties may terminate the agreement if it is based on a probable cause for fixed-term lease agreements.

From July 1, 2020, the office leases concerning indefinite terms may be terminated if based on a probable cause. As given in Article 331, another change will be on determining the amount of indemnity, which will now be determined by considering the characteristics of the case by the judge.

Prohibition of Linked Transaction

The article 340 of TCO that regulates the prohibition of linked transactions is prohibited for the landlords to ask a tenant to bargain any obligation that is not related to the using of the leased property, and against their benefit. If a contract will be based on such conditions, will be deemed to be invalid.

Security Deposits

Article 342 of TCO, gives that in an event where the security deposit has been foreseen within the lease agreement, the amount cannot exceed the amount of three months of rent. Additionally, the parties cannot withdraw the amount without having either parties’ approval, final court decision or a final execution order and the deposit should be deposited in a bank account. From July 1, 2020 onwards, Article 342 will be applied to the security deposits under office leases.

Nevertheless, since there is a considerable risk for the banks on the conditions of the withdrawal, the banks are seen as reluctant to open up such accounts. 

Additionally, although the lease agreements predict that there will be no interest applied to the security deposits, the tenant will have the chance to ask for interest after the termination of the agreement and the evacuation of the property.

• Prohibition as to Changes to the Detriment of the Tenant

In Article 343 of the TCO it is given that there cannot be any changes made following the signing of the contract to the deterioration of the tenant excluding the rent amount. Although the enforcement of Article 343 has also been postponed, there is a similarity of the clauses between the ACO and the Real Estate Rents Law. Therefore, there will not be a change in practice after the enforcement of the article.

• Prohibition as to the Regulation to the Detriment of the Tenant

Practically, this article will most probably the most discussed article among other articles that will come into force after July 1, 2020.

The difference between the prohibition of the regulation to loss of the tenant and the prohibition of changes to the loss is controlled by Article 346 of the TCO. There is no obligation excluding the payment of the rent and side costs under the Article. From July 1, 2020 onwards the clauses obliging a penalty for non-payment and acceleration, will be invalid.

Acceleration clauses (states that in situations where if the tenant has failed to pay the rent in the required time phase, all the endured payments will be due). Nevertheless, other penalty clauses such as clauses which deal with the obligation to keep stores located in shopping malls etc., have been having discussions evolving around them that will need to be looked at into more depth by following the Supreme Court verdicts.

Conclusion

The articles of TCO that have been postponed will be applicable to the lease agreements from July 1, 2020 since essential. This will cause substantial differences in the lease agreements. Many articles safeguarding the tenants especially during the COVID-19 measures relevant to sectors including retail, restaurants etc., will be a crucial one for the relationships between tenants and landlords.

By Guden 

BTS & Partners has advised the Growth Circuit venture capital firm on an unspecified investment in Invidyo — a developer of child monitoring devices that rely on artificial intelligence.

The BTS & Partners team was led by Senior Counsel Okan Arican. The firm did not reply to our inquiry on the matter.

After rounds of revisions and failed attempts of enactment over a span of several years, the proposal for an amendment to the Law No. 4054 on Protection of Competition (“Law no. 4054”) (“Amendment Proposal”) has finally been approved by the Turkish parliament, namely the Grand National Assembly of Turkey, yesterday.

The latest version of the proposal was submitted to the parliament on May 15, 2020. On June 16, 2020, the amendments passed through the parliament but not yet entered into force. While the final version of the amendments as enacted is yet to be seen, the Amendment Proposal provides an insight as to the novelties we can expect from the new law in a nutshell.

According to the recital of the Amendment Proposal, these amendments aim at reflecting in the Law no. 4054 the Authority’s experience in over 20 years of enforcement and bringing Turkish competition law closer to the EU law. The Amendment Proposal essentially (i) clarifies certain mechanisms in the Law no. 4054 which might have led to legal uncertainty in practice to a certain extent, and (ii) introduces new mechanisms as to the selection of cases for the Authority to focus on, a new substantive test for merger control, behavioral and structural remedies for anti-competitive conduct and procedural tools enabling the Board to end its proceedings in certain cases without going the whole nine yards when the parties opt for commitments or settlement. The Amendment Proposal also includes certain provisions concerning the organizational structure and personnel of the Authority.

