Guidelines on Competition Violations in Labor Markets Published

On 03.12.2024, the Competition Authority (Authority) published the Guidelines on Competition Violations in Labor Markets (Guidelines).

The significant aspects of the Guidelines are briefly summarized below:

• The Guidelines aim to provide certainty regarding labor market violations within the Law on the Protection of Competition No. 4054 (Law No. 4054).
• The Guidelines explain the types of violations that may occur in the labor markets within the framework of Article 4 of Law No. 4054 and how the Competition Board will evaluate these violations. In this context, the Guidelines mainly focus on wage-fixing and no-poaching agreements that may arise in labor markets.
• In addition, the Guidelines emphasize that the possibility of anti-competitive effects of information exchange should be considered not only by undertakings that are competitors in the labor market, but also by undertakings that exchange information as third parties, such as independent market research organizations and private employment agencies.
• It is also stated that conditions must be met to ensure that the exchange of information does not have an anti-competitive effect. These conditions are as follows: (i) the information exchange must be conducted by an independent third party, (ii) the source or content of particular data must be unintelligible, (iii) the exchanged information must be at least three months old, (iv) the data must consist of information from at least ten participants, and (v) no single participant’s data must account for more than 25% of the total data. If these conditions are met, it is accepted that the exchange of information will not have an anti-competitive effect.
• Furthermore, it is stated that information on the working conditions of employees, such as wages, wage increases, working hours, benefits, compensation, leave entitlements, etc. will be considered competitively sensitive information and the exchange of such may have anti-competitive aim or effects.
• The Guidelines also explain the scope of application of Articles 5, 6, and 7 of Law No. 4054 along with ancillary restraint assessments to agreements and practices in labor markets.
• The Guidelines state that wage-fixing and no-poaching agreements and information exchanges to restrict competition in labor markets are, in principle, not eligible for exemption.
• In addition, it is stated that in assessments regarding Article 6 of Law No. 4054, whether the undertaking under review has a dominant position both in the relevant product or service market and in the relevant labor market will be examined.
• Finally, it is emphasized that whether mergers and acquisitions reduce competition in the labor market will be assessed based on various criteria such as whether the transaction poses a risk of being a killer acquisition.