Business Law

THE TURKISH COMPETITION AUTHORITY LAUNCHES INVESTIGATION INTO THE BREACH OF COMPETITION IN THE LABOR MARKET FOR THE FIRST TIME

On 20 April 2021, the Competition Authority (“Authority”) announced on its official website that an investigation into 32 companies in relation the labour market had been initiated by the Competition Board (“the Board”) on 15 April 2021. Although this investigation is the first investigation launched by the Board for the labour market, it is envisaged that many audits will be launched by the Board in the future in order to provide for the labour market competition.

Board said that it had launched an investigation into 32 companies over “gentlemen’s agreements” between them that limited compensation and new job opportunities for employees. In a statement, it said the direct or indirect agreements that prevent employees from moving between companies could deprive the workers of higher wages and better working conditions. Moreover, Authority said that such practices would damage the competitive structure of the labour market, which could cause the workforce to seek employment in other markets or abroad. To eliminate those competition problems, the Authority emphasizes the importance of Competition Law enforcement that aims to ensure the mobility of the labour force among competitors. In this manner, employees will be prevented from working for salaries below competitive levels.

In addition , underlines the Authority’s aim to maintain the competitive market structure of the labour market, emphasizing employees’ contribution to the supply of goods and services in the digital age where creativity and innovation stand out.

 Board said information and documents obtained through a preliminary analysis found “serious and sufficient” evidence to launch investigations into companies. As a result of a preliminary analysis  conducted by ex officio to determine whether the Law on the Protection of Competition in relation to the labour market has been violated, it has been reported that it has been reached a decision by the Board. The companies investigated by the Board, which found the information obtained as a result of the preliminary analysis “sufficient and serious”, include prominent players in the technology, e-commerce, and media entertainment industries, such as Google, Yemek Sepeti, and NTV.

As it is known, complaints that no-poach agreements, which were secretly signed between Apple and Google in the early 2000s, suppressed certain levels of wages paid to employees and blocked work opportunities, attracted the attention of American authorities in Silicon Valley. In this context, “gentleman’s agreements” signed between the companies launched an investigation by the Board are agreements for determining the salaries of the employees, and these agreements are aimed at preventing competition.

However, it should be noted that the “non-compete agreement” that companies make with their employees does not fall within the scope of this decision of the Board. A non-compete agreement is a contract between an employee and an employer in which the employee agrees not to enter into competition with the employer during or after employment. These legal contracts prevent employees from entering into markets or professions considered to be in direct competition with the employer.

The Turkish version of the announcement on the official website of the Authority can be found at the link below.

https://www.rekabet.gov.tr/tr/Guncel/isgucu-piyasasina-yonelik-centilmenlik-a-d8bc3379bea1eb11812e00505694b4c6

 

Buse Mercan

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