Personal Liability in Competition Investigations: Insights from Recent Board Decision

Introduction

After a long pause, the Turkish Competition Authority (“Authority”) imposed an individual monetary penalty on a company executive. In this context, the Authority launched an investigation into a company that provides consulting and auditing services to private motor vehicle driver training schools and motor vehicle driver training schools. As part of the investigation, on-site inspections were conducted at private motor vehicle driver training schools operating under the Directorate of National Education in Aydın and at the Company’s premises.

Settlement Process

While the investigation initiated by the Competition Board was ongoing, all parties requested the initiation of a settlement process under Article 43 of the Act on the Protection of Competition No. 4054 (“Act”) and the Settlement Regulation[1] . Thirty-eight undertakings, excluding the Company, submitted their settlement proposals within the prescribed timeframe, and the process concluded with a settlement for these undertakings.[2] In contrast, since the Company failed to submit its settlement proposal within the prescribed timeframe, the settlement process remained inconclusive for this undertaking. It was also noted that the Company did not submit a written defence.

Findings from On-Site Inspections

Documents obtained during on-site inspections reveal that driver training courses for motor vehicles jointly determined the registration fees for trainees regarding driver’s license classes during various periods, under the coordination of a Company official. The documents also indicate that compatibility of the established base prices was ensured through penal clauses, that promissory notes were issued for this purpose, and that payments were collected under the name of “dues” to monitor the price coordination.

In other words, it has been determined that driving schools jointly set registration fees for driver’s license classes; an agreement was reached with the Company official regarding the implementation of these prices; and sanctions, including promissory notes, penal clauses, and monetary fines, were imposed on those operating below the established prices.

Assessment from the Perspective of Competition Law

Article 4 of Act No. 4054 prohibits any agreement, concerted practice, or decision by an association of undertakings that restricts competition. In this context, the concept of “agreement” is broader than the concept of “contract” under the Law of Obligations. As explained in the legislative rationale for the article, it refers to “any settlement or agreement by which the parties feel bound, even if it does not comply with the formal requirements”. In such cartel-related violations, the existence of the agreement is sufficient to establish the violation; proof of its implementation or effect is not required. Pursuant to the investigation in question, it was determined that the Company assumed a facilitating role in maintaining the cartel and, as such, liability arose under Article 4 of Act No. 4054.

Exemption Assessment

In the ex officio exemption assessment conducted by the Board regarding the agreements under investigation, it was determined that the practices did not contribute to economic or technical progress; rather, they raised prices above competitive levels, leading to a net reduction in consumer welfare. Therefore, it was deemed that an exemption under Article 5 of Act No. 4054 could not be granted.

Personal Liability of Managers and the Determinative Influence Criterion

Pursuant to Act No. 4054, administrative fines of up to five percent of the penalty imposed on the undertaking or association of undertakings may be imposed on managers or employees of the undertaking or association of undertakings found to have had a decisive influence in the violation of Act No. 4054. In the Penalty Regulation (“Regulation”),[3] “decisive influence” is defined as “an indispensable role in the formation and/or continuation of the infringement.” Furthermore, the presence of decisive influence in the violation is listed as an aggravating factor in the Regulation.

Administrative Fines Imposed

In this context, it was decided to impose a total administrative fine of TRY 111,904.28  on the Company, increased due to its decisive influence in the violation and on the grounds that it violated Article 4 of Act No. 4054 by participating in price agreements as a cartel facilitator.

Additionally, it was decided to impose an administrative fine of TRY 5,595.21 on the individual holding the position of Company official and manager, on the grounds that this person had a decisive influence in the formation and continuation of the violation by organizing the implementation and continuation of the protocols and applying steering and enforcement mechanisms over other motor vehicle driver training courses.

Conclusion

This decision serves as a strong warning to the business community, reiterating that individuals playing an active role in violations may also be held liable. It is essential for all businesses to rigorously implement competition law compliance programs within their internal operations to mitigate legal risks.

You can access the full text of the relevant decision, which is only in Turkish, here.

With thanks to Ayşenur Aslan for her contributions.

References

(Only in Turkish) Settlement Decision of the Competition Board numbered 25-27/652-399. (2025, 07 24). Retrieved from Competition Authority: https://www.rekabet.gov.tr/Karar?kararId=babdd963-fc82-4152-961a-e72f7ad26a02

Regulation on Administrative Fines to Apply in Cases of Agreements, Concerted Practices and Decisions Limiting Competition and Abuses of Dominant Position. Retrieved from Competition Authority: https://www.rekabet.gov.tr/Dosya/para-cezalari-yonetmeligi-20250306110611418.pdf

Regulation on the Settlement Procedure Applicable in Investigations on Agreements, Concerted Practices and Decisions Restricting Competition and Abuses of Dominant Position. Retrieved from Competition Authority: https://www.rekabet.gov.tr/Dosya/para-cezalari-yonetmeligi-20250306110611418.pdf