The most prominent changes introduced by this proposal are as follows:

De minimis principle

One of the most important amendments in the proposal is the introduction of the “de minimis” principle. With this amendment, the Turkish Competition Board (“Board”) will be able to decide not to launch a full-fledged investigation for agreements, concerted practices and/or decisions of association of undertakings which do not exceed the market share and turnover thresholds that will be determined by the Board. This principle will not be applicable to hard-core violations such as price fixing, territory or customer sharing and restriction of supply.

With this new mechanism, the Turkish Competition Authority (“Authority”) appears to aims steering its direction, as well as public resources, to more significant violations.

SIEC test

In line with the EU law, the Amendment Proposal replaces the current dominance test with the “significant impediment of effective competition” (SIEC) test. This amendment aims to allow a more reliable assessment for the unilateral and cooperation effects that might be arose as a result of mergers or acquisitions. With this new test, the Board will be able to prohibit not only transactions that may result in creating a dominant position or strengthening an existing dominant position, but also those that can significantly impede competition.

Behavioral and Structural Remedies for Anti-competitive Conduct

The Amendment Proposal aims to grant the Board the power to order structural remedies for anti-competitive conduct infringing Articles 4, 6 and 7 of the Law No. 4054, provided that behavioral remedies are first applied and failed. Both behavioral and structural remedies should be proportionate to and necessary to end the infringement effectively.

Settlement and Commitment

The Amendment Proposal introduces two new mechanisms that are inspired by the EU law and aim to enable the Board to end investigations without going through the entire pre-investigation and investigation procedures.

The first mechanism is the commitment procedure. It will allow the undertakings or association of undertakings to voluntarily offer commitments during a preliminary investigation or full-fledged investigation to eliminate the Authority’s competitive concerns in terms of Articles 4 and 6 of the Law No. 4054, prohibiting restrictive agreements and abuse of dominance. Depending on the sufficiency and the timing of the commitments, the Board can decide not to launch a full-fledged investigation following the preliminary investigation or to end an on-going investigation without completing the entire investigation procedure. However, commitments will not be accepted for violations such as price fixing between competitors, territory or customer sharing or and the restriction of supply. The Board will provide the details of these new procedures by secondary legislation. Additionally, the Board may reopen an investigation in the following cases: (i) substantial change in any aspect of the basis of the decision, (ii) the relevant undertakings’ non-compliance with the commitments, (iii) realization that the decision was decided on deficient, incorrect or fallacious information provided by the parties.

Second, the Amendment Proposal also introduces the settlement procedure. This would enable the Board, ex officio or upon parties’ request, to initiate the settlement procedure. Parties that admit an infringement can apply for the settlement procedure until the official service of the investigation report. The Board will set a deadline for the submission of the settlement letter and if settled, the investigation will be closed with a final decision including the finding of a violation and administrative monetary fine. If the investigation ends with a settlement, the Board can reduce the administrative monetary fine by up to 25%.

On-Site Investigation Process

The Amendment Proposal also includes an explicit provision that during on-site inspections, the Authority can inspect and make copies of all information and documents in companies’ physical records as well as those in electronic space and IT systems, which the Authority already does in practice. This is also confirmed in the Amendment Proposal’s preamble as it indicates that the amendment serves “further” clarification on the powers of the Authority which are particularly important for discovering cartels.

Self-Assessment Procedure

Before the amendment, Law No. 4054 stipulated that the Board may individually exempt certain agreements, concerted practices and decisions of associations of undertakings, which left it somewhat unclear whether “self-assessment” is applicable. The amendments aim to provide legal certainty as to the individual exemption regime by clarifying that the “self-assessment” principle applies to agreements (as well as concerted practices and decisions of associations of undertakings) that may potentially restrict competition. The option to apply to the Board for individual exemption is still available.

Time extension for the Authority’s Additional Opinion in Investigations

If the Amendment Proposal was accepted as is, certain changes are expected in the investigation procedures and the timelines with the amendments. This includes an option to double the time period for the submission of the Authority’s additional opinion (currently 15 days).

Conclusion

The Amendment Proposal contains elements that would help with the convergence of the enforcement of Authority with that in the EU. It is designed to be more compatible with the way the law is actually being applied and aims to further comply with the EU competition law legislation on which it is closely modelled and align with the amendments in the EU competition law. It introduces several new dimensions and changes which promise a procedure that is more efficient in terms of time and resource allocation as well as the amendments serving further clarification on the authorities of the Authority during on-site inspections. On the other hand, depending on whether or not the Amendment Proposal passed as is, the most significant discussion point would be if behavioral remedies necessarily have to be tried and proven to fail as a pre-condition for the Authority to be able to introduce structural remedies in a given matter.

