NEWSLETTER-2017

111 COMPETITION LAW complies with the relevant provisions of the Turkish competition law legislation. Paragraph 14 of the Vertical Guideline under the heading of Agency Agreements states the following: “... However non-competi- tion obligations, including those related to the period following the termination of the agreement, concern inter-brand competition, and may lead to anticompetitive effects if they create a foreclosure effect in the relevant market where the contracted goods and services are being sold; as a result, this provision may fall under Article 4 of the Act .” Paragraph 14 also differs from that in the 19th paragraph of the European Commission’s Guidelines on Vertical Restraints (“Commis- sion’s Guideline”) 2 . In the paragraph referred to in the Commission’s Guidelines, the non-competition obligations in the agency agreements might violate Article 101(1) of the Treaty on the Functioning of the European Union if they have foreclosure effects on the relevant mar- ket. However, as stated in the Informatory Memorandum on the Draft Guideline published by the Competition Authority (“Memorandum”), contrary to the EU legislation, in the 14th paragraph of the Vertical Guideline, the foreclosure effect in the market is considered as a crite- rion as to whether or not the non-compete obligations included in the agency contracts fall within the scope of Article 4 of Law No. 4054 on the Protection of Competition (“Law No. 4054”). Moreover, the Competition Authority reached the conclusion that the understanding adopted within the framework of the non-com- petition obligation contained in the agency agreements in paragraph 14 of the Vertical Guideline is contrary to the general understanding adopted in Law No. 4054 and in Block Exemption Communiqué on Vertical Agreements No. 2002/2 and in the Vertical Guideline, and requires to be harmonized, accordingly. Also, a new regulation should be introduced in order to eliminate the discrepancies regarding non- competition obligations in vertical agreements, and to remove incon- sistencies in the application of the non-compete obligations contained in the agency contracts. 2 Please see. http://ec.europa.eu/competition/antitrust/legislation/guidelines_verti- cal_en.pdf (Last Access date: 20.12.2017).