Firm Profile > ELIG Gürkaynak Attorneys-at-Law > Istanbul, Turkey

ELIG Gürkaynak Attorneys-at-Law
CITLENBIK SOKAK NO: 12
YILDIZ MAH, BESIKTAS
34349 ISTANBUL
Turkey

Competition Tier 1

ELIG Gürkaynak Attorneys-at-Law is renowned in the Turkish competition market, advising a variety of blue-chip clients including Bain Capital and United Technologies on merger control filings and regulatory issues. The team also has a strong record in representing high-profile clients in competition investigations before Turkish and European courts. The team is led by the highly experienced and well-regarded  Gönenç Gürkaynak. The team also benefits from an in-house economist and several former TCA practitioners among its ranks. International trade and cartel specialists Ceren Özkanlı Samlı and Onur Özgümüş were promoted to counsel. Counsel Baris Yuksel joined from Dentons. Senior associate Dilara Yeşilyaprak was a new arrival in late 2020.

Practice head(s):

Gönenç Gürkaynak

Other key lawyers:

Ceren Özkanlı Samli; Onur Özgümüş; Baris Yuksel; Dilara Yesilaprak

Testimonials

‘ELIG has a deep expertise and experience especially in competition law area. They have a strong and dedicated team who is committed to deliver high quality output with a business mindset, they always act as a solution partner, showing the most delicate and risky points to help the client take right decisions in turbulent environment. ’

Working with Gonenc & Oznur and their team is a comfort for us considering their experience in the field and great dispute resolution skills. The complicated dispute resolution matters can be solved easily due to their intelligence and ability to deal with the legal problems. They are great at specific regulations related to the competition law matters and always into the daily matters and never misses to inform us regarding the crucial legal developments especially competition law matters.’

‘Very good connection to relevant authorities.’

‘Gonenc Gurkaynak and his competition law team, consider the topic not only on a legal basis but also from a business standpoint. They understand what the company needs.’

‘Competition law is a subject most of the in-house teams do not have sufficient sources or capabilities. Peers would like to understand the depth of experience of the team and also if they have international experience and capabilities. ELIG Gurkaynak is known internationally and has such experience.’

‘Gonenc Gurkaynak is well-know on his deep knowledge in competition law, he is also an academician who teaches the subject. He and his his team are very responsive.

‘Best in class on competition law expertise, not only locally but internationally as well. They have the largest team of competition lawyers. Partner availability is very good. Responsive, they are very hand on and respond in timely manner. ’

‘The main partner Gonenc Gurkaynak is an authority in his field. Rest of the partners complement him. ’

Key clients

Google LLC

United Technologies Corporation

Natura Cosméticos

WESCO International

Anixter International

Nippon Shokubai

Aptiv PLC

Warner Bros Home Entertainment

Motion Picture Association

Brookfield Asset Management

Oaktree Capital Group

PETRONAS Chemicals Group

PCC SE

Mylan N.V.

Advent International Corporation

Bayer AG

Bain Capital Investors

Rebecca BidCo

Synthomer

Elanco Animal Health

Warner Bros. Turkey Film

3M Turkey

Allianz Sigorta

L’Oréal Türkiye

Pfizer İlaçları

Medcem Beton

Türkiye Çimento Müstahsilleri Birliği

Çimentaş İzmir Çimento Fabrikası

Afyon Çimento

Çimsa Çimento

Compliance Tier 1

Clients praise ELIG Gürkaynak Attorneys-at-Law's 'analytical' approach to regulatory compliance work, noting particular strengths in anti-corruption and data protection work. The team provides comprehensive advice to clients such as Google and L'Oreal on legislative changes and compliance with data protection, e-commerce and banking law. It also represents TMT-sector clients in governmental investigations relating to white-collar crime, competition breaches, and privacy violations. The team is led by Gönenç Gürkaynak, an experienced litigator and regulatory specialist, particularly in the competition field, alongside newly-promoted partner Ceren Yıldız, who focuses on data protection, payment services, and white-collar work.

Practice head(s):

Gönenç Gürkaynak; Ceren Yıldız

Testimonials

‘Their knowledge is not limited to legal matters. They are aware of what business needs and their focus is on those needs along with reducing the legal risks of the operations as well.’

Key clients

Google

Google Reklamcılık

Google Ireland

Mizuho Bank Group

Ralph Lauren

L’Oréal

Media and entertainment Tier 1

ELIG Gürkaynak Attorneys-at-Law advises and represents major international media and telecoms clients in a broad range of matters encompassing data protection, freedom of speech, regulatory compliance, and risk management. Social media and e-marketing are key focuses, with the firm notably representing Wikipedia in its ongoing appeal against its Turkish access ban, alongside other notable representations including those of Google and Amazon. The team is led by experienced TMT-sector litigator Gönenç Gürkaynak, regulatory compliance specialist Ceren Yıldız, and Tolga Uluay, who focuses on contentious regulatory and administrative issues.

Practice head(s):

Gönenç Gürkaynak; Ceren Yıldız; Tolga Uluay

Testimonials

‘The team uses their excellent commercial experience and communication skills for the company.’

‘The team advises on business strategies from a legal standpoint. In addition to their skills and experience in the legal field, their communication skills are valued.’