By Gonenc Gurkaynak, Partner, ELIG Gürkaynak Attorneys-at-Law

BTS & Partners has advised the shareholders of mobile payment and bank transfer service provider Payguru on the sale of 100% of its shares to Tpay Mobile. Norton Rose Fulbright London and the Inal Kama Attorney Partnership advised Tpay Mobile on the deal.

BTS & Partners’ team included Partner Tugrul Sevim, Senior Counsel Okan Arican, and Associate Yeseren Sozuer.

The Inal Kama Attorney Partnership’s team included Partner Ekin Inal and Associate Ecem Naz Boyacioglu. Norton Rose Fulbright’s team included New York- and Istanbul-based Partner Ayse Yuksel Mahfoud, London-based Partners Bayo Odubeko and Michael Alliston, London-based Senior Associate Nari Ertem, and London-based Associate Will Scott.

Allen & Overy and Gedik & Eraksoy have advised Standard Chartered Bank and Bank of America as arrangers of an ESG-linked syndicated loan facility for Turkey’s Garanti BBVA.

The facility contains a sustainability-linked margin ratchet that adjusts according to Garanti BBVA’s performance against a number of environmental and sustainability performance indicators. This is the first such ESG-linked loan in Turkey and, according to Allen & Overy, it “is believed to be the first in the world to be made available to a bank.”

“The strong appetite among lenders saw 28 of them across 13 countries join the facility and is testament to the growing importance of sustainability in the financial markets; a trend we expect to continue, both in Turkey and globally,” said Adam Fadian, Counsel at Allen & Overy.

Allen & Overy’s team included Partner Joe Clinton, Counsel Adam Fadian, Associate Edward Charlton-Jones, and Candidate Attorney Marco Zacchino.

Gedik & Eraksoy’s team included Partner Hakki Gedik, Associate Dilsah Gurses, and Junior Associate Burak Ozsoy.

Fintech is described by the Financial Stability Board (FSB) as “technology-enabled innovation in financial services that could result in new business models, applications, processes or products with an associated material effect on the provision of financial services”. Fintech companies of all sort, have so far triggered a remarkable transformation in the provision of financial services. The impacts of this ongoing transformation on market structure is inevitable, as these companies are growing as new market players.

The complementary and cooperative relationship between fintechs and traditional financial institutions is unstable, as fintech are starting to create competitive pressure instead of providing competitive edge to incumbents. This trend is expected to continue and further accelerate as a result of; growing technology, progressive regulation, evolving consumer preferences, cooperation agreements and mergers (1) among fintechs with different or similar business models and (2) between fintechs and bigtechs.

Turkish fintech markets experienced a remarkable merger recently. Turkish local fintech company Iyzico was acquired by PayU, the global fintech company having operations in 17 countries. PayU is an international payment service platform and ultimately controlled by Naspers, an international undertaking having investments in technology, media and e-commerce. Two major operations of Naspers in Turkey are the activities of PayU and Letgo. Payu Turkey is a payment company licensed by Banking Regulation and Supervision Board and provides virtual POS services and card data storage services. Letgo is an online platform service that enables the purchase, rental and sale of products and services like real estate, cars, electronics, used clothes etc. On the other hand, Iyzico is a payment service and electronic money organization. Iyzico offers an easy and secure payment management platform for e-commerce companies operating in various sizes and different areas. Iyzico also operates in the virtual POS services and card data storage services markets in parallel with PayU.

The activities of the PayU and Iyzico overlap horizontally in two markets; virtual POS services and card data storage services markets horizontally. In addition, parties have a vertical relationship between virtual POS services and online platform services of Letgo as well.

Parties has already received approval from Turkish Competition Authority (TCA) and the reasoned decision of the Authority was published in the early November 2019. The following remarks can be noted from the TCA decision:

