- Has your national competition authority published guidelines on competition compliance programmes (“CCPs”)? If so, what are the key components of an effective CCP?
- Are there any recent cases in your jurisdiction where the NCA/competent courts have discussed the impact of CCPs?
- What arguments have been taken into account in relation to a CCP? Has the fact that a company has a CCP been assessed in terms of the effort made or the results achieved, i.e. the efficiency of the programme? Is the focus on future changes in CCPs or on existing programmes?
- Has the role of the management and/or employees of the company been assessed with respect to preventing, participating in, detecting and reporting violations, or remediating violations? Is there a link between the role of the company's management and/or employees and an effective CCP?
- Has the fact that an undertaking has a CCP been helpful in reducing a fine for an infringement of competition law? What facts, arguments or commitments were used to justify the reduction and what is the maximum reduction that can be granted? If a reduction is not granted, why not?
- Are CCPs (their adoption or updating) used as evidence for "self-cleaning" measures when an economic operator risks being excluded from a public procurement procedure for collusive behaviour?
- Please indicate any additional considerations / rules, trends that are important in your country in relation to CCPs.
- Are there legal developments on the horizon in relation to CCPs?
jurisdiction
1. Has your national competition authority published guidelines on competition compliance programmes (“CCPs”)? If so, what are the key components of an effective CCP?
Yes, in 2013, the Turkish Competition Authority (“TCA”) released its publication titled “Competition Law Compliance Program”, which is a set of corporate regulations and rules that enable undertakings and/or associations of undertakings to monitor themselves in terms of competition law. The minimum elements to be included in a compliance program are categorized under the following headings:
- Preparing a corporate guide explaining the principles and procedures of the competition law compliance program
- Training employees periodically
- Regular assessment and monitoring of the compliance program
- Consistent discipline and incentive practices
In addition, competition compliance programs were addressed in the Competition Letter (“Letter”) published in 2011. The Letter underlines that undertakings should be cautious of and prepared for competition law rules and that they should evaluate themselves in terms of compliance with competition law. The main factors affecting the success of a competition compliance program are summarized under five headings in the Letter as follows: (i) top management's commitment and explicit support for the compliance program, (ii) the existence of appropriate compliance policies and procedures, (iii) continuous and effective training, (iv) a regular control and evaluation process, and (v) consistent application of discipline and incentives.
2. Are there any recent cases in your jurisdiction where the NCA/competent courts have discussed the impact of CCPs?
In recent years, the Turkish Competition Board (“Board”) has issued several decisions concerning the impact of CCPs. Two of these decisions are particularly significant for the interpretation of CCPs and are frequently cited in recent rulings.
- Board Decision No. 16-37/628-279, dated 2016:
In this case, MS, LG, and Phillips argued that their training sessions and compliance programs should mitigate competition infringement assessments. However, the Board rejected this, stating that awareness of competition law and employee training do not influence infringement evaluations. The Board emphasized that compliance programs are not recognized as mitigating factors under Article 7 of the Regulation on Fines, maintaining that the existence of such programs cannot reduce penalties for competition law violations.
- Board Decision No. 13-49/710-297, dated 2013:
In this case, Linde Gas defended itself against allegations of competition infringements by arguing that the complaints submitted to the Board were received on the same dates, after which Linde promptly initiated a competition compliance programme, conducted training, performed audits, and swiftly terminated the alleged infringements. While the Board acknowledged Linde’s efforts to comply with competition law in a positive light, it nonetheless held that such efforts could not be considered a mitigating factor in reducing the base fine.
3. What arguments have been taken into account in relation to a CCP? Has the fact that a company has a CCP been assessed in terms of the effort made or the results achieved, i.e. the efficiency of the programme? Is the focus on future changes in CCPs or on existing programmes?
The TCA appreciates efforts to comply with competition law, but merely having a Competition Compliance Program (CCP) is not enough; its effectiveness is crucial. A CCP is considered ineffective if a violation occurs and the company fails to report it to the TCA before the authority becomes aware of it. At this stage, if the fundamental elements affecting the success of a CCP, as outlined in the Letter referred to in the first question, are taken into account, a significant step will be taken towards ensuring an effective CCP.
In case of a violation, companies with an effective CCP can detect and address the issue before the TCA intervenes. The 2020 Arçelik-Vestel case demonstrates this: Arçelik discovered violations during an audit, reported them to the TCA, and took prompt corrective actions, leading to no fine being imposed.
4. Has the role of the management and/or employees of the company been assessed with respect to preventing, participating in, detecting and reporting violations, or remediating violations? Is there a link between the role of the company's management and/or employees and an effective CCP?
The success of CCPs relies heavily on the involvement of company management and employees. Management must provide training to help employees detect and respond to competition violations, taking immediate corrective actions when issues arise and notifying the TCA if necessary. Regular training and control mechanisms are essential responsibilities of management.
Top management's commitment is crucial for the effectiveness of CCPs. They should actively support the program, communicate its importance to employees, and lead its implementation. Key actions management can take to strengthen legal compliance include:
- Informative Emails: Sending communications to all employees about the compliance program and the company’s commitment.
- Appointing a Compliance Officer: Designating a compliance officer to oversee and report on compliance issues.