‘ELIG has provided our team with high-quality representation in Turkish courts since 2017. They have provided essential guidance on Turkish legal issues relevant to proceedings in other court systems. They excel at interpreting and explaining domestic issues for non-Turkish audiences, and provide valuable strategy advice when interacting with the Turkish government. They have been essential partners in our litigation in Turkey. ’

‘While Gonenc Gurkaynak has been the lead attorney on our case, Ceren Yildiz has provided very helpful day-to-day case management. We are also grateful for the research and analysis from some of the other attorneys.’

Key clients

Google

Twitter

Google Reklamcılık

Wikimedia Foundation

Motion Picture Association

Warner Bros. Entertainment

Ralph Lauren Europe

Mutlu Akü

L’Oréal Türkiye

Dispute resolution Tier 2

ELIG Gürkaynak Attorneys-at-Law represents clients in a variety of disputes, with experience in administrative, corporate, employment, property, and IT-related proceedings. The firm has a particularly strong record in competition matters, where it acts for a number of major multinational companies. The firm's lawyers have argued cases before Turkish courts, as well as the European Court of Justice and the European Court of Human Rights. Specialist competition litigator Gönenç Gürkaynak leads the team, alongside Tolga Uluay, who handles a diverse range of cases.

Practice head(s):

Gönenç Gürkaynak; Tolga Uluay

Testimonials

‘The team consists of experienced litigation professionals and they have close connections with other departments of the firm to receive the detailed information on the dispute. Since we work with the team for years, they can connect the outcomes of closed files with the new ones. ’

‘ELIG’s dispute resolution team works as a separate boutique law firm within ELIG with their own communication and work style. They are always reachable, have a close follow up on the subject matter. ’

‘Professional lawyers with profound experience in competition law. The entire team is hard working and extremely diligent. The ELIG team feels like part of our in-house legal team and play an important role in helping us navigating the legal landscape in Turkey. ’

‘They are very responsive and know how to guide the client through a matter.’

‘The team’s experience in terms of international cases/lawsuits. They are one of the leading law firms in the competition and dispute resolution areas.’

‘Specialist expertise in internet/online platform/freedom of speech matters. Very user-friendly for English-speaking clients.’

‘Tolga Uluay has been great throughout. Very easy to work with, very proactive, seems very comfortable with internet-related subject matter.’

Key clients

Travelex

Newell

3M Company

L’Oréal

Henkel

Twitter

YouTube

Booking.com

Google

Philip Morris

Turkish Airlines

TÜSİAD

Edenred

Mercedes

Mutlu Akü

Medtronic

Boyner

Polypag AG

AB Inbev

Tinmar

IT and telecoms Tier 2

ELIG Gürkaynak Attorneys-at-Law advises a number of major international IT companies on regulatory compliance and strategy relating to operations in Turkey, as well as representing in high-profile litigation before Turkish courts. The firm is particularly noted for its work in the e-commerce sector, including the establishment of platforms in Turkey alongside regulatory issues. The team is led by Gönenç Gürkaynak, a specialist litigator and competition expert who has represented major clients before courts, alongside regulatory and compliance-focused lawyer Ceren Yıldız, who focuses on data privacy, e-commerce, and payment services work.

Practice head(s):

Gönenç Gürkaynak; Ceren Yıldız

Testimonials

‘The team has an excellent reputation and experience on IT and telecommunications law.’

Key clients

Google LLC

Google Ireland

YouTube

Twitter

Booking.com

Foursquare Labs

LinkedIn

Wikimedia Foundation

Ralph Lauren Europe

Commercial, corporate and M&A Tier 3

ELIG Gürkaynak Attorneys-at-Law's corporate team is integrated with the firm's wider competition and disputes offering, enabling it to act across contentious and regulatory elements of transactions. The firm has a number of major international clients in the areas of internet services, retail, and private equity, where it advises on corporate governance and structuring issues alongside cross-border transactions and investments. The team is jointly led by managing partner Gönenç Gürkaynak, a highly experienced competition and merger filing specialist, and Nazlı Nil Yukaruç, who focuses on transactions and commercial law.

Practice head(s):

Gönenç Gürkaynak; Nazlı Nil Yukaruç

Testimonials

‘The team always follows the deadlines and corporate affairs regularly. They provide the right directions at the right times by giving detailed information. The team is very talented, knows the laws well and follows up the developments. Given the nature of our company’s work, their advice and attention on the details is what makes this practice unique.’

‘ELIG has a big team, always available.’

Key clients

L’Oréal

Google Ireland and Google Turkey

Ralph Lauren

Knauf Insulation

Warner Bros

CA Technologies

TRB

OCP

Tetra Pak

TI Automotive

Betafence

Harvard Business School

Booking.com

Intellectual property Tier 3

ELIG Gürkaynak Attorneys-at-Law works on a cross-practice basis with its IT and telecoms, disputes, and corporate teams in handling intellectual property matters for a wide range of clients, including Twitter and Google. The team has particular strength in the IT, telecoms, media, and life sciences sectors, advising and representing clients in trade mark, patent, and copyright matters. The team is led by experienced disputes and regulatory lawyers Gönenç GürkaynakCeren Yıldız, and Tolga Uluay.

