Concerted Practices Under Turkish Competition Law

This article examines the concept of concerted practices under Turkish competition law, with comparisons to European Union law. In Turkey, competition is protected by a body of rules designed to keep markets open and fair. These rules act as an important control mechanism against conduct that restricts competition — cartels, anti-competitive agreements, mergers that harm competition, monopolisation, and concerted practices. The aim of competition law is to prevent harmful conduct and protect consumers. Within this framework, the concept of concerted practices takes on particular importance. Below, we summarise what concerted practices are and illustrate them with examples.

1. What Are Concerted Practices?

Where two or more undertakings come together and, through agreements, decisions, or a form of coordination, act to restrict or distort competition, the result is what we call a concerted practice. In other words, these are activities carried out to reduce or eliminate competition between undertakings. Turkish competition law prohibits such conduct, because its effects can distort competition and harm consumers.

Concerted practices may be sanctioned under both Turkish and EU law. Turkish competition law treats them as capable of significantly reducing competition and thereby harming consumers. EU law, in turn, treats concerted practices as capable of hindering or restricting trade within the EU and thus distorting the functioning of the single market. For these reasons, concerted practices are closely monitored, and undertakings that take part in them may face penalties.

Under Turkish competition law, concerted practices are governed by Article 4 of the Act on the Protection of Competition No. 4054 (the "Act"). In EU law, the comparable concept — "concerted practices" — is addressed within the EU competition framework.

By restricting competition between undertakings, concerted practices can lead to price increases, lower quality, or reduced innovation. They can upset the balance of market power and cause consumers to pay artificially higher prices. They may also create a barrier for new entrants and smaller businesses, because the arrangements are often designed to protect or increase market share. For these reasons, the effect of concerted practices is generally regarded as harmful, and they are prohibited under the competition laws of many countries.

2. Examples of Concerted Practices

a. Price-Fixing Agreements. Undertakings agree to set prices at a particular level. Such agreements are usually made between competitors producing similar or identical products, with the aim of reducing price competition and increasing profits. But they harm consumers by preventing the market from functioning competitively: the agreed price keeps the price consumers pay artificially high, discourages switching to alternatives, and keeps product prices elevated.

For example, if one competitor tells another, "we will not sell our products for more than TRY 10," that kind of price-fixing arrangement is unlawful. It restricts competition, causes consumers to pay higher prices in a market where they should be offered choice, and reduces the ability of other competitors to compete.

b. Output Restrictions. Undertakings agree to limit production volumes or to refrain from selling into certain markets. This distorts the functioning of the market and harms consumers. The aim is to restrict competition among firms in the sector and widen profit margins, but it disrupts the natural workings of the market to the detriment of consumers.

For example, a group of producers may restrict output to push prices up, causing consumers to pay more and face fewer options. Similarly, producers may focus only on a particular market to increase their share there, reducing competition in that market and cutting off consumers' access to alternatives.

c. Territorial (Market-Sharing) Agreements. Undertakings divide up the market in a given area and limit each other's activities there. This restricts competition and harms consumers.

For example, suppose two competing fast-food chains agree to divide the customers in a region. Each chain then operates only in a particular area, so customers in that area can choose only between the two chains, and prices can stay high as a result. Consumers' access to products and services may be limited, and the reduced competition can also reduce innovation.

Competition authorities have repeatedly examined territorial distribution arrangements between manufacturers and their distributors. Where such arrangements carve up a market along territorial lines and shield distributors in one area from competition coming from another, they restrict competition and can breach competition law — with the undertakings required to bring the arrangements to an end and exposed to administrative fines. The same logic applies under Turkish competition law: an agreement whose object or effect is to divide the market geographically falls within the prohibition in Article 4 of the Act.

d. Non-Compete Arrangements. Undertakings agree, for a period, not to interfere with — or to cooperate with — each other's activities. Such arrangements involve efforts to control the market among themselves, set prices, and grow market share, leading to restrictions on the variety, quality, and price options available to consumers.

For example, several petrol stations decide to sell fuel to all customers in a region at a set price. Here the undertakings subject customers to a fixed price level or a defined area, which restricts competition and harms consumers.

e. Agreements Harmful to the Public. Undertakings operating in public-service sectors (for example healthcare or education) agree to lower service quality or raise prices. This can harm both consumers and the public.

3. The Exception: When Concerted Practices Can Enhance Competition

Where resources are scarce or a technology has not yet fully matured, opportunities for cooperation between undertakings can arise. In these cases, firms may come together to develop technology, standardise products, or lower production costs. Such cooperation can make the market more efficient and, in fact, have a pro-competitive effect. For example, two or more undertakings may join forces on research and development in a particular field. The result may be new products or services, lower costs, or higher-quality products — benefits that can extend to consumers and to the wider sector.

For example, two or more manufacturers may pool their efforts on research and development — for instance, to build shared technology platforms for areas such as battery technology or charging infrastructure. Where such cooperation genuinely accelerates innovation, lowers costs, or brings new products to market, it can be pro-competitive and may be permitted, benefiting the environment, consumers, and the wider sector alongside the parties themselves. Whether a given collaboration is acceptable, however, turns on its object and its actual effects on competition.

That said, such concerted practices do not always enhance competition. Where the object or effect is to share out the market or foreclose competition, they can be prohibited. Assessment therefore turns on both the object and the effect. For example, two competitors might cooperate to seize control of a market, foreclosing entry by other competitors and leaving consumers with higher prices or fewer choices.

As this shows, concerted practices must be approached with care. In each specific case, one must assess whether the cooperating undertakings' activities benefit consumers and the sector.

4. Conclusion

In most cases, concerted practices distort competition and harm consumers. In certain situations, however, they can enhance competition — and, as technological change accelerates, the cooperation opportunities that arise are an increasingly important topic for competition law. Close supervision of concerted practices is therefore essential, and competition rules must be applied with appropriate flexibility. Ultimately, careful and diligent conduct by the parties is important from a competition-law standpoint, and the rules governing concerted practices need to be kept up to date.

This article provides general information on Turkish competition law and does not constitute legal advice. For advice on a specific matter, please contact OKAB — Oğuz Kara Avukatlık Bürosu.