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The Turkish Competition Authority (Rekabet Kurumu) imposes administrative fines on many international companies such as Google. But can these fines be enforced under international law? In this week’s article you can find the answer to this question and our detailed assessment.
Competition law lays down rules that all companies must comply with in order to ensure the balanced functioning of the market. In Türkiye, the Competition Authority (Rekabet Kurumu) is the principal authority in this field and operates with powers conferred on it by Law No. 4054 on the Protection of Competition. The enforceability of fines imposed on foreign companies in particular is a matter that raises questions about the limits of the Competition Authority’s jurisdiction and its connection with international law.
According to Article 2 of Law No. 4054, all activities that affect goods and service markets within the borders of the Republic of Türkiye fall within the scope of this Law. This means that companies headquartered abroad may fall within the jurisdiction of the Competition Authority on account of their activities in the Turkish market. However, the collection of administrative fines imposed on foreign companies entails a number of legal and practical difficulties.
If a foreign company has a representative office or assets in Türkiye, the fine can be collected through those assets. However, if the company has no physical presence in Türkiye, the enforceability of fines becomes much more difficult. In such a case, international legal mechanisms may come into play. However, these mechanisms also generally prove insufficient for the collection of administrative fines.
The main mechanisms to which Türkiye is a party under international agreements are as follows:
Mutual Legal Assistance Treaties (MLATs): They provide for information sharing and legal assistance, but administrative fines generally fall outside their scope.
OECD Competition Committee: It provides guidance on international cooperation and information sharing, but does not secure the collection of fines.
New York Convention: It provides for the recognition of arbitral awards, but does not cover administrative decisions.
EU-Türkiye Customs Union: It harmonises competition policies, but does not contribute to the enforceability of fines.
As can be seen, the existing international mechanisms concentrate mostly on information sharing and cooperation. There is no clear path for the actual collection of administrative fines imposed on foreign companies. This situation may cause the deterrent effect of the Competition Authority to remain limited.
In conclusion, in order to increase the enforceability of the fines imposed by the Competition Authority on foreign companies, international mechanisms need to be made more effective and new solutions need to be developed.