- Training Sessions: Providing ongoing training on competition law and organizing awareness seminars.
- Disciplinary and Incentive Policies: Implementing disciplinary measures for violations and rewards for compliance to emphasize the seriousness of adhering to competition laws.
These steps help create a robust framework for preventing violations and promoting legal compliance within the organization.
5. Has the fact that an undertaking has a CCP been helpful in reducing a fine for an infringement of competition law? What facts, arguments or commitments were used to justify the reduction and what is the maximum reduction that can be granted? If a reduction is not granted, why not?
CCPs are not explicitly recognized as mitigating factors when determining fines under Turkish law. The first paragraph of Article 7 of the Regulation on Fines lists the grounds for reduction as follows: (i) assisting the investigation beyond fulfilling legal obligations, (ii) inducement by public authorities or coercion by other undertakings to engage in the infringement, (iii) voluntary payment of compensation to the aggrieved parties, (iv) cessation of other infringements, (v) a very low share of infringing activities in the annual gross revenues, and (vi) other similar circumstances. It is apparent that CCPs are not explicitly listed among the grounds for reduction. However, such programmes may indirectly result in a reduction in fines.
- Commitment and Settlement Procedure: The Commitment and Settlement Procedure, introduced in Turkish law in 2020, allows companies to propose commitments to address competition concerns during investigations. If accepted by the Board, this can prevent the initiation of an investigation or terminate an ongoing one. Companies may also settle by admitting to infringements, potentially leading to fine reductions. Effective CCPs enable companies to provide vital information to the Board, aiding in the early detection of violations. If the Board finds a company's compliance efforts adequate, it may choose not to pursue an investigation or may close one. The maximum fine reduction available under this mechanism is 25%, making the presence of an effective CCP beneficial for companies seeking to minimize penalties.
- Active Cooperation (Leniency) Process: The Active Cooperation (Leniency) Process allows companies with effective CCPs to avoid competition law infringements and understand how to respond to violations. If a company detects a violation, it can apply to the Board for leniency, potentially receiving immunity from sanctions under the Leniency Regulation. Additionally, if companies admit to other breaches and cooperate, fines can be reduced by between 1/6 (i.e., 16.67%) and 1/4 (i.e., 25%) as outlined in Article 7 of the Regulation on Fines. This process incentivizes self-reporting and active cooperation with the authorities.
- Mitigating Factors: Under the Regulation on Fines, penalties can be reduced by 25% to 60% based on specified mitigating factors. While competition law compliance programs are not explicitly listed as grounds for reduction, they can still influence the Board's discretionary decisions. The phrase "other similar circumstances" allows the Board to consider effective compliance programs when determining reductions. Consequently, having a compliance program can enhance a company's chances of achieving the maximum allowable fine reduction in conjunction with other mitigating factors.
6. Are CCPs (their adoption or updating) used as evidence for "self-cleaning" measures when an economic operator risks being excluded from a public procurement procedure for collusive behaviour?
Anti-competitive agreements and/or concerted practices between competitors in matters of collusive behaviour in procurement are considered cartels according to the Leniency Regulation. According to Article 17 of the Public Procurement Law No. 4734, acts such as collusive tendering are explicitly listed as prohibited conduct. In this context, individuals or entities found to have engaged in these acts during public tenders are barred from participating in the tenders of all public institutions and organisations for a period of no less than one year and up to two years, depending on the nature of their conduct. Therefore, the mere existence of CCPs cannot, in itself, be considered a "self-cleaning" measure within public procurement procedures, which are strictly regulated under Turkish law.
7. Please indicate any additional considerations / rules, trends that are important in your country in relation to CCPs.
There is ongoing debate in legal doctrine about whether CCPs should be considered mitigating factors for fines. However, there is consensus on their importance in raising awareness of competition law, which is essential since violations often arise from a lack of knowledge. The three primary functions of compliance are to prevent, detect, and respond to legal violations, particularly in large corporations where specific sub-programs may be needed for high-risk areas.
CCPs help companies establish monitoring mechanisms to prevent activities that could distort competition. They assist in drafting compliant contracts and avoiding risky collaborations, significantly reducing the likelihood of legal violations. Companies must evaluate their agreements for compliance and maintain documentation to avoid suspicion of violations, especially dominant firms that must not abuse their market position.
Internal training is crucial for raising employee awareness, and compliance programs should be tailored to a company’s specific risks. Establishing independent compliance officers and clear communication channels is essential for effective supervision. Employees should receive a CCP Handbook and relevant training to ensure lawful conduct.
In cases of potential violations, prompt detection is critical, and compliance communication should facilitate reporting of concerns through established channels, including whistleblowing hotlines. Companies should conduct internal investigations for significant reports and utilize external consultants for periodic reviews to identify any legal breaches.
8. Are there legal developments on the horizon in relation to CCPs?
It has been noted that amendments to the Regulation on Fines are currently under consideration, although CCPs are not anticipated to be recognised as a mitigating factor for fine reduction. However, upon completion of the proposed amendments, the draft regulation will likely be subjected to a public consultation process. Should there be substantial feedback advocating for the recognition of CCPs, it is possible that the draft may be revised to classify CCPs as a basis for fine reduction.