1. The “virtual POS services market”, where parties overlap, is a multiplayer market with a large number of banks and other virtual POS providers. Banks are direct competitors of PayU and Iyzico in this market. TCA determined that the competition in the market would not be adversely affected in the virtual POS services market as the market share of the merged entity will still be very low after the merger and the market is competitive with a large number of players. Moreover, there are competitors with a serious customer networks such as banks.
2. “Card information storage services market’’, the second horizontally overlapped market specific to this case, is considered as an independent market from payment services. This service can be supplied as a main or a subsidiary service by several undertakings as there is no entry barriers to the market such as licensing. In order to identify the market power of the undertakings which provide card data storage service as an independent and professional service, TCA focused on the “activities of non-bank undertakings” and selected “the number of cards stored” as the best indicator available to foresee market share. TCA concluded that the power of the merged undertaking will be limited and it will create competitive pressure on the current market leader.
3. Regarding the vertical relationship between “online platform services market” and “virtual POS services market”, TCA took into considerations the market share analysis done in the past com case and update information obtained from the parties. Accordingly, Letgo’s market power will be limited in all possible market definitions. In addition, no sale agreement regarding service/product between Letgo and PayU Payment and Iyzico exist in the current situation.

Based on these assessments, TCA approved the merger between these two fintech companies in the initial phase. The implications of this concentration on financial markets worth to be monitored.

By Metin Pektas, Antitrust and Compliance Partner, Nazali Tax & Legal

White & Case and its associated Turkish firm, GKC Partners, have advised interactive entertainment company Zynga Inc. on its USD 1.8 billion acquisition of Istanbul-based Peak Oyun Yazilim ve Pazarlama, A.S. Baker McKenzie, working with its Turkish affiliate, the Esin Attorney Partnership, advised Peak on the transaction, which is expected to close in the third quarter of 2020.

According to White & Case, the transaction, which is the largest acquisition of a start-up in Turkey to date, makes Peak Turkey’s first “unicorn.”

White & Case describes Peak as a mobile gaming company with two franchises, Toon Blast and Toy Blast, “that have consistently ranked in the top 10 and top 20 grossing US iPhone games for more than two years, respectively.” According to the firm, “the transaction is the largest acquisition of a start-up in Turkey to date and makes Peak Turkey’s first unicorn. Zynga will acquire 100% of Peak for USD 1.8 billion, comprised of USD 900 million in cash and USD 900 million of Zynga common stock.”

White & Case’s team included Istanbul-based Partner Asli Basgoz, Silicon Valley-based Partner Bijal Vakil, Washington DC-based Partner Rebecca Farrington, London-based Partners Emmie Jones, Will Smith, Lindsay Canning, Tim Hickman, and Mark Israel and Associates Elena Ruggiu and Lily Teh, Hamburg-based Partner Justus Herrlinger and Associate Lars Petersen, and New York-based Partner David Johansen and Counsel Elodie Gal.

GKC Partners’ team included Partner Emre Ozsar, Competition Advisor Sezin Elcin Cengiz, and Associates Asli Gulum, Sezgin Bas, Elif Berberoglu, Selin Kaledelen, Damla Cay, Lidya Ercan, and Can Argon.

Esin Attorney Partnership’s team included Partners Eren Kursun, Yalin Akmenek, Birturk Aydin, and Hakan Ozgokcen, Senior Associates Orcun Solak, Sertac Kokenek, Gunes Helvaci, Mine Guner, Demet Kasarcioglu, Can Sozer, and Sinan Diniz, and Associates Serenay Cinki, Enes Sevencan, Gokhan Akcaalan, Aybuke Gundel Solak, Ceren Seymenoglu, Gokce Serez, Ece Gonulal, Cem Buran, Ismail Ozgun, Emrehan Mermer, Defne Sahin, and Sam Gizem Sozer.

Baker McKenzie’s team included London-based Partners Charles Whitefoord, Alistair Craig, and Michelle Blunt, Senior Associates Danielle Brouard and Joanna de Fonseka, and Associates James Adams, Jee Yoon Chung, and Huynh Khuong Duy Le, Washington-based Partners Nathaniel Douglas, Thomas Egan, Brian Burke, and Anne Batter and Associates Jean-Paul Theroux and Maryam AlSayyad, Dusseldorf-based Partner Johannes Weichbrodt, Houston-based Partner Kai Kramer and Associate Ross Staine, and Chicago-based Counsel Michael Poland.

Editor’s note: After this article was published, Dentons informed CEE Legal Matters that it too, along with its affiliate Balcioglu Selcuk Ardiyok Keki Avukatlik Ortakligi, advised Hummingbird Ventures CVA as the investor seller. BASEAK’s team included Partners Galip Selcuk and Ozge Akman, Counsel Selahattin Kaya, and Associates Cisem Altundemir, Ozgun Kirgin, Denizhan Uslu, Nisan Bukulmez, Erkin Tuzcular, and Derin Aydin. Dentons’ other lawyers involved included Istanbul-based Partner Nadia Cansun and New York-based Partners Ira Kotel and Timothy Santoli and Counsel Rob Condon.

