Mini Plenary 3: Cartel Enforcement and Leniency in Developing Agencies Leniency Programme in Turkey Gülçin DERE Competition Expert Turkish Competition Authority All views expressed belong to the spokesperson and shall not be attributed to the Turkish Competition Authority.

2 Outline Leniency Programme –Leniency Regulation (2009) –Leniency Guidelines (2013) Leniency Applications-Cases –Medical Gas Case –SunExpress and Condor Case –Sodium Sulphhate and Raw Salt Case –MPS Metal Case –3M Case

Leniency Programme Article 16(6) of the Act no 4054 on the Protection of Competition (the Act) –fines mentioned in Article 16 may not be imposed to those making an active cooperation with the Board for purposes of revealing contrariness to the Act, or –reductions may be made in penalties to be imposed pursuant to such paragraphs taking into consideration –the quality, –efficiency, – timing of cooperation 3

Leniency Programme Characteristics Full and partial leniency Corporate and individual leniency Marker system Cartels and On-the-Spot Inspections Support Division –a unit assigned by the Competition Board for the implementation of the Leniency Regulation 4

Leniency Regulation (2009) Leniency Guideliness (2013) The principle is that the conclusion shall be in favor of those who cooperate Leniency programme – only applies to cartels –Leniency may be rewarded for both undertakings and managers/employees, managers and employees who apply independent from the undertaking -procedure is similar 5

Procedure A three-way race among undertakings managers and employees undertakings and their managers/employees

Immunity From Fines First come first served principle: –The first undertaking which submits the information and evidence meets the requirements applies independently from its competitors applies before the Board decides to carry out a preliminary inquiry shall be granted immunity from fines

Immunity From Fines The first undertaking which –submits the information and evidence, –meets the conditions, –applies independently from its competitors, applies as of the decision by the Board to carry out preliminary inquiry until the notification of the investigation report, –shall be granted immunity from fines on condition that the Authority does not have sufficient evidence

Reduction in Fines The undertaking which submits the information and evidence meets the conditions applies independently from its competitors, applies after the decision of the Board to initiate a preliminary inquiry and before the service of the investigation report cannot benefit from immunity from fines shall receive a reduction in fines

Conditions Applicant must submit information and evidence about the products affected, the duration of the cartel, the names of the undertakings party to the cartel, specific dates, locations and participants of cartel meetings –no obligation to submit evidence that will add significant value to the case Applicant should not conceal or destroy information/evidence Applicant should »end its involvement in the alleged cartel »keep the application confidential »maintain active cooperation If the applicant coerces other undertakings, it cannot benefit from immunity but receives reduction in fines

Procedure (Marker System) Cartels and On-the-Spot Inspections Support Division may give time to undertakings for submitting information and evidence for this period, the undertaking must provide information concerning affected products, the duration of the cartel and the names of the parties to the cartel The application and request for time to prepare information and evidence –shall be made by the representative of the undertaking in writing –may be submitted orally

Procedure Even if the application is made by the undertaking –managers or employees who actively cooperate and disclose the undertaking’s violation can also benefit from the exemption or reduction 12

Leniency Applications-Case Study Medical Gas Case (2010) Sector: chemical products Relevant product market: industrial and medical gases establishment of whether 55 undertakings operating in the industrial and medical gases market violated Article 4 of the Law 4054 (cartel) by bid-rigging in public procurement Oral application by Berk Gaz (the first –in-the-door) –was made before the service of the investigation report, –fulfilled the necessary obligations –received total immunity 13

Leniency Applications-Case Study -Berk gaz received full immunity from administrative fines however according to the Turkish Criminal Code bid-rigging is a criminal offence -Therefore, its executives could not avoid criminal prosecution

Leniency Applications-Case Study Under Turkish Competition Law –competition law infringements are sanctioned by administrative fines – immunity or reduction in respect of fines is granted does not protect an undertaking from the criminal law consequences of violated Article 4 of the Act by bid-rigging in public tenders

Leniency Applications-Case Study SunExpress and Condor Case (2011) SunExpress and Condor violated Article 4 of the Act by engaging in anti-competitive practices in the flights between Germany and Turkey for a certain period of time - price fixing through various distribution agreements Sector: transportation 1.Application SunExpress –was made before the Board decided to carry out a preliminary inquiry, –received full immunity 2.Application Condor –was made before the notification of the investigation report, –received reduction in fines %50 16

Leniency Applications-Case Study Sodium sulphhate and raw salt case (2010) Sector: chemical products Application –for sodium sulphate was made before the notification of the investigation report, –for raw salt after the investigation report is officially served Sodaş Sodyum made a leniency application and received a reduction of one-third of the fine to be imposed its General Manager applied for leniency and received a %50 reduction in his fine 17

Leniency Applications-Case Study MPS Metal Case (2012) Sector –Two-party cartel in steel strap market Application was made before the notification of the investigation report Establishment of whether MPS Metal and Bekap Metal violated Article 4 of the Act by acting in collusion in procurement tenders for steel rings, by jointly fixing prices and/or terms of sales, and by exchanging information Reduction in fines (%50) 18

Leniency Applications-Case Study 3M Case (2012) –Application was made before the Board decided to carry out a preliminary inquiry Sector:electricity/electronic –Relevant product market: traffic signalization materials market establishment of whether certain undertakings operating in the traffic signalization materials market violated Article 4 of the Act by bid-rigging in public tenders after the completion of the investigation, the Board decided that the acts subject to the investigation did not infringe Article 4 of the Act 19

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