Practice head(s):

Gönenç Gürkaynak; Ceren Yıldız; Tolga Uluay

Testimonials

‘The team has a business-minded and practical approach.’

Key clients

Motion Picture Association

Google Ireland

Google Reklamcilik

Twitter

Google

Automattic

Warner Bros

Rolls-Royce

Foursquare Labs

The firm: ELIG Gürkaynak Attorneys-at-Law is an eminent, independent Turkish law firm based in Istanbul. The firm was founded in 2005.  ELIG Gürkaynak is committed to providing its clients with high-quality legal services and combines a solid knowledge of Turkish law with a business-minded approach to develop legal solutions that meet the ever-changing needs of its clients in their international and domestic operations.

ELIG Gürkaynak has established close working relationships with a number of international law firms and has served mutual clients on numerous mergers and acquisitions transactions, competition law matters, commercial arbitrations and various other projects. The firm also has formal alliances with two Turkish law firms in Ankara and Izmir.

Areas of practice: ELIG Gürkaynak takes pride in being able to assist its clients in all fields of law.  The firm’s legal team consists of 90 lawyers.

The firm’s particular areas of expertise include competition law, corporate law, mergers and acquisitions, contracts law, anti-corruption, white-collar irregularities and compliance, Internet law, technology, media and telecommunications law, data protection and cybersecurity law, banking and finance law, litigation and dispute resolution, administrative law, real estate law, anti-dumping law, pharma and healthcare regulatory, employment law and intellectual property law.

ELIG Gürkaynak delivers the top competition law practice in Turkey with 45 competition law specialists. The team is led by Mr Gönenç Gürkaynak, ELIG Gürkaynak’s founding partner, along with two partners and five counsel. In addition to its unparalleled experience in merger control issues, ELIG Gürkaynak has vast experience in defending companies before the Turkish Competition Board in all phases of antitrust investigations, abuse of dominant position cases, leniency handlings and before the courts on issues of private enforcement of competition law, along with appeals of the administrative decisions of the Turkish Competition Authority.

Unlike many firms in Turkey, ELIG Gürkaynak has a recognised and significant practice in IT and telecommunications law. The practice covers domain name disputes, website agreements, internet copyright and internet trademarks, internet-related litigation, regulatory counselling, notice and takedown or judiciary decision enforcement assistance and localisation of telecom agreements and licenses to be signed with carriers.

ELIG Gürkaynak has a significant practice in Turkey, focusing on internal investigations and white-collar criminal matters. Among other things, the practice advises clients in connection with Turkish corporate compliance issues under the relevant OECD Convention, FCPA, the UK Bribery Act and Turkish anti-corruption laws. This includes all matters relating to data privacy, employment law, anti-corruption policies and other related aspects of the Turkish legal regime.

ELIG Gürkaynak’s corporate team assists multinational and domestic clients by providing a wide range of corporate advisory services.  The firm represents local and multinational conglomerates in numerous M&A projects, and the M&A team has vast experience and capability in handling multiple and significant M&A transactions, reorganisations, joint ventures and spin-offs. The firm’s corporate team has a solid practice in providing commercial and corporate law services to corporations, advising foreign clients during their entry to the Turkish market, and on daily operations thereafter.

ELIG Gürkaynak handles complex intellectual property matters, each one of which sets a precedent in the market. ELIG Gürkaynak’s intellectual property team provides clients with a complete range of legal services for protecting and exploiting all types of intellectual property and technology assets. The firm’s dedicated team of two partners and one counsel along with twelve associates also offer invaluable knowledge and track record in other practice areas where they are pioneers.

The firm renders a wide variety of litigation and arbitration services. The firm specialises and has very significant expertise in debt enforcement.

ELIG Gürkaynak also has a strong practice in administrative law. Mr Gönenç Gürkaynak heads the practice, which has grown significantly due to representations in numerous appeals.

