Legal Framework
Under Article 4 of the Law No. 4054 on the Protection of Competition, all agreements between undertakings, decisions by associations of undertakings, and concerted practices that have — or may have — the object or effect of preventing, restricting, or distorting competition are prohibited.
However, not all restrictive agreements are automatically unlawful. Recognizing that some collaborations may enhance efficiency and innovation, Article 5 of Law No. 4054 introduces exemption mechanisms that allow certain agreements to remain valid if they satisfy specific economic and consumer-benefit conditions.
These mechanisms are categorized as Individual Exemptions and Block Exemptions.
Individual Exemptions
An individual exemption allows the Turkish Competition Board to grant permission for an otherwise restrictive agreement when it creates economic or technical efficiencies that benefit consumers without eliminating competition.
To qualify for an individual exemption under Article 5, an agreement must meet all four cumulative criteria:
- Economic or Technical Progress
The agreement must contribute to new developments, or improve production, distribution, or the provision of services. - Consumer Benefit
Consumers must receive a fair share of the resulting benefits, such as better quality, lower prices, or innovation. - Proportionality
The restrictions imposed by the agreement must not go beyond what is necessary to achieve the efficiency gains. - No Elimination of Competition
The agreement must not eliminate competition in a significant part of the relevant market.
If all four conditions are satisfied, the Competition Board may grant an individual exemption upon application by the undertakings concerned.
Typical examples of agreements that may receive individual exemptions include:
- R&D collaborations aimed at technological innovation,
- Joint production or specialization agreements improving efficiency,
- Technology transfer or know-how sharing that benefits consumers.
If an agreement fails to meet the requirements of a block exemption communiqué, it may still qualify for an individual exemption following a case-by-case assessment by the Board.
Block Exemptions
A block exemption applies automatically to categories of agreements that are presumed to meet the four criteria under Article 5.
In these cases, undertakings do not need to seek individual approval from the Competition Board. Instead, if the agreement complies with the conditions set out in the relevant communiqué, it is automatically exempted from the prohibition of Article 4.
Under Article 5, the Turkish Competition Board is authorized to issue communiqués defining the conditions for such block exemptions. The main communiqués currently in force include:
- Communiqué No. 2002/2 — Vertical Agreements
- Communiqué No. 2008/2 — Technology Transfer Agreements
- Communiqué No. 2008/3 — Insurance Sector
- Communiqué No. 2013/3 — Specialization Agreements
- Communiqué No. 2016/5 — Research and Development Agreements
- Communiqué No. 2017/3 — Vertical Agreements in the Motor Vehicles Sector
The Vertical Agreements Communiqué (No. 2002/2) is particularly significant, as it regulates the most common business arrangements between suppliers and distributors.
Under this communiqué:
- The supplier’s market share in the relevant market must not exceed 30%.
- Vertical agreements involving exclusive supply to a single buyer can benefit from block exemption only if the buyer’s market share does not exceed 30% in the downstream market.
The communiqué also specifies “hardcore restrictions” that disqualify an agreement from exemption protection, such as:
- Price fixing (resale price maintenance),
- Customer or territorial allocation,
- Restrictions on passive sales,
- Non-compete clauses exceeding five years.
Agreements containing these restrictions are automatically excluded from the scope of block exemption.
Relationship Between the Two Regimes
The Individual Exemption and Block Exemption systems complement each other.
If an agreement meets the conditions of a block exemption communiqué, it is automatically exempted.
If it does not qualify—for example, because it exceeds market share thresholds or includes a hardcore restriction—the undertakings may still apply for an individual exemption.
This dual system allows the Turkish Competition Authority to both streamline compliant agreements and review complex or unique cases in detail, maintaining flexibility while protecting market competition.
Practical Implications for Businesses
Understanding and correctly applying these exemption regimes is critical for compliance and risk management.
Businesses should:
- Review their agreements in light of both individual and block exemption criteria,
- Assess market shares, contract terms, and potential restrictive effects,
- Ensure no hardcore restrictions are included,
- Seek legal consultation when uncertainty exists regarding exemption eligibility.
Complying with exemption requirements not only mitigates the risk of administrative fines but also enhances credibility in the Turkish market by demonstrating adherence to competition law principles.
The Individual and Block Exemption mechanisms under Turkish Competition Law form a cornerstone of the country’s modern competition policy.
They provide a balanced framework that prohibits anti-competitive behavior while recognizing and encouraging efficiency-enhancing collaborations.
Through these exemptions, the Turkish Competition Authority aims to promote fair competition, safeguard consumer welfare, and support innovation-driven growth within Turkey’s dynamic market environment.
