Introduction
Annual report
Comment
The Competition Authority recently published its 15th Annual Activity Report. Along with its mission, vision, objectives, priorities and a description of its duties and powers, in the fourth part of the report the authority made a general assessment of its activities between January 1 and December 31 2013. In the report, the authority provided relevant data on the number of cases concluded in 2013, which has declined significantly when compared with previous years. The authority has also assessed the effect that the number of merger control filings has had on this decrease in cases.
In 2013 a total of 213 mergers and acquisitions were notified to the authority. The report indicates that there was a steady increase in the total number of transactions notified to the authority between 1999 and 2008. While there was a decrease in 2009, the number of notifications increased significantly between 2010 and 2012. There appear to be two underlying reasons for the decrease of approximately 30% in the number of total cases in 2013 – the decreases in the number of cases involving competition law violations and in merger control filings. As for the cases on competition law violations, the authority has cited the Communiqué on the Application Procedure for Infringements of Competition (2012/2) – which introduced solid procedural ground rules to be followed when filing a complaint before the authority – as a reason for the drop. In explaining the significant drop in the total number of M&A cases in 2013, the authority pointed to the Communiqué on Mergers and Acquisitions Subject to the Approval of the Competition Board (2010/4, as amended by Communiqué 2012/3).
The enactment of Communiqué 2010/4 was accompanied by a wholesale change in the Turkish merger control regime. When Communiqué 2010/4 entered into force on January 1 2011, there was debate as to whether the number of merger control cases would decrease. However, as the foreseen threshold of TRY5 million (approximately $2.8 million(1)) was too low, the introduction of Communiqué 2010/4 did not result in a decrease in merger control cases, as indicated in the data included in the report. The actual decreases in merger control cases arose from Communiqué 2012/3, which entered into force on February 1 2013 and which amended the turnover thresholds that a given merger or acquisition had to exceed before becoming subject to notification for the purposes of the Turkish control regime.
No changes were made by Communique 2012/3 to the worldwide thresholds (ie, TRY500 million(2)) and the alternative thresholds. Hence, a notification requirement applied where the aggregate turnover of the parties to the transaction in Turkey exceeded TRY100 million (approximately $56 million) and the turnovers of at least two of the transaction parties in Turkey exceeded TRY30 million (approximately $17 million). The jurisdictional thresholds were amended by raising the Turkish thresholds from TRY5 million to TRY30 million. Communiqué 2012/3 also removed the requirement for the existence of an affected market in determining whether a transaction triggers the notification requirement.
Before the amendment to Communiqué 2010/4, the parties to a transaction had no need to obtain the approval of the Competition Board, even where their turnover exceeded the turnover thresholds, if there was no affected market. It might have been expected that the amendment to the affected market provision would have resulted in an increase in the number of mergers and acquisitions subject to Competition Board approval, as the parties to a transaction must now notify every case where the turnover thresholds are exceeded, without making any assessments on the affected market. However, as can be seen from the data in the report for 2013, this was not the case. As turnover thresholds increased significantly with Communiqué 2012/3, the revised jurisdictional thresholds ended up resulting in a decrease in merger control cases – the total number of M&A transactions notified to the authority was 213 in 2013 (in contrast to 303 in 2012).
As indicated above, the decrease in the number of cases involving competition law violations and merger control filings led to a decrease in the total number of antitrust cases in 2013. In the report, the authority is supportive of this position, citing both Communiqué 2012/2 and Communiqué 2012/3 as reasons for the decline. It would therefore not be unreasonable to assume that responsibility for finally reducing the authority's workload lay with the revised jurisdictional thresholds and the debates over competition law that occurred immediately after the introduction of Communiqué 2010/4.
For further information on this topic please contact Gönenç? Gürkaynak at ELIG by telephone (+90 212 327 17 24), fax (+90 212 327 17 25) or email ([email protected]). The ELIG website can be accessed at www.eliglegal.com.
Endnotes
(1) Based on the average exchange rate for 2012 determined by the Turkish Central Bank.
(2) Approximately $263 million, based on the exchange rate determined by the Turkish Central Bank.