Department Name Email Telephone
Anti-corruption and compliance Gönenç Gürkaynak
Banking and finance Nazlı Nil Yukaruç
Competition and EU law Gönenç Gürkaynak
Competition and EU law K Korhan Yıldırım
Competition and EU law Öznur Inanilir
Competition and EU law Dr Ekrem Kalkan
Competition and EU law Eda Duru
Corporate and commercial Gönenç Gürkaynak
Corporate and commercial Nazlı Nil Yukaruç
Data protection and cybersecurity Gönenç Gürkaynak
Dispute resolution and arbitration Gönenç Gürkaynak
Dispute resolution and arbitration Ceyda Karaoglan Nalçaci
Dispute resolution and arbitration Tolga Uluay
IT and telecommunications Gönenç Gürkaynak
Intellectual property Gönenç Gürkaynak
Litigation, administrative law Gönenç Gürkaynak
Litigation, administrative law Ceyda Karaoglan Nalçaci
Litigation, administrative law Tolga Uluay
Media and entertainment Gönenç Gürkaynak
Mergers and acquisitions Nazlı Nil Yukaruç
Pharma and healthcare regulatory Gönenç Gürkaynak
Pharma and healthcare regulatory Ceren Yıldız
Competition and EU law O. Onur Özgümüş
Competition and EU law Ceren Özkanlı Samlı
Anti-corruption and compliance Ceren Yıldız
Corporate and commercial Ceren Yıldız
Competition and EU Barış Yüksel
Litigation, administrative law Tuğba Uluay
Dispute Resolution and arbitration Tuğba Uluay
Photo Name Position Profile
Ms Ebru İnce photo Ms Ebru İnce Counsel
 O. Onur Özgümüş  photo O. Onur Özgümüş Counsel
 Ceren Özkanlı Samlı  photo Ceren Özkanlı Samlı Counsel
Ms Eda Duru  photo Ms Eda Duru Counsel
 Gönenç Gürkaynak  photo Gönenç Gürkaynak Partner dealing with all areas of regulatory and compliance matters, with particular…
 Harun Gunduz  photo Harun Gunduz Counsel
 Öznur Inanılır  photo Öznur Inanılır Partner
Dr Ekrem Kalkan  photo Dr Ekrem Kalkan Competition Economics Counsel
 Ceyda Karaoğlan Nalçacı  photo Ceyda Karaoğlan Nalçacı Counsel
Mr Tolga Uluay  photo Mr Tolga Uluay Partner
Ms Tuğba Uluay  photo Ms Tuğba Uluay Counsel
 K Korhan Yıldırım  photo K Korhan Yıldırım Partner
 Ceren Yıldız  photo Ceren Yıldız Partner
 Nazlı Nil Yukaruç  photo Nazlı Nil Yukaruç Partner
Number of lawyers : 90
English
French
German
IBA
ABA
UIA
ICC
SRA
Contact : Gönenç Gürkaynak LLM (founding partner)

Merger control regime in Turkish competition law

Turkey is a jurisdiction that receives quite significant numbers of merger control notifications due to its relatively low turnover thresholds and wide coverage that does not exclude any foreign-to-foreign transactions. The most crucial aspects of the merger control regime in Turkey are examined below.

1. Transactions that must be notified to the Turkish Competition Authority

In Turkey, the Law no. 4054 on the Protection of Competition (Law No. 4054) adopts a mandatory pre-notification regime whereby the validity of merger and acquisition transactions that lead to a permanent change in control (i.e., concentration transactions) are subject to the approval of the Turkish Competition Board (Board) if the turnover-based thresholds laid down in the Communiqué No. 2010/4 Concerning the Mergers and Acquisitions Calling for the Authorization of the Board (Communiqué No. 2010/4) are exceeded.

When determining whether a particular transaction is notifiable or not, the first step is to assess whether the transaction leads to a permanent change in control. In case the answer to this question is in the affirmative, the next step is to see if the turnover thresholds are exceeded.

1.1. Concept of control

Under the Turkish merger control regime, the concept of control means the right to exercise decisive influence on strategic business decisions of an undertaking. Control may be exercised de jure or de facto and it may take the form of sole or joint control over an undertaking.

While the most common means for acquisition of control is the acquisition of shares or assets, control may also be acquired via long-term contracts that create similar effects with acquisition of shares or assets (Amylin/Bristol/AstraZeneca, 20.02.2013, 13-11/163-85; Migros/Hamamoğlu, 14.08.2008, 08-50/721-281) and other means, depending on the nature of economic relations. For example, the Guidelines on the Concept of Control stipulates that long-term supply agreements concerning an essential component for an undertaking’s business, or loans provided by suppliers or customers may be sources of economic dependence that confer control over an undertaking, especially when coupled with structural links such as cross shareholdings and/or cross directorship.

An undertaking may either be under the sole control of another undertaking, or more than one undertaking may exercise joint control over it.

Sole control is said to exist when a single undertaking enjoys the exclusive right to define the strategic commercial decisions of another undertaking. In general, acquiring the majority of the voting rights would grant sole control to the relevant party. However, owning the majority of the voting rights is neither a necessary nor a sufficient condition for the existence of sole control. It is not a necessary condition because a minority shareholder may also have “negative sole control” over an undertaking, in case it is the only party that is able to veto strategic decisions of an undertaking without having to cooperate with any other shareholders (Mavi Giyim, 08.03.2018, 18-07/121-65). It is not a sufficient condition because certain minority shareholders may have veto rights over strategic decisions of the undertaking which would allow them to prevent the owner of the majority of the voting rights from unilaterally determining the outcome of strategic commercial decisions.

Joint control is said to exist if more than one undertaking or person has the possibility of exercising decisive influence over another undertaking. The Guidelines on the Concept of Control note that the main feature of joint control materialises when two or more parent companies have the right to reject strategic decisions and to create a deadlock situation in the decision-making process. It is important to note that the veto rights of minority shareholders that protect the financial interests of the investors (i.e., regarding changes to the master agreement of the joint venture, an increase or decrease in the capital, or liquidation) do not confer joint control to minority shareholders. Only veto rights that concern strategic decisions and business policies may constitute basis for joint control and the most common examples of such veto rights are those that relate to; (i) the appointment of senior management and determination of budget, (ii) business plan, (ii) important investments, and (iii) rights that are particularly important in specific markets.

