Competiton Compliance Program And Its Importance

Nowadays competition compliance program has become a hot topic in our country. It is an issue that concerns all undertakings, especially joint stock companies. The importance of the subject mainly arises from the sanctions in case of a competition infringement and the loss of company’s reputation.

As we all acknowledge, competition law legislation constitutes the most important regulations of the free market economy. The main objective of the free-market economy principle and the competition law regulations that protect this principle is to protect competition in the market and to achieve consumer welfare.

Competition law regulations are mainly aimed to prevent any attitude, behaviour and/or contract that restricts competition. For this purpose, excessive fines have been determined as a sanction for violations of competition law regulations. In this regard, fines are higher than the profit obtained as a result of competition infringement. Thus, it is aimed to prevent undertakings from acting against competition regulations and avoiding the fines they may face as a result. Moreover, a loss of reputation which has a negative impact and could be encountered as moral damages, should not be ignored.

When examined the framework of the general regulations of Turkish Law, it can be seen that the Turkish Commercial Code does not impose an obligation on companies to develop a competition compliance program. However, the Turkish Commercial Code regulates that corporate legal entities must act within the scope of the prudent person principle. Therefore, legal entities are held responsible within the framework of the Turkish Commercial Code in the case of competition infringement caused by not acting prudently.

In addition, although the attitudes, actions and contracts that constitute an infringement of competition created by an undertaking, it is clear that these violations are carried out through managers or employees. Likewise, the regulations regarding the liability of company managers in case they act contrary to the duty of care are included in the Turkish Commercial Code. In this regard, it should be reminded that in case of a violation of competition law within the company, both the company and the manager will be liable.

In addition to the general regulations of the Turkish Commercial Code, there is also a distinctive legislation in our country within the framework of competition law and the Competition Authority supervises undertakings regards to compliance with this legislation. Within the scope of this legislation, apart from the company’s legal entity and executives, each employee who caused competition infringement by his/her action is also held responsible and subject to personal penalties. Therefore, it is highly important for employees to not to cause any breach and/or infringement of competition by their actions.

It should also be emphasised that the sanctions determined on violations of competition regulations are not dependent on the persons accountability. Therefore, the consequences of violations whether its intentional or unintentional can have a devastating effect on both the company and the employees. For this reason, it is necessary to raise awareness of the company, and therefore the employees, within the framework of competition law regulations and subjects as which actions may constitute a violation. Within the scope of the experience gained as a result of the examinations made by the Competition Authority, it is acknowledged that companies are mostly unaware of violating the competition law regulations. However, knowing the risks and which actions constitute competition violations beforehand would solve many problems such as excessive administrative sanctions that they may encounter later on.

Considering all above, it should be noted that the issue of compliance with competition law regulations is increasing gradually. After the excessive fines which undertakings had to face are known by the public, many undertakings started to act accordingly to the regulations and also motivated to take actions in regard to competition compliance. However, it is observed that the studies have not become extensive enough and/or have not turned into a permanent practice until now. For this reason, the great importance of competitive compliance programs should be reminded once again.

It is highly important that undertakings do not develop these programs independently of their corporate culture. Otherwise, the implementation and/or stability of the program will not be achievable. Again, it would be more beneficial to implement them as a reflection of the company’s tradition of acting in accordance with the regulations and not to evaluate these programs as an obligation. Thus, it will be ensured that the employees would not have hesitations about the company’s aims in this direction.

Firstly, in order to create a sustainable program, the deficiencies in the existing organisation and the attitudes, behaviours and actions that may result in infringement of competition should be determined. Accordingly, it will be ensured that every company would take an action to detect and eliminate the problem in its current organisation. It would be useful to introduce this system to the employees, to explain it in a plain language, to emphasize the purpose of the system, also to evaluate the need for sanctions and/or rewards during the implementation of the system. In this context, it is necessary to provide competition law trainings to employees regularly. Moreover, it is also highly important that the introduced system is auditable. Thus, it will be possible to determine the tendencies of the employees and how these tendencies can be directed through an incident. Also, whistleblowing and advice line services can be developed in accordance with the corporate culture. Thus, it will be ensured that the employees adopt the system easily and may receive support in need. Eventually, this will be a crucial indicator of a company’s willingness to act accordingly on this issue.

It is highly important for companies to receive professional legal and IT support on the subjects as establishing the system in question, determining their current situation, training their employees and ensuring the sustainability of the system. Another significant issue for the persons who support the company is to know the sector in which the company operates and acknowledge the perspective of the Competition Authority on the sector in question. Likewise, being familiar with the company’s structure and analysing the possible risks which may constitute an infringement of competition are essential in terms of support.

With the implementation of above, even though company’s and its employees’ actions could not be controlled, the risks of conducting anti-competitive actions would be largely eliminated. Moreover, in many countries, competition authorities accept the existence of company’s competition compliance program as a reason to reduction of penalty. Although the Competition Authority has not implemented such practice on this subject in our country yet, we believe that it will be inevitable for the Competition Authority to recognize the existence of a competition compliance program as a reason to reduction of penalty eventually.

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