Also, CEE Legal Matters learned that BTS & Partners had advised Endeavour Catalyst, as an investor seller, and Abcoo had advised Peak Founder and CEO Sidar Sahin. BTS & Partners’ team was led by Senior Counsel Okan Arican, and Abcoo’s team included Partner Murat Aygun and Senior Associate Beril Hepagir.

Subsequently, CEE Legal Matters learned that the Verdi Law Firm had advised selling shareholders Earlybird Verwaltungs GmbH, Evren Ucok, and Demet Suzan Mutlu Ucok on the deal. The firm’s team was led by Managing Partner Can Verdi and Partner Ayse Demirel Atakan and included Partner Akin Ekici, Senior Associates Ozer Koseoglu, and Associates Cem Avaroglu, Dogac Gunaydin, and Anil Tuncay.

BTS & Partners has advised Turkish logistics company Yolda and its founders on their receipt of an investment of USD 835,000 from Collective Spark, an investment fund focusing on tech companies, and various angel investors. Ilhanli Baser advised Collective Spark on the investment.

BTS & Partners’ team included Senior Counsel Okan Arican and Associates Burcu Cinar and Gulce Gurdal.

Ilhanli Baser’s team was led by Partner Benan Ilhanli.

Recently, the spread of COVID-19 has been classified as a “pandemic” by the World Health Organization. With the global contagion of the epidemic, rumors have appeared regarding the development of new medicines and vaccines in Turkey, as everywhere else, and this situation has caused much misleading news and information to be published by the media and on the Internet.

Pharmaceutical Industry In Turkey

The pharmaceutical industry in Turkey continues to grow from year to year, especially in terms of domestic R&D investment. According to 2019 reports, the sector reached a sales volume of approximately TRY 31 billion and more than 2 billion boxes of pharmaceutical goods in 2018. These numbers make Turkey the 17th largest market in the global pharmaceutical industry.

Authorization of medicines in Turkey is made by the country’s Medicines and Medical Devices Institution – a subsidiary of Turkey’s Ministry of Health. The Institution is responsible for determining the rules and standards regarding the licensing, production, storage, sale, import, export, placing on the market, distribution, putting into service, collection, and use of products falling within its purview, as well as authorizing and inspecting public and private legal entities and real persons to carry out these activities and imposing sanctions on them when necessary. The Institution authorizes medicines in accordance with the Human Medicinal Products Authorization Regulation, dated 19.01.2005.

Authorization Process

The authorization process begins with an application to the Institution with relevant documents and reports. All documents and reports submitted at this stage are kept confidential by the Institution. The application will be reviewed and a response sent to the applicant within 30 days after the application is received. If there are any missing documents, applicants have an additional 30 days to submit them.

After the application is complete, the Institution will begin its evaluation, which must be finalized within 210 days (unless there is a state of emergency or missing documents or information have been requested from the applicant). When authorizing a medicine, the Institution will evaluate whether it is proven efficient and reliable under the prescribed conditions of use, with appropriate technical and pharmaceutical properties. However, where public health requires, the Institution may abandon the application of some of the criteria mentioned above by taking into account pharmacoeconomic data.

The Institution will issue its authorization for medicines determined to be in accordance with the criteria stipulated in the regulation, will inform the applicant directly, and will announce the authorization in the Official Gazette.

Even after the authorization process, of course, successful applicants remain responsible to the Ministry in accordance with the conditions set out in Article 24 of the Regulation to produce the medicines in accordance with specifications related to safe use, product availability in the market, and, most importantly, public safety.

This responsibility is supervised and enforced in a strict manner in Turkey, as it is around the world. In Turkey, people and institutions who were found to have illegally distributed and sold drugs were fined a total of TRY 6.65 million in administrative penalties in 2019.

Conclusion

As reflected by the extensive authorization process, medicines are supervised in a strict manner by the Turkish Medicines and Medical Devices Institution in order to protect public health and ensure the highest level of compliance with international agreements and regulations. Even obtaining authorization after the development stage of the medicine takes nearly a year in Turkey. Even if this period can be shortened in emergency situations – such as an epidemic – the Institution continues its supervision in a strict manner.