All transactions that lead to a change in the control structure of an undertaking (eg change of sole control, transition from sole to joint or joint to sole control etc.) constitute concentrations. The only exemption relates to transactions that lead to a reduction in the number of parties that exercise joint control over an undertaking, without conferring joint control to any new undertaking or person.

Formation of a joint venture is also deemed as concentration, given the said joint venture satisfies the conditions of full-functionality laid down in the Guidelines on the Concept of Control. According to the Guidelines, the following conditions are required to establish full-functionality in a joint venture:

  • having sufficient resources to operate independently,
  • engaging in activities beyond one specific function for the parents,
  • being independent from the parent companies in sale and purchase activities, and
  • operating on a lasting basis.

Joint ventures that do not fulfil the criteria for full-functionality may be deemed as anti-competitive agreements between the parents and assessed by the Board accordingly.

1.2. Turnover-based thresholds

Article 7 of the Communiqué No. 2010/4 holds that a transaction would be notifiable in case one of the following turnover thresholds are triggered1:

  • The aggregate Turkish turnover of the transaction parties exceeding TRY ₺100m (approx. €12.4m; or approx. USD $14.2m) and the Turkish turnover of at least two of the transaction parties each exceeding TRY ₺30m (approx. €3.7m; or approx. USD $4.2 million) (Article 7/1(a)),
  • The Turkish turnover of the transferred assets or businesses in acquisitions exceeding TRY ₺30m (approx. €3.7m; or approx. USD $4.2m) and the worldwide turnover of at least one of the other parties to the transaction exceeds TRY ₺500m (approx. €62.4m; or approx. USD $71.3m) (Article 7/1(b)(i)),
  • The Turkish turnover of any of the parties in mergers exceeding TRY ₺30m (approx. €3.7m; approx. USD $4.2m) and the worldwide turnover of at least one of the other parties to the transaction exceeds TRY ₺500m (approx. €62.4m; approx. USD $71.3m) (Article 7/1(b)(ii)).

As seen above, Article 7/1(b) actually provides two separate tests; Article 7/1(b)(i) is applicable only in cases of acquisition transactions (as well as joint ventures) while Article 7/1(b)(ii) is applicable only in cases of merger transactions.

It is important to note that, as per Article 8/2 of the Communiqué No. 2010/4, the Board evaluates the transactions realised within a period of three years by the same undertaking and concerning the same relevant product market as a single transaction; and the same for two transactions within a three year period carried out between the same persons or parties.

As to the subjects whose turnovers would be calculated, Article 8 of Communiqué No. 2010/4 states that the turnover of the entire economic group (ie all undertakings under the same control structure) that the relevant party belongs to, should be taken into consideration. However, in acquisition transactions, only the turnover of the transferred parts (ie the target) should be considered rather than the entire economic group of the seller.

As a final remark, the relevant thresholds in transactions that concern the formation of green-field full-function joint ventures are only those of the parents, as the joint venture to be established (ie the target) does not generate any turnover. This means that in such cases, only the threshold stipulated in Article 7/1(a) of the Communiqué No. 2010/4 should be taken into consideration.

1.3. Notifiability of foreign-to-foreign transactions

Under the current merger control regime, the lack of an affected market in Turkey is not sufficient to eliminate the notification requirement, although it is quite relevant for the substantive assessment.

The Board rendered multiple decisions on the matter, detailing several different aspects of foreign-to-foreign transactions. In Eksim-Rönesans/Acıbadem (16.05.2012, 12-26/759-213), the Board stated that a joint venture established outside of Turkey could have indirect effects over Turkish markets even if it would not have any operations in Turkey. This approach of the Board indicates that a JV transaction that will not have any effect in Turkey in the near future is still deemed to fall within the scope of the Law No. 4054.

The Board’s other precedents (e.g. Sumitomo/Toyota, 20-10/101-59, 13.02.2020; Galenica Ltd./ Fresenius Medical Care AG&Co. KGaA, 11-59/1515-540, 24.11.2011; Blackstone Group, 11-57/1468-525, 17.11.2011; Ocean 11-45/1106-382, 17.08.2011; Angola LNG Limited, 12-22/564-162, 25.04.2012) clearly indicate that even though the JV is not/will not be in active in Turkey and will not have any effects on the Turkish markets in the near future, the transaction is still subject to notification.

Against this background it may be reasonable to assume that the approval of the Board is required for all foreign-to-foreign transactions where relevant turnover thresholds are met. As a matter of fact, in the 2020 Merger and Acquisition Outlook Report published by the Authority on 5 March 2021, it is stipulated that 132 transactions out of a total of 220 that had been examined by the Authority in 2020 were foreign-to-foreign transactions2.

 

Outlook of the Notified Transactions in Turkey (2020)

2. Consequences of closing a notifiable transaction without the Board’s approval

It should first be emphasised that both failing to notify a notifiable transaction (ie failure to notify) and closing a notifiable transaction without waiting for the Board’s approval after making a notification (ie violation of the suspension requirement) constitute violations of the Law No. 4054. While any of these conducts would lead to the imposition of an administrative monetary fine, only a single administrative fine may be imposed per the Law No. 4054. In other words, it is not possible for the Board to impose separate fines both for the failure to notify and the violation of the suspension requirement.

