Not So Gentle After All: Substantial Administrative Fines from the Competition Authority

On August 02, 2023, the Competition Authority announced the amounts of fines issued against 16 companies operating in various sectors pursuant to its decision dated July 26, 2023. The administrative fines add up to a hefty 151 million 148 thousand Turkish Liras in total.

The investigation was conducted in order to determine whether the undertakings violated the Law on the Protection of Competition (“Competition Law”) by entering into “gentlemen’s agreements” in labor markets with the intention of not recruiting employees from each other.

The Competition Authority found these agreements to be based on a mutual agreement of the employers not to compete over the effort of the employees, which is one of the most critical resources of businesses. It was also declared in the announcement that such agreements may limit the mobility of labor, and therefore, wages cannot receive their real value. According to the Competition Authority, this ultimately leads to inefficiencies in the distribution of employees and distortion in the competitive structure of labor markets.

On the other hand, the fact that 21 undertakings have been found not to violate the Competition law and have not been imposed administrative fines poses uncertainty about whether individual exemptions will be granted. We will have to wait and see the reasoned decision.

The undertakings subject to administrative fines and the amounts of fines imposed are listed below:

You can read the relevant announcement here.

With thanks to Ömer Emin Yılmaz for his support of this article.