In this context, much of the news regarding the Coronavirus pandemic published on the Internet or broadcast by the media is misleading, because even if a drug is developed in a short time, it takes a long time to complete the clinical trial, R&D, and licensing processes. For this reason, it is predicted by the World Health Organization that effective drugs for the Coronavirus outbreaks which are affecting the whole world today can be released in the spring of 2021 at the earliest.

By Nazli Sezer, Partner, and Kaya Kayaoglu, Senior Attorney, Sezer & Utkaner

This Article was originally published in Issue 7.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

The coronavirus pandemic has produced material effects on economy and triggered a global economic crisis leading to major changes in commercial activities. Significant part of the world population has largely changed their spending habits that almost stopped the functioning of multiple industries while demand for several others such as health equipment, food products and cleaning materials upsurged. Towering demand for these products caught companies unprepared and led to a supply crisis.

The economic consequences of the pandemic require well-designed, prompt and strong public policies and government interventions for preserving the continuity of economic activity during and after the outbreak. Competition policy is a solid public policy tool available to governments to overcome demand and supply shocks encountered during this crisis. Not surprisingly, antitrust authorities all over the world have taken swift actions and responded to this crisis situation. With the intention to execute an agile competition policy and to guide undertakings under enforcement risk, many authorities formed temporary “task forces”. 

Antitrust responses that came to the forefront focused basically on three aspects;

• Legitimization of cooperation agreements between undertakings for tackling the supply crisis

Most of the antitrust authorities declared publicly and released comfort letters swiftly for specific cases where undertakings engaged in different types of agreements for tackling supply problems and eliminate scarcity in the markets where demand mounted. This less-interfering policy motivated many actors in health, hygiene, food and pharma to cooperate and produce industry-based and multilateral solutions instead unilateral firm-based efforts.

• Preventing anti-competitive practices of undertakings seeking to get benefit of demand increase and panic situation of consumers,

Authorities announced to act harsher than normal periods, against irrational anti-competitive practices that create no efficiency and eliminate competition. This approach is the response to the fact that undertakings may have greater motivation in crisis periods to engage into anti-competitive collaborations to increase prices and reduce output. Undertakings with market power on the other hand may take the opportunity of crisis situation to abuse this power by exploitative pricing. Accordingly, Turkish Competition Authority and many other watchdogs have responded to such practices with swift investigations.   

• Paving the way to the state aids schemes designed to alleviate financial problems of industries negatively impacted by the pandemic.

State aids to be provided in Europe are subject to antitrust review and approval of the European Commission. The Commission has so far approved more than 50 financial aid packages of member states very quickly, targeting industries and companies negatively impacted by the pandemic crisis. The basis for these quick approvals is to ensure the functioning of such undertakings in the market and maintain employment.

Despite this state aid policy of the Commission during the crisis, a remarkable opinion advocates that the state aids should not be allowed and that the survival of companies should be left to natural selection. This contrary argument bears in mind, the fact that undertakings operating in Europe are lagging behind the world in terms of investment and innovation. This view argues that the inefficient undertakings are protected by the competition authorities by allowing state aids in Europe, and therefore the investment and innovation motive of productive companies is reduced, and that the crisis is an opportunity to get rid of inefficient undertakings.

The concrete practices of the competition authority in Turkey addressing extraordinary market conditions emerged during pandemic are listed below:

• Turkish Competition Authority (TCA) initiated an examination over food price increases in the COVID-19 period based on the observations that food prices and fresh fruit and vegetable prices in particular are rising excessively. The Authority announced that the highest possible available in the legislation will be applied to individuals and institutions engaged in anti-competitive actions in this period. (23.03.2020)
• TCA President issued a press statement that the people and institutions that caused the increase of prices and supply shortages, especially in the food market, during this harsh period will be punished severely under the law No. 4054. (25.03.2020)
• The oral hearings to be held on in April 2020 are postponed. (26.03.2020)
• As part of COVID-19 measures, TCA announced that all applications, petitions and document submissions to the Authority, should be made online through.
• TCA announced that the deadlines for investigations, research and investigations continued to function during the Covid-19 crisis. In addition to this, within the scope of the investigations carried out, TCA decided that the accept the applications of the related undertakings to provide additional time to submit their second and third written defense and accept the issues that were intended to be submitted in addition to the written defense but could not be raised within the specified period, during the investigation until 30.04.2020. (17.04.2020)
• TCA initiated an investigation against 29 companies which operate in beauty/hygiene/health, food and chain retailing sectors. (08.05.2020)

By Nazali Tax & Legal Competition Law Department