2.1. Failure to notify

Article 11 of the Law No. 4054 sets forth that in case of failure to notify, the Board shall examine the relevant transaction on its own initiative when it is made aware of the transaction in any way and decide whether the relevant transaction is in compliance or not with Article 7 of the Law No. 4054 (ie whether it leads to a significant impediment of effective competition (SIEC)).

In case the Board decides that the relevant transaction is in compliance with Article 7 of the Law No. 4054, it clears the transaction and only imposes a fine due to failure to notify. The undertakings concerned are imposed an automatic monetary fine of 0.1% of the turnover generated in the financial year preceding the date of the decision in Turkey for failure to notify. These undertakings are both of the merging parties in case of a merger, or, the acquiring parties in case of an acquisition. In joint ventures, as the acquiring parties will be ultimately controlling the newly formed joint venture, the acquiring parties will be liable for the fine. The Board is not obliged to determine and prove any effect within a relevant market in Turkey to impose such a fine. It is important to remember that there is an abundance of Board precedents concerning the imposition of monetary fines due to failure to notify. Most recent decisions of the Board in that respect are BMW/Daimler/Ford/Porsche/Ionity (20-36/483-211, 28.07.2020) and Brookfield/JCI (20-21/278-132, 30.04.2020).

Besides the monetary fine, the main consequence of a failure to notify shall be the invalidity of the transaction with all its legal consequences, unless and until it is approved by the Board. Hence, the parties shall be unable to enforce their rights under the transaction agreement(s) before Turkish courts and build on this transaction in Turkey prior to the clearance of the transaction by the Board.

If the parties were to engage in any official business with Turkish administration, this violation matter shall be raised, and in any case, if the parties were to have a transaction in the future which has to be filed with the Turkish Competition Authority (Authority), the Authority would halt the entire notification process at that time, ask for a notification on the earlier transaction, review that, impose the administrative monetary fine and issue the decision for that particular matter, and only then engage in working on the actually notified transaction as seen in cases such as the BMW/Daimler/Ford/Porsche/Ionity (20-36/483-211, 28.07.2020) and Ersoy/Sesli (14-22/422-186, 25.06.2014).

If, on the other hand, the Board considers that the relevant transaction significantly restricts competition in any relevant product market especially by way of creating or strengthening a dominant position, Article 11(b) of the Law No. 4054 entitles the Board to launch an investigation ex officio and impose an additional monetary fine of up to 10% of the annual Turkish turnover of the undertakings concerned for violating Article 7 of the Law No. 4054. Furthermore, pursuant to Article 9/1 of the Law No. 4054, the Board is entitled to order remedies to take the necessary actions to restore the environment of competition before the closing of the transaction (restitutio in integrum).

2.2. Violation of the suspension requirement

The suspension requirement dictates that the parties shall not close a notifiable transaction before obtaining the approval of the Board. The parties will be in violation if they close the said transaction while the assessment of the Board is not finalised and a clearance decision rendered.

To understand whether a violation of the suspension requirement is in question, it is imperative to define what constitutes closing of a transaction. While the transfer of the legal ownership of the subjects of control (eg shares or assets) is the most obvious example of closing; exchanging commercially and competitively sensitive information, taking administrative actions and/or making recommendations, establishing joint marketing or working teams and initiating the integration process between the undertakings may also be deemed as equivalent to closing (Ajans Press, 10-66/1402-523, 21.10.2010 and A-Tex/Labelon, 16-42/693-311, 06.12.2016). To be more specific, any de facto indication showing that the transaction is implemented before the approval of the Board is indicative of violation of the suspension requirement.

Whether the Board approves the transaction and whether an effect within a relevant market occurs do not affect the assessment on the violation of the suspension requirement. Once it is determined that the parties did commit this violation, a turnover-based fine is automatically imposed on the relevant parties, calculated as 0.1% of the turnover generated in Turkey, for the financial year preceding the date of the decision.

The legal consequences that would arise in case the Board does not approve the transaction and considers that it violates Article 7 of the Law No. 4054 would be the same with those explained above with respect to failure to notify.

3. The review process

The Board may decide either to approve a transaction during the course of a Phase I Review, or to investigate it further within the scope of a Phase II Review, within 30 days.

3.1. Phase I review

The procedure surrounding a merger control filing is regulated under Article 10 of the Law No. 4054. When all of the required information is provided with the application filed by the parties, Phase I review begins. If the information provided in the notification form is deemed to be incomplete, the Authority may send requests for further information and the review period only begins on the date when all the requested information is completed and submitted by the parties.

Moreover, the Board may send written requests to the parties themselves, any other party in connection with the transaction, or third parties such as competitors, customers or suppliers during either phase, to scrutinise and possibly eliminate any competitive issues regarding the transaction.

The Board may also ask for another public authority’s opinion in reviewing a transaction. The timing works similarly with an information request from the parties during Phase I, so that the review period restarts on the date the relevant public authority submits its opinion. The Phase I review pertains to the Board’s preliminary review of the filing.

Pursuant to Article 10 of the Law No. 4054, if the Board takes no action or decision during this 30-day period, this is understood as a tacit approval and the transaction becomes legally valid. To clarify, if the Board makes an information request to better assess the transaction during Phase I, this 30-day period gets reset and starts again after the responses to the information request are provided.

