Competition Authority Abandons Approach of Setting Base Penalty Rate Solely Based on Classified Violation Types

The Competition Authority has abandoned the approach of determining the basic penalty rate solely based on violation types classified as "cartel" and "other violations." The Competition Authority has reviewed the Regulation on Administrative Fines, which has been in effect for approximately 15 years. In this context, the increasing divergence of the nature of markets where competition law is applied from traditional markets, the changing business models of enterprises and consumer preferences, as well as the nature of the types of violations encountered and the subjects for the application of competition law, have necessitated a reassessment of the Authority's punishment policy in light of these changing factors.

In a statement, the Competition Authority noted, "Indeed, the increase in market power due to the proliferation of cross-border activities by large technology enterprises controlling critical assets such as user data, the broadening of this situation's competition violations across a wide economic area, and the negative effects of violations related to algorithms and data monopolization on digital markets and consumer welfare have required a re-examination of the Competition Authority's punishment policy."

In this context, the previous regulation has been revoked, and the new Regulation on Administrative Fines was published in the Official Gazette dated December 27, 2024, with issue number 32765, and has come into effect.

The statement provided the following information: "With the regulation, the approach of determining the basic penalty rate solely based on violation types classified as 'cartel' and 'other violations' has been abandoned, and a new method has been adopted, especially considering the nature of the violation and its negative impact on competition. In parallel, the lower and upper limits based on the distinction between 'cartel' and 'other violations' in determining the penalty have also been removed.

Moreover, the intervals considered for increases based on the duration of the violation have been shortened to ensure that the objective conditions of the violation are fairly reflected in the penalty. The aggravating and mitigating factors for adapting the penalty according to the subjective conditions of the enterprise have been reviewed, and the lower limit for the increase rate based on aggravating factors and the lower and upper limits for the discount rate based on mitigating factors have been removed. Thus, it aims to ensure that competition violations detrimental to consumer welfare are punished more effectively and that future competition violations can be deterred."