Business Law

COMPETITION BOARD UPDATES THE ANNUAL GROSS REVENUE DEFINITION!

The Competition Board (“Board“) recently underwent a thorough revision of the concept of “Annual Gross Revenue”; the primary factor used to determine the fines imposed on undertakings in situations of infringement.

In accordance with the subparagraph (f) of the article 3 titled “Definitions” of Regulation on Fines to Apply in Cases of Agreements, Concerted Practices and Decisions Limiting Competition, and Abuse of Dominant Position (“Regulation”), which has been published in the Official Gazette dated 15.02.2009 and numbered 27142, “annual gross revenue” has been defined as “Net sales in the uniform chart of accounts or if this cannot be calculated, revenue closest to net sales which is to be determined by the Board”.

Within the amendment made by the Regulation Amending the Regulation on Fines to Apply in Cases of Agreements, Concerted Practices and Decisions Limiting Competition, and Abuse of Dominant Position, which has been published in the Official Gazette dated 15.06.2022 and numbered 31867, annual gross revenue definition has been updated as “Net sales in the uniform chart of accounts or in the event that it is not possible to calculate it; revenue closest to net sales to be determined by the Board (In case it is determined that the undertakings have accounted for their (main) operating income, such as ordinary income or profits from other activities, under the account items that are not taken into account in the calculation of net sales, the aforementioned returns/values will also be considered while determining the annual gross revenue)”.

In case of any violation by the undertakings, associations of undertakings or members of such unions and their managers and employees regarding proscriptive behaviours regulated in Article 4 of the Law on the Protection of Competition numbered 4054 (“Law”) titled Competition-Restricting Agreements, Concerted Actions, and Decisions, Article 6 titled Abuse of Dominant Position and Article 7 titled Merger or Acquisition; Administrative Fines regulated in Article 16 of the Law will be imposed pursuant to their annual gross revenue. Within this framework, an administrative fine of up to ten percent of the annual gross revenue consisted at the end of the fiscal year preceding the decision date will be imposed to undertakings or associations of undertakings regarding the matters regulated in Articles 4, 6 and 7 of the Law; an administrative fine of up to five percent of the penalty will be imposed to the employees of the undertaking or association of undertakings detected to
have a determining effect on the violation.

The earlier definition of “annual gross income” under the Law stated that the income closest to the net sales as determined by the Board was used as a basis if it was not possible to compute the net sales of the undertakings in the standard chart of accounts. With this amendment, it is stated that in addition to the (main) operating income of the undertakings, incomes such as advertisements, cargo, returns, commissions, etc. from other activities, which are not normally taken into account in the calculation of net sales, will also be taken into account in the calculation of annual gross income has been arranged.

The aforementioned amendment entered into force on 15.06.2022 and the text of the Official Gazette dated 15.06.2022 and numbered 31867 regarding the relevant amendment can be accessed via the link below.

https://www.resmigazete.gov.tr/eskiler/2022/06/20220615-3.htm

Fatmanur Ayışık

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