3.2. Phase II review

If the Board decides to take a transaction into Phase II to conduct a thorough competitive assessment, it opens a full-fledged investigation. Pursuant to Article 43 of the Law No. 4054, Phase II Review shall be completed within six months from the date of the Board’s decision. If deemed necessary by the Board, an additional period of up to six months may be granted to extend this period. Said extension may only be applied once.

The Board may decide to approve the transaction after the Phase II review is over. If not, the report shall be provided to the parties and the procedure continues as per the Law No. 4054 provisions with regards to investigations. Said procedure consists of the parties’ second written defences, the additional written opinion of the Authority, the parties’ third written defences and the oral hearing.

Per the 2020 Merger and Acquisition Outlook Report of the Authority, out of a total of 220 transactions examined by the Authority in 2020, only three of them were taken into a Phase II Review. The Board decided to block one of these transactions (Marport/TILS, 20-37/523-231, 13.08.2020), conditionally cleared another one based on the remedies offered by the parties (PSA/FCA, 20-57/794-354, 30.12.2020) and unconditionally cleared the third one (Gülçiçek/Fragar, 20-31/388-174, 25.06.2020).

4. Carve-out and hold-separate arrangements

While it is possible to have carve-out and hold-separate arrangements to prevent an effect within the relevant market before obtaining the approval decision of the relevant authority, such practice is rarely seen in Turkey. It should be stated that there is no normative regulation allowing or disallowing carve-out arrangements, however, the decisional practice of the Competition Board shows that there is a tendency to dismiss carve-out and hold-separate mechanisms under the Turkish merger control regime.

There are precedents of the Competition Board in which it clearly dismissed carve-out arrangements (Total/CEPSA, 06-92/1186-355, 20.12.2006 and CVR Inc/Inco Limited, 07-11/71-23, 01.02.2007). On the other hand, there are three cases which may serve as exceptions to the Competition Board’s outlook on carve-out and hold-separate arrangements. These cases, namely; Prysmian S.p.A/Draka (11-15/259-87, 10.03.2011), Bekaert/Pirelli (15-04/52-25, 22.01.2015) and APM Terminals B.V./Grup Maritim TCB, S.L. (16-16/267-118, 11.05.2016) had especially unique characteristics with regards to their market and business activities where the models envisaged allow the prohibition of any effect in the relevant market in Turkey, or the transaction is necessitated by foreign laws and regulations to be closed before obtaining the Competition Board’s decision.

5. Procedures concerning remedies

Article 14 of the Communiqué No. 2010/4 allows Parties to propose remedies to the Authority during either phase of the review. Remedies aim to negate competition law concerns and to ensure that the transaction would be in compliance with Article 7 of the Law No. 4054.

While remedies may be submitted during either phase of the review, it should be noted that, for a remedy to be deemed sufficient during Phase I, the competitive concern needs to be clearly and easily identifiable and the remedy in question needs to be equally clear.

During Phase II, remedies may be submitted before or after the completion of the Phase II Report, which substantiates all the competitive concerns raised by the case handlers.

If remedies proposed by the parties before the completion of the Phase II Report are found sufficient by the case handlers, the remedies are submitted to the agenda of the Board to be discussed along with the report, without waiting for the expiry of the statutory time periods. If, on the other hand, the remedies are found to be insufficient by the case handlers, they remedies are submitted to the Board’s agenda together with the Phase II Report, completed in the statutory time period.

In case the Board decides that these remedies are sufficient, it renders a conditional clearance decision. If they are deemed insufficient however, the Board sends the Phase II Report to the parties and requests their written defences.

The parties would be allowed to submit a new set of remedies after receiving the Phase II Report should they so desire.

Parties may propose new remedies or expand on their previous proposals up until the submission of their second written pleas. Any commitments submitted after the period for the second written plea is expired, shall be ignored. The final decision as to whether the remedy proposals of the parties would be accepted or not rests with the Board. Yet, it should be noted that the Board may not conditionally clear a transaction based on requirements that were not proposed by the parties as remedies.

If the Board conditionally approves the transaction, the Board shall reference the proposed commitments in its decision and clarify whether they constitute obligations or requirements. Obligations and requirements have different legal consequences in a case of non-compliance since compliance with requirements is a prerequisite for the validity of the transaction, whereas compliance with obligations is not.

In case of non-compliance with obligations, the parties may be subject to administrative fines provided for in Article 17 of Law No. 4054, which is a monetary fine based on the turnover generated in the financial year preceding the date of the fining decision, at a rate of 0.05%.

Whereas in case of non-compliance with a requirement, the decision granting approval to the transaction will automatically be invalid and the transaction will be void as the violation of Article 7 of the Law No. 4054 is deemed not resolved.


