As you are familiar with from our previous posts, we are nearly obsessed with the amendments which were made to the Competition Act in 2008. The reason for that obsession is that these changes were regarded as a massive opportunity for Turkish Competition Law enforcement. Introduction of new instruments such as leniency and fines on individuals as well as the requirement to issue regulations on fines (and leniency) are the prominent innovations of the new act.
Apart from that, fixed amount of fines for procedural infringements, i.e. providing false or misleading information, failure to submit to the inspection etc., was replaced with fines that are based on a percentage of annual gross revenue of undertakings. Furthermore, the amendments have brought a lower limit for procedural infringements while it removed the lower limit for substantive infringements of competition law.
This lower limit, which was set as 10.000 Turkish Lira, has been regularly increased by the Competition Board at the beginning of every calendar year pursuant to the relevant legislation in Turkish law. In this regard, the amount was determined as 11.200, 11.446, 12.327, 13.591, and 14.651 Turkish Liras for calendar years 2009, 2010, 2011, 2012, and 2013 respectively.
All of these brings us to the topic of this post: when we look at the track record of the TCA, it is seen that a considerable number of undertakings’ fines for substantive violations are below the lower limit which is determined for procedural violations. You can see the table below for the information about the cases where substantive fines imposed are lower than a procedural fine if imposed. It also gives the ratio between the number of undertakings fined below the lower limit and the total number of undertakings fined in the same case.
In the same period, a total of 227 undertakings was fined, which means that 22,03 % of these undertakings’ fines were below the lower limit which is set for procedural infringements. However, we are yet to come to the most interesting part of the story. In Medical Gases case, for instance, the amount of the fine imposed on one of the undertakings investigated was only 0,42 Turkish Lira (around 20 cents Euro).
Given that the first and foremost goal of the Competition Act is to prevent and deter substantive infringements, it becomes questionable to remove the lower limit for substantive violations of competition law. It is also interesting that the amendments bring a lower limit for procedural violations whilst removing the one for substantive violations. I guess the legislator simply thought that these amendments would not lead to such a low level of fines at all.