1 Pursuant to Article 8/6 of Communiqué No 2010/4 and Paragraph 24 of the Guidelines on Undertakings Concerned, Turnover and Ancillary Restraints, for the purpose of calculating the turnovers, the amounts in foreign currencies will be converted to TRY based on the applicable Turkish Central Bank average buying rate for the relevant year. As such, for the purposes of this summary, the amounts in EUR and USD were converted using the respective exchange rates of EUR 1 = TRY 8.01 and USD 1 = TRY 7.01 in accordance with the applicable Turkish Central Bank average buying rate for the 2020 financial year (i.e., 01.01.2020 – 31.12.2020).
2 https://www.rekabet.gov.tr/Dosya/geneldosya/bd-gorunum-raporu-2020zm_sp_sd-pdf

COMPETITION

ELIG Gürkaynak Attorneys-at-Law delivers the top competition law practice in Turkey with 45 competition law specialists, out of a total of 90 lawyers at ELIG Gürkaynak. In addition to unparalleled experience in merger control issues, ELIG Gürkaynak has vast experience in defending companies before the Turkish Competition Board in all phases of antitrust investigations, abuse of dominant position cases, leniency handlings, and before courts on issues of private enforcement of competition law, along with appeals of the administrative decisions of the Turkish Competition Authority.

ELIG Gürkaynak represents multinational corporations, business associations, investment banks, partnerships and individuals in the widest variety of competition law matters, while also collaborating with many international law firms.

ELIG Gürkaynak has an in-depth knowledge of representing defendants and complainants in complex antitrust investigations concerning all forms of abuse of dominant position allegations, and all forms of restrictive horizontal and/or vertical arrangements, including price-fixing, retail price maintenance, refusal to supply, territorial restrictions and concerted practice allegations.

In addition to significant antitrust litigation expertise, the firm has considerable expertise in administrative law, and is well equipped to represent clients before the High State Court, both on the merits of a case and for injunctive relief. ELIG Gürkaynak also advises clients on a day-to-day basis in a wide range of business transactions that almost always contain antitrust law issues, including distributorship, licensing, franchising and toll manufacturing issues.

Competition law contact:

Gönenç Gürkaynak, Founding Partner

Tel: +90 212 327 1724

gonenc.gurkaynak@elig.com

For information, please go to http://www.elig.com

TURKEY

ELIG Gürkaynak Attorneys-at-Law delivers the top competition law practice in Turkey with 45 competition law specialists, out of a total of 90 lawyers at ELIG Gürkaynak.

In addition to unparalleled experience in merger control issues, ELIG Gürkaynak has vast experience in defending companies before the Turkish Competition Board in all phases of antitrust investigations, abuse of dominant position cases, leniency handlings, and before courts on issues of private enforcement of competition law, along with appeals of the administrative decisions of the Turkish Competition Authority.

ELIG Gürkaynak represents multinational corporations, business associations, investment banks, partnerships and individuals in the widest variety of competition law matters, while also collaborating with many international law firms.

ELIG Gürkaynak has an in-depth knowledge of representing defendants and complainants in complex antitrust investigations concerning all forms of abuse of dominant position allegations, and all forms of restrictive horizontal and/or vertical arrangements, including price-fixing, retail price maintenance, refusal to supply, territorial restrictions and concerted practice allegations.

In addition to significant antitrust litigation expertise, the firm has considerable expertise in administrative law, and is well equipped to represent clients before the High State Court, both on the merits of a case and for injunctive relief. ELIG Gürkaynak also advises clients on a day-to-day basis in a wide range of business transactions that almost always contain antitrust law issues, including distributorship, licensing, franchising and toll manufacturing issues.

Competition law contact:

Gönenç Gürkaynak, Founding Partner

Tel: +90 212 327 1724

gonenc.gurkaynak@elig.com

For information, please go to http://www.elig.com

Ms. Çiğdem Gizem Okkaoğlu; Former Competition Expert / Rapporteur of the Turkish Competition Authority; joins ELIG Gürkaynak Attorneys-at-Law.

ELIG Gürkaynak Attorneys-at-Law is proud to announce that Ms. Çiğdem Gizem Okkaoğlu has joined its competition law team of 48 specialized competition lawyers as of the beginning of September 2021.

Mr. Harun Gündüz, Chief Legal Counsel of Turkish Competition Authority, joins ELIG Gürkaynak Attorneys-at-Law.

ELIG Gürkaynak Attorneys-at-Law is proud to announce that Mr. Harun Gündüz –the chief legal counsel of the Turkish Competition Authority with more than 16 years of specific competition law experience at the Turkish Competition Authority- has joined its competition law team of 48 specialized competition lawyers as Counsel.

The deputy head of the Supervision and Enforcement Department-I of the Turkish Competition Authority joins ELIG Gürkaynak Attorneys-at-Law.

ELIG Gürkaynak Attorneys-at-Law is proud to announce that Ms. Ebru İnce has joined its competition law team of 48 specialized competition lawyers as Counsel.

Recent Amendments Introduced to the Law No. 4054 on Protection of Competition

Authors: Gönenç Gürkaynak, Öznur İnanılır, Burcu Can, Sinem Uğur and Esen Ergül of ELIG Gürkaynak Attorneys-at-Law

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.


Legislative Proposal to Amend Law No. 6493 on Payment Services and Electronic Money

The Legislative Proposal on Amending the Law No. 6493 on Payment and Security Systems, Payment Services and Electronic Money Institutions (“Proposal”), has recently been submitted before the Grand National Assembly of Turkey.